Stakeholders in the nation’s maritime industry have described lack of regulation of charges for federal government agencies involved in cargo clearance as contributors to rising cost and charges in the nation’s seaports.
This was disclosed over the weekend at the third edition of Dr. Taiwo Afolabi annual maritime conference, held at the University of Lagos (UNILAG) tagged: Port Costs and Ports Charges: A Recurring Decimal under Port Reform Regime, which was chaired by Chief Adebayo Sarumi while Otunba Kunle Folarin delivered the keynote address.
The federal government agencies that operates at the cost include: National Agency for Food Drug Administration and Control (NAFDAC), National Drug Law Enforcement Agency (NDLEA), Standard Organisation of Nigeria (SON), Port Health, National Agriculture Quarantine Service (NAQS), Nigerian Maritime Administration and Safety Agency (NIMASA) and Nigeria Customs Service (NCS).
Others are Nigeria Police, Directorate of State Security Services (DSS), Nigeria Immigration Service (NIS), among others.
LEADERSHIP recalls that some importers said they have abandoned Nigerian ports for neighboring ports in Benin, Togo and Ghana over high charges and cumbersome clearance process fuelled by proliferation of government agencies at the port.
Speaking at the event, chairman of Nigerian Ports Consultative Council (NPCC), Otunba Kunle Folarin stated that about 16 federal government agencies are involved in cargo clearance at the seaports with all making both legal and illegal charges.
Folarin asked who regulate the charges of the federal government agencies operating at the seaports saying they also contributed to port cost and charges in the industry.
He said: “We have 16 other service providers in the ports, NAFDAC, SON collect money. Is the port regulator going to regulate them? Do they even have a tariff? NDLEA collets money both officially and unofficially. So, we have to leave here with a take home and we have to change. It is very important that we leave out the jurisprudence because the operators are suffering. No one is regulating the port. So, if they are in court for 40 years, what should we do? If it is port cost or charges, it is a cost for everyone.”
Folarin also took a swipe at the Nigeria Police saying they also introduced unofficial tariff during cargo clearance. “Port reform must be total. The Police, the Army are in the port. What are they looking for? They have their tariff but it’s not published,” he alleged.
Corroborating Otunba Folarin, chairman, Seaports Terminal Operators Association of Nigeria (STOAN), Princess Vicky Haastrup said while NIMASA tariff is the highest in the world, the Nigeria Customs Service has also increased its tariff since concessioning began in 2006. “NIMASA’s charges since 2006, is it still the same today? Who regulates them? In fact, NIMASA charges is one of the highest in the world,” she alleged.
“What was Customs duty in 2006 on commodities and what is it now? Why are we shouting terminal operators? Government policy somersault, do they sit well and think properly? Government needs to quickly pass the Port and Harbour bill because it has been delayed for too long.
“In 2006, when we took over the port, it was N125 to a dollar but what is it today? N362 and by implication, our cost of operation has increased over 100 percent. The terminal operators have invested heavily, we are yet to get anything positive in return,” she lamented. Haastrup also challenged the government to take decisive action on issues that constitute bottlenecks to actualisation of Ease of Doing Business in the ports.
‘‘It has been 12 years terminal operators have been operating in the port, yet the bill is still waiting to be passed. There can’t be Ease of Doing Business if the government does not take a decisive move. Government needs to take some stand on issues that constitute bottlenecks on the Ease of Doing Business,” she pleaded.
Speaking earlier, executive vice chairman of Sifax Group, Dr. Taiwo Afolabi raised concerns over astronomical increase in the exchange rate especially dollars and how it affected their operations. He stated that when the terminal operators took over port management in 2006, dollar was hovering between N125 – N131 against N360 to a dollar in 2018.
“How really do you determine cost? From whose perspective? And at what time intervals do you review cost given the eternally dynamic and mercurial unpredictability of the movement of the exchange rate of the naira to the dollar? In year 2006 for instance, when we became ports concessionaire, naira was between N125 and N131 to a dollar.
“How much is the exchange rate today? In other words, since many of the obligation of terminal operators are discharged to the lessee in dollars, how much naira will be enough today to purchase the required dollars today 12 whole years after the historic concession? How do you generate that amount of naira in today’s national economy?
“By what percentage will the cost of service be adjusted upward to reflect the astronomical charges in the foreign exchange regime?” he asked rhetorically.