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Nigeria losses N150 billion yearly shipping surcharge


EDITORS NOTE: Graphic content / A picture taken on April 8, 2019 shows shipping containers sitting at the Apapa Port Complex in Lagos, Nigeria’s economy hub. – The Nigerian port is congested with hundreds of ships, idly queueing for days to offload containers with goods. Lagos port congestion is affecting port operations and creating a severe backlog at ports, causing carriers’ containers to be held in port for extra days, as well as creating several miles of truck traffic at roads that links to port gates. (Photo by PIUS UTOMI EKPEI / AFP)

The multiple surcharges slammed on Nigeria-bound cargoes by foreign shipping companies now costs the country over N150 billion yearly.

This was revealed at the Sub-regional Summit on Shipping surcharges and High Local Shipping Charges held in Abuja yesterday.

According to a study on Impact of Unfair Surcharges and High Local Shipping Charges on National Economies of West and Central African States, Nigeria as a case study, on the Europe-Nigeria trade route, the number of multiple surcharges on Nigeria-bound cargo and the estimated loss to the Nigerian economy due to additional ‘Local Shipping Charges’ on imports exceeded N150 billion in a year.


These surcharges are Bunker Adjustment Factor, Currency Adjustment Factor, War Risk Surcharge, Congestion Surcharge Peak Season Surcharge.

Others are Extra Risk Insurance Surcharge, Freight Rates Surcharge, Port Operations Recovery Surcharge among others.

Vice President, Prof. Yemi Osinbajo has, however, rued the slamming of surcharges on Nigerian-bound cargoes by foreign shipping companies.

Osinbajo, who was represented by the Minister of Transportation, Rotimi Amaechi, bemoaned the process of the introduction of the surcharges, which he said lacks transparency and not based on verifiable and available resources.

According to him, the surcharges amount to huge sums of illegal capital flight from Nigeria and the other West and Central Africa countries.

He said: “These surcharges amount to huge sums of illegal capital flight from the countries of the sub-region depleting their limited foreign exchange or reserves.

“For instance, data obtained from Nigerian Shippers Council (NSC), confirmation of reasonableness of demurrage charges for Central Bank of Nigeria (CBN) revealed that more than N2billion is repatriated by multinational shipping companies in a quarter of a year.”

The vice president further stated that the introduction of surcharges without consultation contradicts the norms and ethics of maritime transportation.

“The process of introduction of theses surcharges lacks transparency and is mot based on verifiable and available statistics.


“In addition, the unilateral and arbitrary imposition of such surcharges on West and Central Africa bound cargo contradicts the norms and ethics of maritime transport.”

He, however, advised that the sub-region must at the summit adopt a common position on the reduction of incidences of unfair surcharges and related issues.

“The Federal Government through the Nigerian Shippers’ Council has put in place machinery to address some of the challenges posed by the high cost of doing business in Nigeria.

“For instance, in 2018, NSC harmonised the tariff nomenclature for local shipping charges in Nigeria, established a sustainable framework for future review of tariffs and established standards of service for all container terminals in Nigeria.”

Executive Secretary, NSC, Hassan Bello, argued that according to the United Nations Conference on Trade and Development (UNCTAD), surcharges are supposed to be a temporary measure to address peculiar challenges.

Bello, however, regretted that a temporary measure has assumed a permanence basis and stated that arbitrary and unilateral increase in charges wouldn’t benefit operations or general procedures in the country.

“According to UNCTAD, surcharges are supposed to be temporary measures by shipping lines involved in the shipment of goods worldwide to address peculiar challenges at a destination and are subject to removal when the situation normalizes. Regrettably, some of these charges have assumed permanence without justification or basis for negotiation.

“It is important to state that in the long run, arbitrary and unilateral increase in charges would not benefit operations or general procedures in our countries. A chaotic, unbridled situation of sporadic sometimes astronomical pricing regime is adverse to the development of shipping. It is a lose-lose situation.”

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