How Unfriendly Port Environment Causes N2 Trillion Yearly Revenue Loss To Nigeria
NIGERIA may have been recording a whooping yearly revenue loss of N2 trillions as a result of diversion of Nigeria bound cargoes to ports in neighbouring countries, the Nigerian Shippers Council has said.
The council said cargo diversion was the result of unfriendly business climate at the nation’s gateways, where service providers, including shipping companies and terminal operators were allegedly imposing arbitrary charges, forcing Nigerian shippers to divert their consignment to nearest neighboring ports, where business climate is perceived to be more friendly.
This unfriendly business climate at Nigerian Ports, apart from causing diversion of cargoes to nearby countries, may have forced many importers and clearing agents to relocate with their families to cities where those ports are located in Cotonou/Benin Republic, Lome in Togo, Tema in Ghana and few others.
The President of Nigerian Shippers Association Lagos Chapter, Reverend Jonathan Nichol gave a graphic picture of frustration that had caused cargoes diversion and relocation by some port operators from the country, causing untold economic implication for Nigeria.
“ The bottom line of going into business is to make profit for your existence. For instance, if you spend $15,000 to buy goods abroad and you use the equivalent to clear the same goods anytime they arrive in Nigeria; the tariff is high at the Nigerian port. It should not be more than five per cent, but sometimes, you pay as much as 25 per cent depending on the goods you are bringing in. This tariff is being paid to shipping companies and terminal operators.”
According to him, some of the service providers do deliberately create bottlenecks at the clearing process to enable them collect demurrage charges.
“It is not only the goods that are going to Cotonou and other locations outside Nigeria, many Nigerians who are into shipping business are also relocating with their entire families because that is where they are now doing their business and making money. The business climate is too harsh in Nigeria. The cost of doing business, including the cost of generating power is high. That is why the manufacturing sector is suffering. If you lose N2 to N3 trillion to this, that is massive set back due to cargo diversion, if we have that, the government will be comfortable. People are building their empire in another man’s country because of this factor.”
Blaming the service providers for high cost of doing business at the Nigerian gateways, he said, “if you don’t clear your goods in three days, you will incur demurrage. The service providers sometimes create bottlenecks, their network often breaks down and they will not release the goods on time for no fault of the shippers and yet, they collect demurrage if we cannot clear the goods after three days”.
That was why there was jubilation last year when the Federal Government appointed the Nigerian Shippers Council to regulate commercial activities at the ports. The appointment was informed by the need to close the vacuum created after the port reform of 2006, when the ports terminals were handed over to private concerns.
All stakeholders, including the service providers, praised government to high heavens, saying they were happy and ready to cooperate with the port sectors arbiter.
But the jubilation which heralded the appointment has now turned to litigation as the service providers (shipping companies and terminal operators) are in court with the Nigerian Shippers’ Council, which made attempt to regulate tariff as required by it government.
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