Menace of overtime cargoes at the ports
The revelation that over 8,000 stranded overtime cargoes, valued at about N3 trillion, are currently littering the country’s three major seaports – Apapa, Tin Can and Onne –is discomforting. To cap it all, it seems that little or no effort is being made to find a lasting solution to the nuisance; a situation that is bound to compound problems at the mismanaged ports.
Rather than finding a solution to the myriad of problems plaguing the ports, the issue of overtime cargoes has further added to the menace thereby giving the authorities more worries. Reports indicate that over 2,000 containers are abandoned at Onne port, while 6,000 are in Lagos ports of Tin Can and Apapa. The cargoes were abandoned by importers/consignees after the consignments were detained by the Nigeria Customs Service (NCS) officers.
The containers are currently occupying about 25 per cent of port space against the provision of the law. The Customs Excise and Management Act (CEMA) classify cargoes as overtime if the importer fails to clear and take delivery of it after 28 days at the port. Thereafter, the law allows the Customs to auction such cargoes after 90 days of arrival at the port. But the cargoes in question have spent no less than three years at the ports and are yet to be auctioned, which raises questions as to why the cargoes are not auctioned. From indications, untoward actions by the Customs and other authorities at the ports are to blame.
For instance, reports show that high duties, tariffs, as well as other unfavourable clearing conditions and policies, slammed on importers and exporters are the major causes of the rising number of abandoned containers. Over one year after the Nigeria Customs Service invested billions of naira into purchasing electronic scanners to fast-track cargo examination and release at the ports, the agency has yet to install the scanners for use, which is most confounding and embarrassing.
Why is it that despite taking delivery of new scanners since September 2021for Tin Can and Onne ports, as well as Seme border, the Customs still rely on a manual examination of cargo, with Customs agents complaining it takes over five hours to examine one container, thereby creating undue delays for consignees?
According to the Vice Chairman of Business Action Against Corruption (BAAC) Integrity Alliance, Lagos, Jonathan Nicol, the number of containers involved in the overtime cargoes has become intolerable, noting that the problem does not arise from importers’ unwillingness to clear their cargo but due to the harsh operating system.
He said Lagos has the biggest port in West Africa, with the volume of overtime cargoes sometimes rising to as many as over 6,000, which when computed, costs about N3 trillion. The space the containers take at the ports makes it impossible for import inflow as there is no space in the terminals for new cargoes, adding that the government warehouse at Ikorodu is shrinking already, having exceeded its capacity.
“Customs seized containers are abandoned daily. In a year, you get close to N3 trillion worth of overtime cargo as losses. For instance, you bring tiles for building materials and the customs place it under a particular regime where you have 1x20ft; you must pay a duty of N3 million; how much is the worth of the goods? Add other charges and levies that are paid to shipping companies, terminal operators, transport and the clearing agents, how much is the importer making?” he asked.
He said that government is losing revenue to overtime cargoes. “When people are losing their goods and containers, at the end of the day you receive these containers and auction it in the open market. They will prefer to go and buy their goods at an auction price. If it costs N15 to N20 million to clear the goods, the importer could buy those same goods at auction from the customs for N1 or N2 million, which is why they prefer to wait. That, exactly, is what is happening.
Apart from the custom’s encumbrances, the other factors contributing to the mounting overtime cargoes include too many surcharges, the illegal $400 surcharge on Lagos-bound cargoes, too many agencies at the ports doing the same job, excessive focus on revenue overdrive, strikes by different labour unions, bad access road, among others.
A little while ago, the Managing Director of NPA, whose territories and operating spaces were being clogged up by the consignments, during an interactive session organised by the House of Representatives Committee on Customs, demanded that NCS should auction the over 6,000 overtime containers at the various terminals to decongest the seaports. He pointed out that the Ikorodu terminal, which was designated as a location for evacuation of overtime cargoes was filled up.
The chaos at the ports clearly shows that there is no ease of doing business whatsoever. The chaos encourages importers as well as agencies to flout the rules. Non-professionals are appointed into strategic positions. The immediate past Managing Director of the Nigerian Ports Authority (NPA), Hadiza Usman, a greenhorn, was given such strategic position while the Customs Comptroller General, Hameed Ali, is a retired soldier. Actions such as these don’t make for professionalism in the port’s operations.
The way out as things are, is for the ports need to have a new lease of life. Government should give ultimatum to the customs to clear or auction the overtime cargoes forthwith. There is need for leadership change in order to instill fresh blood and professionalism at the ports. There are too many agencies the number of which should be drastically reduced.
There is no doubt that the ports are rotten. Granted there were problems that were compounded by the outbreak of the COVID-19. But the problem was not peculiar to Nigeria alone. Other countries were able to handle the interruption to get back to normalcy.
Certainly, there is need to reform the port system. Whereas Nigeria is an import-dependent country and there are fees to be paid, the process should not be made cumbersome for importers. And the same way importers are subjected to untold rigorous process, exporters, reportedly, face even more stringent hurdles. This should not be case for a country competing for prominence.