An exporter that left Kano for Lagos with a consignment of Sesame, which in the last quarter of 2020 was Nigeria’s top agricultural export with a value of N270 billion, is about to encounter a rude shock. Worth a few billions, the value of this shipment heading to Lagos is a fraction of what Nigeria typically exports. But this would now be delayed for at least 2 weeks because the Lagos ports are clogged, and the Nigerian Ports Authority (NPA) has suspended trucks with export goods.
According to the NPA, over 600 trucks are trapped within the port corridor for different reasons, and until they are cleared, others planning to export are on hold until further notice, or two weeks, if that deadline is made sacrosanct.
“It is a very dangerous development in the sense that you are toying with the source of existence (for some businesses),” notes Madu Obiora, director-general, African Centre for Supply Chain, saying, “With proper planning, there would always have been a better way.”
In two weeks, anything can happen in an industry where transactions are bound by contracts and deadlines, but even the two-week period is not likely to be sacrosanct. Exporters who have to wait until the current backlog is cleared would have also formed another lengthy queue of exports, and would essentially be back to square one unless the perennial inefficiencies plaguing the Nigerian ports administration are actually fixed.
The delay in time to export would further worsen the conditions of export businesses struggling to survive in a fragile economy that is also in dire of foreign exchange, which ironically, these same businesses would bring if life is not snuffed out of their operations.
“In export, once you sign an agreement with the buyer abroad and it takes you two weeks or months to access the port and there is rejection, it becomes a double tragedy,” noted John Isemede, a consultant on Export Value Chain to the United Nations Industrial Development Organisation (UNIDO). “This is because those goods still have to be brought back to Nigeria. It is like collecting a corpse from the mortuary,” Isemede said.
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Going by the NPA’s analogy, it presupposes exporters from different parts of the country embark on journeys of several hours or even days by road, heading to the port terminals in Lagos without having the required documentation for the goods to be exported. The trucks stay put as they ‘must’ enter the port, and have now caused the backlog of what NPA puts at 600 of such trucks, clogging the export corridor and contributing to traffic in the wider Apapa vicinity.
There are no known scapegoats of the supposed infraction, neither are there known penalties for those who indulge in it. Its response? The NPA is suspending trucks with export goods from entering the ports for the next two weeks, rather than fix the processes that allowed it in the first place.
“Is there any procedure in place accompanied with punishment for contravention and who have they penalised for us to use as a case study,” wondered Isemede of NPA’s claim that trucks swarming on the ports without documentation needed to export were solely to blame.
Exports would not stop completely, of course, as the 600 trucks supposedly clogging the export corridor would have to be cleared first. Also, refrigerated goods are to be let through. Others would have to wait for two weeks, paying the price for an inefficient port system.
“If we are banning exporters for two weeks, how much will the economy lose? Is Nigeria going to run on crude oil sales alone?” Isemede asked.
Non-oil exports were N1.43 trillion in 2020, a decline from N2.52 trillion in 2019. With the backlog now being contended with, and the missed opportunities that may occur from delays, it is yet to be seen how much would be further lost from the already declining non-oil exports.
As earlier reported by BusinessDay, Hadiza Bala Usman, managing director of the NPA, had noted that many of the trucks causing the backlog had not completed certifications required from supervisory agencies based on the type of export they were carrying. This also included several Customs certifications and the Central Bank of Nigeria (CBN) documents that they need to complete.
However, an electronic call-up system introduced last month was meant to bring sanity to the ports, as trucks were not to leave designated parks until they were asked to approach the ports to get their business done. Somehow, the process of introducing the e-call up omitted ensuring proper documentation was done before a truck was authorised to approach for import or export of shipment.
“If the exporters are coming into the ports without prior approval and clearance, the question; is export business on a single-window platform like imports? If not, why is it that import is on a single window, and is run by ICT while export is run on pieces of paper?” Isemede, again, asked rather rhetorically.
