Coming three years after seaports nationwide were concessioned to private terminal operators to boost efficiency and quality of service, the on-going ship and cargo congestion at Lagos ports may seem illogical and more of a paradox. The transfer of terminal operations from the Nigerian Ports Authority (NPA) to private operators was supposed to stave off the congestion now stifling maritime activities and business transactions.
By conservative estimates, over 30,000 twenty tonnes equivalent units (TEUs) of laden containers are yet to be cleared at Lagos ports, excluding those at the numerous privately run bonded terminals. Some of them have been in the ports for more than nine months. The implication of having so many containers awaiting clearance is that arriving vessels have very limited space to discharge their consignment, leading not only to a major accumulation of containers but also ship congestion as they are unable to berth and discharge. This is the present scenario in Lagos ports. The net effect is that ship owners may impose surcharges on goods destined for Nigerian ports, additional costs will be incurred through demurrage and there will be a general increase in the cost transacting business through the ports.
Rather than employ off-the-cuff and short-lived strategies in addressing the problem as the plan to just auction the containers is, a deeper and holistic evaluation of the situation is imperative.
There are three facets to congestion at the ports, namely cargo handling capacity of the port, procedure for delivery of goods and the integrity of users of port services. In terms of capacity, no new port has been developed in the past 30 years since the Tin Can Island Port and new sections of existing ports came on stream. The exception is the privately built Ports and Terminal Multiservice Limited (PTML), a facility devoted mainly to the handling of vehicles. In 1999 when Nigeria returned to democratic rule, import and export tonnage amounted to 22 million metric tonnes. Less than 10 years later in 2007, total cargo traffic through the ports had risen to 54 million metric tonnes. And although there are other ports in other parts of the country, Lagos ports still handle more than 70 percent of all cargo traffic.
On procedures for cargo delivery, the process is still bogged down by the unnecessarily high number of federal agencies involved in the clearing of goods. At the last count, up to 11 separate organisations, some with additional task forces and special teams have contrived to remain part of the clearing process with barely discernible functions. More remarkably, there is little or no integration among them and virtually no electronic interface.
Integrity is crucial in shipping transaction as it is in every other business. Integrity is equally one of the factors at play in the congestion at the ports. With a duty regime generally considered unfriendly and a long list of prohibited items, schemes by consignees to beat the payment of appropriate duties through under-declaration of goods and falsification of documents are not in short supply. In the event that they are unable to actualise their scheme, this category of importers abandon their containers at the ports of routinely leave them with vain hopes that something might just give.
These three factors, to varying degrees, are at play in understanding the congestion at the ports. A recommendation at a recent stakeholders’ forum to evaluate the situation – prompt auctioning of the affected containers – begs the question.
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The fact that no new ports have been developed in the past 30 years in a period that the country has recorded phenomenal growth in international trade as well as a growing population underscores the fact that Nigeria’s ports lack capacity. It also exposes the shortcoming of the port reforms undertaken three years ago that only emphasised the concessioning of existing ports to private operators without a programme to encourage the development of new ones.
The present congestion calls for a thorough evaluation of the status and dynamics of our port system with attention devoted to developing new ports through creating a clement investment climate for the private sector and streamlining the cargo clearing process by reducing the role of the human element. This will entail the reduction of the number of agencies involved in the supervision of the process to not more than three, and increase the application of information technology and electronic interface among the approved agencies. As the factors that encourage importers to continually seek to circumvent and thwart the clearing process are being addressed, government should also evolve strategies for encouraging importers to use ports outside Lagos as their point of destination.
Adopting only the stop-gap measure of just auctioning the abandoned containers may in the medium and long term be counter-productive.
