‘Double taxation, FX charges killing $10 billion barging business’

Double taxation and charges in foreign currency for barging business are crippling the industry, which has potential revenue generation of $10 billion into the government’s account, operators have warned.

The President of the Barge Operators Association of Nigeria (BOAN), Olubunmi Olumekun, said there are hidden tariffs operators pay before moving containers, which are not friendly to the business.He also noted that the government charges barge operators in dollars instead of local currency, just to move containers from Calabar to Port Harcourt.

“Government wants us to go and pay in dollars, which is not done all over the world. They forget that these containers are still going to be subject to another movement from that port to wherever it is going in the world.

“Also, they still need to pay the freight. So, you can see double freight and this person will still charge their commission on the freight. It is double taxation. We are supposed to encourage our local businesses, not the government putting all these charges on us,” he stated.

Giving a breakdown of the charges and the cost implications on logistics, Olumekun said the government charges $500 per container, while a barge carries about 30 containers.

He said currently, barge operators charge importers N300,000 to N400,000 to move a container from the port to its destination, whereas it is about N200,000 by road.

He said barge operators still pay over N150,000 charges to terminal operators, out of the amount the importer pays to transport his goods, leaving barge operators with the little amount left after the business.

“The charges from the terminal are too much. From the N300,000 we charge importers, terminal operators alone are taking over N150,000 from us, just to take the containers. We are not talking about where you are coming from because you still need to load there and where you want to discharge. All these charges and bottlenecks are killing the barging industry,” he stated.

A bargeman, Peter Opara, told The Guardian that business has gone down, noting that the decline started after the Russia-Ukraine war, coupled with multiple taxation from government agencies and now the cash crisis and election.

He said importers and barge operators are hopeful of a new government to help address these issues and restore the barging industry to contribute its quota to the Gross Domestic Product (GDP) of the nation.

General Manager, Logistics, Joatelim Bonded Terminal, Haruna Omolajomo, confirmed that the high cost of operations due to multiple taxation is making people not to patronise barging to evacuate their cargoes from the seaports, but rather opt for trucks.

Omolajomo, who is also the General Secretary of the Association of Bonded Terminal Operators of Nigeria, explained that during the period of port congestion, where trucking a container from Mile 2 to Apapa, was about N800,000 to N1 million, barging was about N250, 000.

He said due to the boom of the industry, “government and federal agencies all came with their tariff, which now increased the logistics for barge operations. Now the barge has increased to about N450,000.”

Omolajomo also added that because of the roads that are cleared now, people prefer patronising trucks since it is cheaper than barging their cargoes.