Improving gateways’ efficiency for trade facilitation
Despite its potential for growth, artificial barriers and difficult operating environment for the private sector remain major inhibitive factors stifling Nigeria from achieving its aspirations while deterring investors from maximizing trade and investment opportunities. FEMI ADEKOYA writes on the inefficiencies in the nation’s gateways as obstacles to building profitable bilateral ties and what government needs to do in a period like this when it requires more revenue.
For private sector operators, the growth and promotion of trade and economic activities can only be pragmatic when economies strive to provide a conducive and friendly environment.
Like other sectors of the economy, Nigeria’s seaports are not immune to the challenges in the economy; rather, the ports constitute a bottleneck for the rest of the economy due to their inability to meet the level of demand needed to drive operations, poor governance, corruption and inefficiency in the system.
Worried by the loss of business to neighbouring countries arising from low competitiveness of its ports, stakeholders believe the Federal Government needs to address priorities at the ports as part of measures to enhance the ease of doing business.
According to the Lagos Chamber of Commerce and Industry (LCCI), the cost of trading goods remains a significant hurdle with the import and export times’ reduction of 25 per cent and 65 per cent respectively since 2013.
“Nigeria’s seaports still rank as the most expensive in West Africa. Presently, on the import side, extra costs related to yard handling fees represent an extraordinary 77 per cent of the total cost, driven by longer-than-ideal border clearance times, yard handling procedures and informal payments to customs and other government agencies.
“Extra costs related to transportation between the port and Lagos warehouses represent 94 per cent of the total cost, driven mostly by congestion and poor road conditions. Additional 41 per cent of the cost of import is attributable to inefficiencies or informal payments. On the export side, costs are lower than import costs but distributed similarly”, the chamber added.
With these findings, the Federal Government stated that efforts are underway to reduce human intervention at the ports, some of which have been responsible for the poor operational efficiency at the ports by deploying technology and increasing stakeholder collaboration on regulatory frameworks.
Minister of Transportation, Rotimi Amaechi, noted that the present administration is looking at issues raised by stakeholders bordering on concessions, charges and local content as well as the number of agencies at the ports in a bid to further improve earnings from non-oil exports as well as encourage bilateral ties between Nigeria and other trading partners.
With many importers and traders diverting their cargoes to neighbouring countries, the Federal Government noted that measures are underway to address the bottlenecks in the maritime sector.
Besides, the federal government also announced plans to invest massively in infrastructure and human capacity development, noting that the present administration is focusing on policies and reforms geared at promoting diversification and structural reform of the economy.
The Federal Government had in the past reduced the number of agencies at the ports in a bid to check complaints by operators on the number of signatories and turnaround time needed to clear their cargoes at the ports.
The Vice President, Professor. Yemi Osinbajo, explained that a successful execution of the policies is expected to result in enhanced productivity growth, increase in the share of manufacturing in Nigeria’s total export earnings and drastic reduction in susceptibilities of the economy to external shocks from commodity volatility currently being experienced by the nation.
He explained that reform efforts at the ports is focused on deploying a deliberate, well though through automation strategy that achieves the tripartite objectives of blocking revenue leakages, improving process efficiency and reducing human intervention.
Osinbajo during a public private dialogue on port efficiency and maritime sector roadmap organised by the Lagos Chamber of Commerce and Industry ( LCCI), revealed that in the strategic implementation plan for 2016, the Federal Government is making efforts at facilitating trade by ensuring that the environment is conducive for operators and investors.
The Vice President who was represented by the Senior Special Assistant to the President on Industry, Trade and Investment, office of the Vice President, Dr. Jumoke Oduwole, stated that to improve ease of doing business in Nigeria, particularly trade across borders, the administration is focusing on critical infrastructure to achieve the objective.
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