Nigeria’s inefficient ports costs N1trn in lost revenue – Businessday

Nigeria loses N1 trillion annually to port inefficiencies, a loss that maritime analysts and the Organised Private Sector say can be prevented if the country adopts a   Single Window that will enable importers and exporters to lodge standardised documents through a single entry point.

A report released yesterday, 24 October by the Lagos Chamber of Commerce and Industry (LCCI) and the Financial Derivatives Company shows that the N1 trillion losses come from 14 government departments, broken into 20 agencies, whose activities involve a lot of paper work, which could easily have been eliminated with one single window aided by technology.

“What the single window will do for the players is that it will eliminate multiplicity of agencies by creating a single clearance and payment desk with an immediate cost-cutting positive impact at the ports,” said Vincent Nwani, director, research and advocacy at the Lagos Chamber of Commerce in Lagos.

Nigeria has six major ports. They are the Apapa Port, Tin-Can Island Port, Calabar Port, Onne Port, Rivers Port, and Warri Port.

Cargo clearance takes five to 14 days at the ports as against the ideal two days or less in Egypt, South Africa and Morroco. It requires 23 signatures by 18 agencies, whereas exporting a cargo goes through 20 agencies and 33 signatures, research shows.

The impact of this is that Nigeria lags peers in the number of 20-foot equivalent units.  The country’s annual turnover is currently 1.1 million units of containers, which is still a far cry from 10 million potential capacity.  South Africa currently does 4.8 million 20-foot equivalent units, while Egypt is highest, with 8.8 million container units, says the latest report.

Jonathan Nicole, president of the Shippers Association of Lagos State, said Nigeria needs to protect her cargo through consistent policy and well followed development plans. Nicole added that  the country loses over N600 million to the diversion of Nigerian bound vehicles to Cotonou and Lome ports alone.

  “Nigerian ports need  to be fully automated and the issue of a single window online platform that would connect all the operators and agencies at the ports should be taken seriously if Nigerian seaports would have timely delivery of cargo to the importers warehouse,” Nicole said.

He further observed that this would make Nigerian seaport user friendly and also put an end to the avoidable delays that incur demurrage and storage cost on importers. He called for the reduction of the number of government agencies at the ports, whose presence, he said lead to delays and extra cost for importers.

Lucky Amiwero, president, National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), said the N1 trillion annual loss is even underestimated because the latest report fails to factor in the impact of cargo diversion to other West African ports like Cotonou port, which handles over 60 percent of vehicles and rice that come into the Nigerian market.

The revenue loss, Amiwero observed, is huge because port users, officers of government agencies and operators do not follow import procedure as well as the rules guiding international trade. Government, for its part, has failed to be consistent in its policy formulation and this is also fuelling the losses suffered by businesses.

“To block this revenue leakages, government needs to employ the services of experts to guide them on how to put the industry on track and there is also a need to create the right fiscal and monetary policies to drive the economy positively,” he added.

He said delays at ports and poor infrastructure are frustrating exporters amid Nigeria’s drive for foreign exchange. Exporters of food and other light products complain that 20 percent of their  products go bad before they get to the ports because of delays caused by the poor state of roads leading to major ports.

“There is huge infrastructure challenge. Again, we have security agents at the ports who are not supposed to be there. They are poorly trained and most of them are not properly educated,” Jon Kachiukwu, CEO, Jon Tudy Interbiz, produce exporters to the USA, told BusinessDay in a telephone interview.

The reports notes that the introduction of the single window will reduce the 20 government agencies currently operating at the ports to six, enabling the ports to function as a trade facilitator, rather than inhibitor.

They also want to see consistent and proactive policy that will reduce the cargo clearance timeline from between five and 14 days to two days, which is the standard time in Egypt, South Africa and Morroco.