Amiwero: Our ports are becoming very unfriendly for business
• Nigeria Losing N18t Yearly For Still Operating Inefficient, 1947 Port System
• There Is No Congestion In Nigerian Ports, Only Backlog Of Cargoes Waiting On Terminal
National President of National Council of Managing Directors of Customs Licensed Agents, (NCMDCLA), Lucky Amiwero, in this interview with SULAIMON SALAU, there is no congestion in Nigerian ports, but cargoes waiting at the terminal, but not evacuated.
There are claims that Lagos ports are congested. What could be responsible for this?
We don’t have congestion in Nigerian ports, what we have is backlog of cargoes. Congestion is different from this. If a port is congested, it means that there is a lot of ship turn-around, that is, ships are coming in, but cannot move out. But what we have here is that our throughput is very low, because of a system that is malfunctioning; we have backlog of cargoes that cannot come out from the ports. It takes an average of two to three weeks for trucks to access the ports. After entering the port, exiting the port is another problem. Besides, our system is a 1947 system where we are still examining containers physically without scanners.
I am a member of various government committees, and I have served in the backlog committee. We were the people who decongested the backlog issue in 2001. So, what we have today is not congestion, it is backlog because we have a faulty import system. Instead of having four principles of inspection, all of them have been collapsed into one. So, every container is being subjected to physical examination. That actually delays the process and it affects both equipment and plants. We have delays in our inspection regime because we are doing physical examination instead of using scanners.
According to international standards, 80 to 90 per cent of our consignments are not supposed to be physically inspected. If you subject your containers to physical inspection, you are not a modern port, but a 1947 port because the regime that we have in place is the one that takes us back to 1947, when examination was done physically. There is nowhere in the world where what we are doing in Nigeria is done.
Also, our regimes are imposed as we don’t have the tools for trade facilitation; we only have an imposed system, which has not complied with the procedures of law, in terms of many things that we do. We still release from the port; the cost of moving cargoes from the port is too high, and we have a very complex regime that is malfunctioning, and not in line with the international best practices. When you look at our port system, the core of our Ease of Doing Business is trading across border, you cannot imagine that Nigeria is ranked 183 out of the 190 countries. Nigeria is also the last in Africa. Being ranked 183 in the trading across border should make us ashamed of ourselves.
When you look at the impact of all these in terms of economic cost, we lose almost N8t in a year because when you look at how much it costs to move a container out of the port, it is a huge amount. Some people spend as much as N700, 000 to N800, 000 to move cargoes to the East. Most of the demurrages are consumed on the trucks, so the importers and agents are actually in a terrible situation as they lose on both ends. When you also look at the whole system, Nigerian ports are becoming very unfriendly. People just come in, manipulate the system and move out of the port.
Now most importers are using alternative ports in West African countries because our draught level is so shallow compared to neighbouring countries.For instance, when we are talking about 13, 14 metres in Apapa and Tin Can ports, Togo is talking about 16 metres; Benin is talking about 16 metres, Cameroon is talking about 16 metres, while Ghana is talking about 19 metres. All these countries are actually targeting our cargoes because they don’t have much cargo. Our transit is now being sent to Ghana. We have lost our trans-shipment and our domestic cargoes are also being shared with our neigbouring port in Cotonou.
Do we still have the land-locked countries patronising Nigerian ports?
No, Nigeria is being deleted as a transit nation. We are not doing any transit. Niger, Chad, Burkina Faso are close to us here, but importers are going to Ghana and Cote d’ Ivoire because of their good procedures. Our procedures are archaic and not functional, and our import and export regime are yearning for reform. For now, our import and export regime are still analogue and not digital. So, there are lots of things that must be looked into.Our cost of clearing consignments is one of the highest in the world. We are not consistent in terms of operations, and we are also inefficient and not transparent.
To what extent has this high cost and inefficiency at the ports impacted on the manufacturing sector?
The manufacturing sector is highly affected because as a country, we have not grown to the point of generating raw materials. We still rely on import to get some of the inputs and grow our primary industries. So, there are lots of problems facing our manufacturing sector arising from inefficiency at our ports. That is why they are asking President Muhammadu Buhari not to sign the African Free Trade Agreement (AfCTA) because our infrastructure is in decay. What is government doing about that? The import and export system ought to have been reformed. Our export process is bedeviled with lengthy and cumbersome procedures, same applies to the import.
As a person, gaining access into the Lagos ports take about six hours, while trucks take weeks to gain entry. As I speak, more than 80 per cent of businesses in Apapa have closed down. This is a country that is going down everyday; we just have to tell ourselves the truth.
This Apapa-Wharf Road is less than four kilometers, and it’s taking so long a time to fix it, even when other less important roads are being taken care of. What do you think is missing here?
The Federal Government is just unserious. In 2009, former President Umar Yar’Adua approved the construction of this road, but nearly 10 years after, the road is still lying fallow. Besides, the component of seven per cent surcharge, the Nigerian Ports Authority (NPA) collects four per cent and they are supposed to use that money to manage this road because the money is meant for development of the port.
There are five ports in Lagos – Apapa, Tin Can, Lillipond, Brower and PTML, and these ports are not accessible. You cannot go to Ijora now; Tin Can is a no go area, and penetrating Apapa is not possible. The whole problem was generated by the concession programme because they did not take into cognizance, the holding bay. Before now, there were holding bays at all the ports, but after concession, those places have been converted to something else.
NPA recently harped on the need for shipping firms to establish holding bays, but they appear to be adamant. What could be done in this regard?
The problem is that shipping companies are the owners of the terminals and they are supposed to provide the holding bay. In the component of cargo dues, terminal operators are collecting holding bay charges from Customs’ agents and they do not provide it. Then the trailer parks are supposed to be provided by Lagos State government.
In the First Republic, Lateef Jakande provided a trailer park. If Tinubu had followed Jakande’s step and Raji Fashola followed Tinubu’s step, we should have got massive trailer parks in Lagos by now. People are now running away from the state because it is becoming a problem. The man-hour spent on traffic is unprecedented. Eighty per cent of the companies in Apapa have closed down. All the companies around there have all gone, some are even moving out of the state.
Since eastern ports are experiencing very low activities and plenty of activities leading to congestion/backlog of cargoes in Lagos ports, why can’t we make good use of these other ports?
The problem is that the draught of eastern ports is poor. Besides, eastern ports cannot generate cargo. We have Onitsha port; it cannot even take a ship, because it is a river port. How many of those ports can take big ships? These ports cannot generate enough cargoes to bring the expected high number of ships, but Lagos ports can generate cargo, you also have the industries here as well as, the throughput. In other words, Lagos has everything. How many companies do you have in Calabar, or in Warri?
But government can as well introduce incentives to attract cargoes to those ports so that importers around them can take advantage of that?
How about the draught of the port? Are the ports dredged? Government can only give incentives, but it cannot push cargo there. The people who influence cargoes are the shippers. Also, most of the cargoes are consumed in Lagos you cannot take cargo to Onitsha where you cannot consume them; The market is in Lagos; the traffic is in Lagos; the buyers are in Lagos, and the companies are in Lagos. All these other ports are political ports; they are river ports. Most of them are not viable unless you look at them technically and make them special ports.
What do you make of the congestion surcharge recently introduced by CMA CGM Group?
It is illegal because Nigerian ports are not congested even though the firm is claiming that its vessels always have to wait for a number days before discharging when they come to Nigeria hence the need for the surcharge.
Let me repeat, as against congestion, what we have in Nigerian ports is backlog of cargoes waiting at the terminal, but not evacuated, not that ships cannot discharge. I think that CMA CGM, which is one of the shipping lines that is dominating the shipping world is only trying to test the waters with the surcharge because there is no congestion. We have many empty berth spaces all over the place, so where is the congestion?
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