The crisis in the maritime sector was re-emphasised last week in the fresh alarm raised by stakeholders that Nigeria may lose another 40 per cent of cargoes to neighbouring countries this year. Unless our negligent government undertakes urgent reforms at the ports, says the Association of Nigerian Licensed Customs Agents, more job losses, heavier losses to the treasury and continued business failures lie ahead. Nigeria’s President, Muhammadu Buhari, needs to drop his indifference and save the economy from imploding.
ANCLA’s vice-president, Kayode Farinto, presenting the body’s view in a newspaper interview, could not comprehend how any government could persistently neglect its second major revenue earner – after oil and gas – the way the Nigerian government does. By November last year, the Nigeria Customs Service had collected N1.1 trillion as revenue, most of this from maritime sector operations, in a year when it set a revenue target of N1.3 trillion. Reasons for the expected losses are not new: infrastructure at the ports is poor and ill-maintained; shipping and transaction costs are high, there is shallow water draft at the ports; there is a proliferation of 12 agencies at the ports, while corruption, the bogeyman of Nigeria, reigns supreme there.
At the Apapa and Lagos ports that handle over 60 per cent of the country’s maritime trade, confusion and delays are accentuated by terrible access roads that create gridlock, not only in and around the ports, but also the entire Lagos metropolis that accounts for 65 per cent of the nation’s commerce. Losses to the economy have been colossal: a survey last year jointly undertaken by the Organised Private Sector and the Centre for International Private Enterprise put the nation’s annual revenue losses from the ports crisis at N3.46 trillion. Its breakdown assessed customs revenue loss at N600 billion, $10 billion in non-oil exports and N2.5 trillion lost by businesses across various economic sectors. Citing the delays, insecurity, traffic jams and extortion by Customs, touts, port officials, police and security men attached to the numerous task forces, the Lagos Chamber of Commerce and Industry estimates annual losses at $19 billion. It has impacted on industrial capacity utilisation, keeping it at 40 per cent and below on the average, while about 40 per cent of enterprises located around the ports have closed down, scaled down or relocated altogether. Property owners too have lamented the drastic fall in property values in the Apapa area, while the Lagos and Apapa local governments also report massive revenue haemorrhage as a result of the port congestion.
The Federal Government must rouse itself; while it demonstrates such short-sightedness, competitors are making hay. Benin Republic, whose economy would collapse without its Nigeria-bound maritime, cross-border trade and smuggling, in 2017, modernised and out-sourced Cotonou Ports to the Port of Antwerp International. Before this, it had drawn away 60 per cent of Nigeria-bound cargoes by reducing its rates, improved facilities and 24-hour goods clearance time. Dynamar B.V., a Dutch maritime consultancy, reported in October 2018 that Lome Ports had overtaken Lagos ports as West Africa’s leading container port after a massive investment by the Togolese government, profiting from the high charges, delays, corruption and extortion in Lagos. Dynamar said Lagos lost 30 per cent of its container traffic over five years, while Tema, benefiting from a $1 billion investment by Ghana Ports and Harbours and private capital led by APM Terminals, is closing in, followed by Abidjan Ports, where the Ivorian government is also investing.
Buhari has to drop his disinterest in this vital sector of the economy that still accounts for 95 per cent of our international trade. The minsters of finance, transportation, commerce and industry, budget and national planning, petroleum resources and departments and agencies concerned with trade facilitation and investment should forcefully present the imperative of mustering the political will, investment and liberalisation of the maritime sector and rehabilitating infrastructure in and around the ports to the President. In South Africa, with whom we vie for Africa’s largest economy spot, the maritime sector contributes 1.4 per cent to GDP, contributes 3 per cent in Kenya but a mere 0.05 per cent in Nigeria, says the International Monetary Fund.
There must be short, medium and long term policies to develop the sector and avoid being left too far behind to catch up with the rest of the world. First, get the agencies to implement the Presidential Executive Orders issued last year but promptly sabotaged by officials, notably the NCS. The 48-hour deadline to clear goods should be implemented; the scanners bought for Customs must be made to work and the agency rid of the pervasive corruption that has contributed to the rot.
Fixing the roads in and around Apapa should be a national emergency; it is irresponsible to neglect a complex from which revenues of N2 trillion accrue annually. Technology is the key to reforms as recommended by the IMF, citing the Maritime Innovation and Technology platform created by Singapore that has helped to make it second only to Shanghai, China, in the World Economic Forum’s ranking of the world’s best ports. LCCI too recommends implementation of the technology-driven Nigerian Single Window trade facilitation scheme to reduce human contact and the corruption that accompanies it.
Efforts should be made to relocate the 60-plus tank farms in Apapa that, combined with bad roads and indiscipline, cause as many as 5,000 trucks to line up in Apapa and beyond, waiting to load, thus clogging up the roads.
Reforms should include private sector-led investment in railway links, as well as in the other ports spread along the country’s 853 kilometres of coastline. Buhari should act today as delay only prolongs our national agony.