As most of the government agencies in the maritime sector compete among themselves on generating revenue to the Federal Government, paying lip-service to their core functions, PAUL OGBUOKIRI reports that the port industry now suffers huge infrastructural gap that cost Nigeria over N6trillion revenue annually
Focus on revenue generation for government
Maritime expert and President of Council of Managing Directors of Licensed Customs Agents (CMDLCA), Mr. Lucky Amiwero, has decried the poor state of the Nigeria maritime industry, saying that is despite the fact that over 70 per cent goods destined to West Africa ends up in Nigeria.
He disclosed that the country has lost the hub port status to the ports of the smaller countries in the sub-region, like Benin, Togo and Ghana. Cote d’Ivoire is coming up too, but Nigeria is nowhere in terms of ports infrastructure and efficiency of service.
He blamed the poor state of the Nigerian port industry on all the government agencies dissipating their energies on generating revenue to the Federal Government instead of realising their core mandate of developing the Nigerian port industry. “All are in the mad struggle to outdo one another in revenue generation.”
This came as the Organised Private Sector, OPS, recently admitted that the perennial gridlock in the Apapa ports and its environs in Lagos State was making the Federal Government lose nothing less than N6 trillion annually across all sectors of the economy. To corroborate this assertion, Mr. Aliko Dangote, the richest man in Africa, once said that not less than N20 billion was being lost daily to the deplorable state of the Apapa ports road in Lagos State, alone.
A shipbroker and member Institute of Chartered Shipbrokers, Mr. Mike Akoh, said that infrastructural deficit has led to security challenges, which creates room for unhindered illegal activities. He stated: “These inadequacies (infrastructural deficit) lead to security challenges because of lack of monitoring equipment/ facility thereby allowing free operations of illegal activities.” Similarly, another member of the institute, Mr. Mike Oyewo, said that a major implication of stowaways on the nation’s port industry is the increase of freight rate on cargoes destined for Nigeria. He explained that when the international shipping community gets to know that a country’s port is prone to high levels of stowaways, the tendency is for them to increase the rate as such ports are seen as danger zones. “The menace will impact on the Nigerian Maritime Administration and Safety Agency (NIMASA), drive towards a 100 per cent ISPS compliance of all Nigerian ports, increase in insurance premiums, delays in vessel schedule and threat to life of vessel crew,” Oyewo said. President of the Ship Owners Association of Nigeria (SOAN), Greg Ogbeifun, also berated the huge infrastructure deficit in the country, noting that lack of appropriate infrastructure for cargo clearance has hindered smooth business operations in the ports axis. According to him, there is no railway line and the Apapa access roads and internal routes are nothing to write home about, noting that containers fall on a daily basis while shippers are losing millions of dollars to accidents and long man-hour wasted on the road. Investigations showed that almost all the seaports across the country are facing challenges of poor road infrastructure which is hindering the evacuation of cargoes to various destinations. From Lagos to Onne, Port Harcourt, Calabar Ports and Onitsha River Port, the stories are not different, as importers and port users groan under collapsed road infrastructure.
Customs concentrates on revenue collection, with N4.1trn target for 2022.
The Nigeria Customs Service as the implementer of the Federal Government’s fiscal policies has the core role facilitating trade with the view of protecting the Nigerian economy from the influx of prohibited and dangerous goods. But the service, in recent years, has concentrated all its energy on revenue collection.
Last year’s biggest achievement is the collection of N2.2 trillion as a result of which this fiscal year it has been given a revenue target of N4.1trillion by the Federal Government.
But the Vice President of Association of Nigerian Licensed Customs Agents (ANLCA), Dr Kayode Farinto, said the service in its quest to meet these revenue targets has disregarded the main purpose of the government which is to impact positively on the social, physical and economic well being of the people. Farinto said: “Despite the harsh effect of the COVID-19 pandemic on the business environment, NCS by its activities seems bent on destroying the nation’s ailing economy.
“For selfish reasons and again, to generate revenue, the NCS continues to set up multiple task teams who allegedly reap importers off their hard-earned money, thereby frustrating the ease of doing business initiative of the Federal Government at the ports.
This situation is made worse by the arbitrary charges the agency introduced and is defending vigorously. Also, delays in cargo clearance, reckless interception of containers after legitimate clearance, are among the many other ills of the Nigerian Customs Service today. All these activities of the Customs Service impede rather than facilitate trade,” he said.
NPA, NIMASA join revenue collection, given targets
The Nigerian Ports Authority during a meeting in December 2021 with the House of Representatives, disclosed that the Federal Government’s search for revenue at the wake of the COVID-19 pandemic propelled it to raise its Internally Generated Revenue (IGR) between January and September 2021 by a significant 120 per cent.
It stated that the Ports Authority also reduced its operating expenses by 20 per cent of its budget in the review year. These facts were laid bare in documents that were presented by the Acting Managing Director, NPA, Mohammed Bello Koko, to the House of Representatives Committee on Ports and Habours. In the presentation, the Acting Managing Director said that, as at the end of September 2021, the Authority earned N256.28 billion in IGR as against the expected N214.65 billion (approved estimate N271.70 billion) for the same period, representing a performance of 120 per cent or 95 per cent of its total annual budget for 2021. Giving details about NPA’s operating expenses, Bello Koko revealed that, as at the end of September 2021, the NPA has actually cut down its operating costs by N10.39 billion, which is about 85 per cent performance of the approved budget of N87.32 billion. He explained to the Committee that actual spending was reduced to N55.10 billion from the budgeted figure of N65.49 billion, comprising employees’ benefits, pension costs, towage services, supplies, repairs and maintenance and other administrative overheads. This is actually a “savings” of N10.39 billion. Furthermore, in compliance with the quarterly remittance of its operating surplus to the Consolidated Revenue Fund (CRF) and provisions of the Finance Act 2020, the Authority remitted the sum of N62.66 billion to CRF for the year 2021 as at October 31, 2021, while a cumulative sum of N89.9 billion was transferred to the CRF between April and October. At the current state of increased revenue drive, it is projected that the Authority will exceed its 2021 revenue projections and the projected transfer to the CRF for the year 2021 which is expected to be over N80 billion, which would be the highest in the history of the Authority. However, while NPA is struggling to remit the highest revenue in history to the Federal
tion Account, it is losing grip on most of its core functions, mainly due lack of funds. One of such is the dearth of Gangway Men in all the seaports. According the President General of the Maritime Workers of Nigeria (MWUN), Comrade Adewale Adeyanju, the moment a vessel berths, the first two persons you are going to see to mount the ladder is Onboard Gangway Men “but the way it is now since they have terminated the appointment of the Stevedoring Contractor managing the Onboard Gangway Men and Tally Clerks, who are the real Onboard Security Men? Who is managing them? The union is saying that the Federal Ministry of Transportation and the Nigerian Ports Authority should look inward and bring back onboard gangway men as it is with international standards because all over the world, they recognise onboard gangway men to man the ladder.” He said the absence of the onboard gangway men is the reason for the drugs you are seeing on all vessels because anybody can just go into the vessel as a visitor. “Who stops them? Who checks them? Who identifies them?” “If you see what is happening in other terminals now, they are trying to use the ports as hubs for illicit drugs. But if we have the Onboard Gangway Men, they will be able to identify those coming in and identify what they have onboard the vessels.” On why the Marine Police has become ineffective, Comrade Adeyanju said: “All of them are busy making money for the government under the name revenue drive but they don’t know that we have the Marine Police who are not visible because you hardly see them patrolling the waters. Marine Police are to complement the effort of the Navy.” He disclosed that it is the duty of the marine police to patrol the brown waters but without patrol boats which is the duty of the Nigerian Ports Authority and Nigerian Maritime Administration and Safety Agency, the marine police will not be able to do its job more effectively. “I will take a bet that if the police are provided with adequate operational logistics that patrol boats piracy would have been defeated for long. But as a result, as the situation is, the navy cannot do it when there is conflict of interest. An attack can occur in our waters and the police have useful information on how to arrest the situation but they may decide not to take any action because their job has been taken over by the NPA and NIMASA.