Port inefficiency, tariff barriers threaten access to $3.4 trillion African market

•Stakeholders want regulations streamlined
•NPA, NCS urged to focus on core mandates

Multiple challenges including inefficient port infrastructure, un-unified currency, regulatory gaps, insecurity, lack of funds, high freight rates, poor turnaround time in cargo clearance, complex Customs processes, inadequate storage capacities, low fleet ownership, tariff and non-tariff barriers have been identified as major limitations to Nigeria and Africa maritime preparedness and success at the $3.4 trillion Africa Continent Free Trade Agreement (AfCFTA).

These were the submissions of stakeholders yesterday, at the Lagos Chamber of Commerce and Industry (LCCI) Maritime Group symposium with the theme: “AfCFTA: Issues and Matters,” held in Lagos.

The Executive Secretary of the National Action Committee, AfCFTA, Olusegun Awolowo, said while AfCFTA represents a transformative opportunity for immense potential for economic growth, trade and integration, Nigeria stands at the crossroads of this historical development and needs to tackle the challenges, especially the maritime matters with steadfast determination and strategic foresight.

Awolowo said Nigeria must identify efficient maritime infrastructure as a backbone of trade facilitation to leverage on the AfCFTA fully.He said Nigeria should enhance her ports, terminals, transportation networks, invest in modernise port facilities, streamline Customs procedures and interconnected transport systems, which are essential to ensuring the seamless movement of goods within and across her borders.

According to him, the Nigerian Ports Authority (NPA) has only focused on receiving and making Nigeria an import-dependent country for centuries, while the Nigerian Customs Service (NCS) focused on revenue generation rather than trade facilitation, which is its mandate.

He said the lack of focus on the agency’s core mandates to make Nigeria an export-led economy has made the country lose out on trade, which is a big problem for the preparedness of AfCFTA.

Awolowo also noted that due to a lack of vessels to transport goods within Africa, shipping goods from Nigeria to Ghana or Benin Republic, must first go through Amsterdam and then come back to its destination, noting that Africa cannot survive with such an expensive situation.

He equally pointed out that Africa must continue to work to harmonise maritime regulations and enhance standards, security and safety protocols as well as operations across the continent to inspire confidence among the traders and workers.

“It is not a different protocol from Ghana, Senegal and Nigeria, it is the same maritime and ships, so how can your laws be different? We must prioritise investments in modernising our ports, terminals and transport metrics. Public Private Partnership (PPP) should be encouraged to form infrastructure projects, promoting efficiency and competition,” he said.

The President of LCCI, Dr. Michael Olawale-Cole, said achieving AfCFTA’s full potential will depend on putting in place significant policy reforms and trade facilitation measures. He said while the implementation of AfCFTA will see 132 million tonnes of cargo transported by 2030, it would require about 126 vessels for bulk cargo and 15 vessels for container cargo.

Olawale-Cole said there is a need to address the myriad of challenges in the maritime sector including regulatory gaps, security, funding, high freight rates, poor turnaround time in cargo clearance, inadequate storage capacities, low fleet ownership, tariff and non-tariff barriers.

Other challenges, he said, include skills gaps, the absence of shipbuilding and recycling, as well as weak regulatory and legal frameworks in monitoring illegal activities in the sector.

He said Nigeria must plan and leverage its strategic geographic location and abundant natural resources to optimise the potential of AfCFTA and position itself through policies, investment in ports and vessels to compete effectively in the transportation of enormous sea trade and commerce.

President, Nigeria Shipowners Association (NISA), Sola Adewumi, said to encourage Nigeria’s shipowners to participate in AfCFTA, the country must first recognise and address the challenges they face, which include infrastructure limitations, regulatory complexities and market barriers.

Adewumi, who spoke on, ‘AfCFTA Issues and Matters as it Affects Nigerian Shipowners’, said vessel owners require collective support to navigate these obstacles and flourish within the AfCFTA framework.

He said Nigeria must encourage the participation of shipowners through infrastructure investment as the success of AfCFTA relies heavily on efficient infrastructure.

According to him, Nigeria, like many other African nations, has infrastructure gaps that could hinder the movement of goods and services. Adewumi also pointed to simplifying regulations and trade procedures, while working closely with relevant authorities to streamline customs processes, harmonise trade documentation, and reduce bureaucratic red tape.

Speaking on access to finance, Adewumi noted that shipowners often face financial constraints in maintaining the existing ships, expanding their fleets and operational costs, adding that no Nigerian shipowners can compete favorably with their counterparts with the present bank lending rates.

The Chairman, LCCI Maritime Group and President of the Nigerian Chamber of Shipping (NCS), Aminu Umar, said for AfCFTA to succeed, Africa must look at the currency of trade.

He explained that for Nigerian companies and those of other African countries to source for dollars to transact businesses is a very big hindrance to trade. Umar urged Africa to take a cue from the European Union which uses a single currency to trade among its member countries.