‘Kaduna Dry Port is strategically located to harness untapped opportunities’
The Kaduna Inland Dry Port (KIDP) is the pioneer in this line of business. With new dry ports coming up soon, what are KIDP’s unique selling points and its advantages over those that are springing up?
THE Kaduna Inland Dry Port (KIDP) has the advantage of being the first dry port in the country even though it faced a lot of challenges at the beginning, which will become history within a very short time with the government’s intervention.
KIDP is strategically located at the centre in the North, is linked to many states, and those who have cash crops and mineral resources can consolidate them at the KIDP warehouse, from where they would be moved to the seaport of destination. That is the first advantage.
Second, globally, ginger is a popular product that is in high demand and a good source of revenue for the state. Therefore, farmers and brokers can take advantage of our presence, consolidate in our warehouse and take their produce to the ports. Of course, doing so immensely facilitates the movement to the port.
Additionally, we will empower the rural areas and that will encourage farmers to produce more and make more money, while the state government also generates more revenue.
Last, but not least, it will expose the shipping business to would-be investors. Already, people, including retirees have been coming to make inquiries about what is going on here. And that is why I have been saying that there are so many areas to tap into because the shipping business is very vast.
Manufacturers can also receive their raw materials through the port.
The KIDP is also a fine location for key players in the Kaduna manufacturing sector to pick up their wares.
As you know, manufacturing companies are close to the Lagos seaports to enable them to receive their raw materials fairly easily. Companies in Agbara and those around the Lagos-Ibadan Expressway are benefitting from this.
Does the KIDP spend more due to the ineffectiveness of the rail system, especially since access to the port by rail has stopped for some time?
Well, it is not only the company that is spending more, importers and exporters spend more when the rail is ineffective, and this increases the cost of doing business. However, the moment customers, importers, and exporters know that the rail is working again, it will attract more businesses to the port. Talking about cost, we can imagine moving cargo from Lagos to Kaduna for about N1m or more depending on market demands. But it should cost less than 50 per cent of that to move the same amount of cargo by rail. Imagine spending less than 50 per cent of N1m, the remaining 50 per cent means a lot to the importer and the end user because, in the end, manufacturing companies don’t joke with material cost. It will also have other multiplier effects, including enabling all manufacturing companies that closed down in Kaduna to spring up again because we are within the industrial area.
I always said that what gives Lagos an edge is the international airport and seaport that are situated there. In Kaduna, we have an international airport and a port, and if these challenges are addressed, within three to five years, we will see how business activities will blossom because we have a wide catchment area. Indeed, with our location at the centre, we have Niger, Katsina, Kaduna, Kano states, and even Abuja in our catchment area. We are also very close to Niger Republic. About two years ago when we met with shippers in Niger Republic, they were saying that moving their goods from Ivory Coast or Benin Republic was quite expensive and that they would prefer their goods passing through Kaduna, which is about three to four hours to the border by road.
Importers are allegedly subjected to double clearing in Lagos and in Kaduna? What exactly are the issues involved as the additional cost is a disincentive to users of KIDP.
First, let me say this, when you say you want your goods at KIDP, what you need to do is tell your shipper at the port of loading that you want it moved down to KIDP as your final destination. What a lot of people don’t understand is that there are certain procedures that importers must follow in order to get their goods moved from the port of loading to their port of destination; they have to pay for inland and ocean freights. You don’t only pay for ocean freights and expect your goods to come to Kaduna. Additional cost of Inland freight should be factored into the cost during budgeting and planning for importation. What really should happen in an ideal situation is that at the point of moving your goods, you should tell your shipper that these goods are going to KIDP so that you are mandated to pay for inland and ocean freights. Once that is done, it will address the so-called issue of the double clearing. However, those affected should not call it double clearing, but customs handling because here, we are still using the status of the bonded terminal to carry out dry port operations, which does not augur well.
What we are supposed to do is for stakeholders to sit down and perfect the port’s operations because we are facing all these due to the fact that we are the pilot dry port. The ones that are coming up don’t have bonded licenses, and are going to face the same problem that we are facing, but still managing to thrive because we have a permit to operate as a bonded warehouse operator.
What has your half-year overview been like, and how has the COVID-19 pandemic affected the operations of the port?
Nobody expected the COVID-19 pandemic, but it nevertheless showed up and really affected not only the KIDP, but the Nigerian and global economy. Port/shipping business, which is international in nature was no doubt affected. For instance, the exchange rate, which last year was N360 to $1, is now over N500 to $1. Consequently, our customers have reduced their volume of imports.
Also, despite the pandemic, we were still able to perform better than we did in 2019. So, what we had then was over 3, 000 twenty-foot equivalent units (TEU), but for last year, we had over 4, 000 TEU for the whole year. So far this year, there have been improvements and we have given ourselves a target of 7, 500 TEU because of these extreme rates and inconsistent Customs policies that are affecting business.
However, we are already having problems regarding how the KIDP should operate because there is a standard procedure as a pioneer dry port and destination port.
Globally, cargoes have to move from port of loading to port of destination, but that is not the case here, and that has also affected us and contributes to some of the setbacks that we have experienced.
Again, since we are still using the existing status of bonded warehouse, containers that are coming down to the KIDP must strictly conform with Customs formalities. For instance, on the issue of container dropping, the Customs Area Controller for Kaduna will make a request to his counterpart in Apapa, Lagos, whose officers would thereafter send transaction requests before they would commence processing. All these processes are time-wasting and not good, particularly for a dry port like ours. Cargoes destined for KIDP should be given preferential treatment and made to exit Lagos to Kaduna faster for other formalities.
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