Port Concessionaires Seek Lease Fee Payment In Naira, Access Forex At Official Rate

Port concessionaires have urged the President-elect, Asiwaju Bola Tinubu, to allow terminal operators pay their lease fee in naira instead of foreign currency as well as have access to foreign exchange at the official rate to replace spare parts for their equipment.

Speaking in the Nigerian Ports Today (NPT), an in-house journal of the Nigerian Ports Authority (NPA), and a copy made available to LEADERSHIP, the chairman, Sifax Group, Dr Taiwo Afolabi, said having access to forex at the official rate would make the port environment friendlier for them.

Afolabi, also described tax holiday, implementation of the Ease of Doing Business (EoDB), infrastructure upgrade as policies of the administration of President Muhammadu Buhari, that has impacted the growth of the Maritime industry in eight years.

He said, “as a terminal operator, Ports & Cargo like other seaport operators in Nigeria are faced with a myriad of challenges. Let me highlight some of them. One, difficulty in sourcing for foreign exchange. An average terminal operator depends largely on access to foreign exchange to purchase equipment and spare parts. The foreign exchange situation in Nigeria in the last few years has affected our operations and eroded our profit margin.

“Apart from the difficulty in sourcing it, the rate also presents a big headache for us. At the inception of our concession in 2005, the exchange rate of Naira to Dollar was about N130 but today we buy above N700 in the black market to meet our obligations. Imagine the difference.

Unstable government policies could also be challenging for us. While you are still trying to adapt and ensure a policy, you will realize the government has moved past it to develop another one. This creates confusion and instability and hampers the ability for a long-term investment plan.

Related to the first point I mentioned earlier is the payment of statutory lease fees in dollars. The terminal operators are groaning under this heavy weight. We have to practically source this foreign exchange from the black market at exorbitant rates so we could pay our fees. That’s why we have been appealing to the government to allow us to pay these fees in local currency.”

Speaking on Ease of Doing Business at the port, Afolabi, said the implementation was a game changer for port operations in the seaports.

“Without doubt, the ease of doing business programme in the maritime sector is a game changer. With a combination of economic incentives like tax holiday, less bureaucratic processes and massive investment in infrastructure and facilities in the sector, there is a renewed interest in the sector by investors.

“Payment of fees in local currency for the terminal operators as well as access to foreign exchange at the official rate for the purchase of spare parts and equipment will lessen the burden on the operators and make the business environment friendlier for us to thrive,” he said.

Afolabi, however, applauded the outgoing administration of President Muhammadu Buhari, saying he presided over significant growth in the country.

He stated further that the significant growth was followed up by concessionaires with massive investment in technology, human capital, cargo equipment and infrastructural facilities.

“In the past eight years, the maritime industry in Nigeria has seen significant growth and development. The volume of cargo coming in and going out of the country has increased significantly, though we still record trade imbalances since our import volume is higher than the cargo being exported out of the country.

“The port terminal concessionaires have Impacted the sector greatly with their massive investment in technology, human capital, cargo equipment and infrastructural facilities. These investments have resulted in a better and more efficient maritime sector that has created more employment opportunities, improve vessel turnaround time in our seaports and supported trade across the country.”

“A key milestone is the establishment of bonded terminals across the country. This has greatly assisted in decongesting our seaports, facilitated easier consignment clearing as well as increased revenue generation for the government.”