Maritime Trade in Nigeria – Opportunities & Challenges

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Globally, the efficiency of ports operation of a country is its major driver of trade and economic activities. In Nigeria, revenues from ports are about the third highest, behind oil and revenues generated by the Federal Inland Revenue Service.

Though the Nigerian ports are considered inefficient because of the huge down time in clearing and exporting goods, the ports remain a fulcrum of its economy.

Perhaps the most disappointing news in the sector in the year was the inexcusable failure by the Nigeria Maritime Administration and Safety Agency (NIMASA) to get Nigeria elected into the International Maritime Organisation (IMO) council after a massive campaign. Nigeria, for the third consecutive time lost its bid to get re-elected into category ‘C’ of the International Maritime Organisation.

At Nigeria’s expense smaller countries such as Jamaica, Kenya and Liberia were elected into the IMO council. The last time Nigeria won its IMO Council bid was in 2007

The Lagos Chamber of Commerce and Industry (LCCI), in a report titled, “Nigeria: Reforming the Maritime Ports,” estimated that over N1 trillion annual losses in Nigerian ports and business community occur due to port inefficiencies.

The LCCI also said that about 71 per cent of the time spent to import and 64 per cent of the times spent to export are linked to delays at the ports, making Nigerian ports uncompetitive to even the neighbouring Ports of Benin, Lagos and Togo.

Efforts to Rebuild the Maritime Industry

During the presentation of the 2018 budget to the National Assembly, President Muhammadu Buhari projected that the much-expected rail to link Apapa and Tin-Can Island ports would come on stream by the end of this year. This, the government said, is part of efforts to reposition the sector.

Stakeholders’ Demands

The stakeholders in the sector want that the government should formulate a holistic policy that will enable the country to maximise the benefits of oceans, seas and water this year.

The Association of Nigerian Licensed Customs Agents (ANLCA) President Prince Olayiwola Shittu said that Nigeria must emulate countries  like Britain, Rome, America, Australia, Canada, Turkey, Norway, Belgium, Greece, Singapore and India on how best to use the sea to boost the economy.

Challenges for Nigeria

Some of the known challenges that have made Nigerian ports largely inefficient over the years include infrastructure shortcomings, policy and regulatory inconsistencies, overlapping functions and duplication of roles among ministries, departments and agencies operating at the ports and high incidence of infractions.

Port reforms usually have the general objective of promoting global trade through faster clearance of goods, shorter waiting times for ships awaiting berth, and eliminating redundancies in the functions of the several regulatory, government agencies in the ports, among others.

Initiatives and Reforms to Boost Maritime Trade

The Bonny Channel Company’s objective is to create and maintain a safe navigational passage for all marine users, to and in the Eastern Ports of Bonny Island, Onne, Okrika, and Port-Harcourt. The BCC is said to have impacted positively on shipping operations in Nigeria.

The company’s dredging of the Bonny Channel from fairway buoy to KP27.5 to a depth of 13.8m in 2009 enabled the Nigeria LNG Limited (NLNG), to operate round the clock, seven days a week with no tidal restrictions. In 2011, the BCC deepened the channel even further to accommodate larger vessels.

Ports’ Access Roads

The ports’ access roads have not attracted the government’s attention. Those leading to the Apapa and Tin-Can Island ports in Lagos are so bad that some stakeholders have described them as a “shame to the nation”, despite efforts by the Dangote Group to fix part of the road.

The bad roads have constituted nightmares to consignees, importers, exporters, freight forwarders and other port users who use the roads to evacuate their goods. The chaotic situation on the road is making port users spend hours daily to access or exit the terminals.

Command & Control, Communication and Intelligence Centre

The unveiling of the Command & Control, Communication and Intelligence Centre by the NPA was seen as one of the giant strides taken by the authority last year and needs to be improved upon this year to boost the government revenue.

The facility is good because it serves as surveillance for NPA’s activities and for security agencies. Besides, the Revenue Invoice Management System (RIMS) has improved service delivery and reduces revenue leakage.

 

Acquisition of Tug Boats, Dedicated Terminal for Exports

The acquisition of four new tug boats – MT Daura, MT Ubima, MT Uromi and MT Majiya by the NPA was part of the good policy initiated by the authority to improve operational efficiency that must be sustained this year.

The development of a Standard Operating Procedure (SOP) and establishment of a dedicated terminal to handle exports is aimed at diversifying the economy and improving earnings in line with the mandate of the Federal Government.

The terminals development project has seen Ikorodu Lighter Terminal for Lagos, Shoreline logistics terminal for Calabar Port and Bua Ports improve operations. This year, all the terminals must be mandated by the NPA to establish dedicated desks that will handle all documentations on export, receipt of consignment and the loading of vessels to boost the ease of business.

Piracy in Nigerian Waters

While the problem is still of grave concern in the Horn of Africa, another part of the continent has overtaken it as the most dangerous region in the world for seafarers—the Gulf of Guinea in West Africa, and in particular the waters south of Nigeria’s oil-producing Niger Delta region.

The International Maritime Bureau (IMB) has recorded more than 100 piracy incidents in international waters in 2017, including shootings, attempted kidnappings and hijackings of ships. It described in a recent report that the Gulf of Guinea remained a “hot spot for attacks”, despite a fall in the number of incidents elsewhere in the world.

Throughout 2015, 54 pirate attacks were reported in the Gulf of Guinea, which was actually a slight decrease on the 67 recorded in 2014, according to an annual report by maritime security monitoring group Oceans Beyond Piracy (OBP).

But the attacks had deadly results—23 people were killed by pirates in the region in 2015. In comparison, records of attacks in the Western Indian Ocean region—which covers activity by Somali pirates—show only 16 attacks and no deaths in 2015.

As well as the human cost, piracy and armed robbery in the Gulf of Guinea cost governments and industries an estimated USD 720 million, largely in security fees.

The Way Ahead

Cargo dwell time (CDT), the average time a cargo remains in the terminal from the point of discharge to the point it exits the terminal, must be improved upon significantly this year. The government must support NPA and the Nigerian Shippers Council in ensuring that human contact, which breeds corruption in the seaports, airports and international land borders are eliminated to boost the campaign for 48-hour cargo clearance regime announced by the Federal Government.

About 90 per cent of goods are still subjected to physical examination as against use of the mobile and fixed scanners. A lot of deals devoid of transparency and integrity that are taking place at ports and international land borders must be addressed seriously by the government this year.

Seventy-six per cent of shipping business that takes place in West Africa is done in Nigeria, which means that the country is very important in the continent sea ladder. Maritime trade, must therefore, be of great interest to President Buhari and the Federal Executive Council (FEC) to boost the economy.

Sea News Feature, January 3