How to overhaul ports, land borders, by experts
As Nigeria wades through the current economic recession, its recent poor ‘Ease of Doing Business’ rating has emphasised fact that critical sectors of the economy, like the maritime industry, need overhauling.
The International Finance Corporation in the survey ranked Nigeria a dismal 181, out of 189 countries. This is worrisome, considering the country’s huge resources, market size, population and strategic location on the 853-kilometer coastline around the Gulf of Guinea. The nation hosts the Bight of Benin to the west, and the Bight of Biafra to the southeast, while there are a number of lagoons along the westerly coastal areas.
As a country that relies heavily on imports, addressing corruption at the ports and land borders is critical to reducing cost of doing business. Also, stakeholders in the sector believe policies by the Federal Government are detrimental to investments and trade.
The Auto Policy, for instance, has continued to receive knocks from operators, while the ban on importation of essential commodities such as rice is considered delicate policy. Multiplicity of government agencies and proliferation of charges at the ports, amid cumbersome clearance process, are also points of great concern.
The Secretary General, National Association of Government Approved Freight Forwarders (NAGAFF), Arthur Igwilo, said multiple regulation by government agencies has established confusion at the ports, making doing business expensive and hostile.
“Over the years, people just find their ways into the ports under different guises and start extorting money from users. For example, when a vessel arrives, five or more agencies would force their way in, to the chagrin of the crew whose vessel may have just berthed at more organised ports.
“There are only two agencies authorised internationally to go onboard. The international community always sees Nigeria as a banana republic because of the way we run our socio-economic and political lives.
“The Nigeria Customs Service arbitrarily gives itself revenue targets officially and unofficially. The official revenue targets are declared publicly, but unofficial targets are for personal purses. The latter, they flaunt in ways that portray the paramilitary organisation as most corrupt.
“Other agencies and parastatals of government in the ports, like Standards Organisation of Nigeria (SON), National Agency for Food and Drug Administration and Control (NAFDAC), and a host of others, operate outside their mandates, as stipulated in the various Acts that established them. In fact, there is a whole lot of confusion in the ports.
“This ensuing chaos, over the years, has been capitalised on, to rip off port users. Consequently, this makes Nigerian ports the most expensive and unfriendly in sub-Saharan Africa.”
Igwilo, who noted that standardisation is solution to the problem, expressed optimism that the recently lunched Standard Operating Procedures (SOP) would instill sanity at the ports and eliminate corruption.
The situation at the land borders is even more pathetic. The Nigeria-Benin Republic border at Seme, described as the country’s busiest trade route, reflects the inefficiencies plaguing the flow of goods in and out of the country.
The Seme post has a poor working environment for border officials; primitive accommodation, absence of basic social amenities, and deplorable road network incompatible with a regional gateway. Rather than facilitate trade, the situation at the border enhances corruption.
“It is a pity Nigeria does not have infrastructure. Our business policies are also not friendly,” said Lucky Amiwero, international freight consultant, trade procedure expert, customs agent and managing director of Eyis Resources.
He lamented the poor state of roads linking ports in Apapa, Lagos, and blamed the Nigerian Ports Authority and the Nigeria Customs for anomalies at the ports.
He said: “The concession contract stipulates there should be a holding bay. They are collecting money on that everyday, but where is the holding bay? In the contract, the trailers pay entrance fees every time they enter the ports by virtue of the money licensed customs agent pay for trailers to load. We have played our role. What is the government doing about its? They just collect the money and keep mum. These are the kinds of things we see around the country, and these are the kinds of things that make people move out of the country.
“Our system is very expensive. Look at Ghana, for instance. I learnt they have cancelled terminal handling charges. I have been clamouring for the past 15 years that terminal handling charges should be cancelled in Nigeria. We have two charges – terminal and delivery. What is a delivery charge and what is a terminal handling charge? They are the same. And terminal-handling charge runs into billions and trillions of naira.”
Amiwero added: “Our cost of doing business is a big problem, and our procedures are lengthy and cumbersome, because most of the things we do are impositions. Even the agency that is supposed to regulate things does the same. They impose value and impose decisions. They are supposed to treat, classify, interpret and apply. Many things are not done properly. We cannot continue to operate a country where you don’t do things based on law. Most of the revenue accruing to the government is imposition.
“For instance, the Central Bank of Nigeria said in a circular that the exchange rate to be used is the one approved on Form M. What Nigeria Customs has done is use the prevailing rate. Form M is issued at N197. But when you get to the port, they give you N313 to a dollar. You can see how they kill the economy. The economy is finished. They have shattered the economy. There is no confidence. It is not transparent. It is not predictable. It is not consistent. It is not in line with any of the tools that facilitate trade. So, the confidence to build is a problem. Until we approach things on the basis of law and not imposition, we can’t move forward.”
The chairman, Ship Owners’ Forum, Margaret Onyema-Orakwusi, said non-availability of fund at a reasonable interest rate for investors and insecurity are reasons the sector is yet to assume its rightful place.
“Finance is another challenge. Banks don’t understand that maritime business is a long-term investment, not cash and carry. You have investment running into millions and the banks want you to pay 20 or 30 per cent interest, so you spend your entire life working for the banks. The big problem is how to get cheap finance for investment in the sector,” she said.
Charles Otuonye, chairman, Marine Engineering and Naval Architecture (MENA), a division of the Nigerian Society of Engineers (NSE), stressed the need for government to strategise on a robust and sustainable way to diversify its economy in the direction of the maritime industry.
He said there is no better time to focus on the sector and avert further economic drift. He added that the recession should be seen as opportunity for government and non-governmental organisations to develop the shipping industry through sustainable maritime policies.
“It is not enough to catalogue the problems. It is wiser to proffer solutions. Diversification is the prevalent song in the mouth of government. But most Nigerians think the only possible area is agriculture. The maritime industry is huge economically, perhaps next to agriculture,” he said.