Apapa gridlock: How corruption, vested interest ambush solution, hurt businesses (2)
The business community using Apapa and Tin Can in Lagos ports says corruption by security and government agencies has assumed a new proportion and is already sending wrong signals to investors.
BusinessDay, on Monday and Thursday, detailed a well-organised racket going on at Apapa and Tin Can ports called ‘Fastrack,’ where truck drivers pay N250,000 to N350,000 to get speedy call-up, entering the ports before others on queue.
Apart from this open sleaze going on between truck drivers and security agents, importers and their agents are also encountering serious delays during cargo clearing, which compels them to pay demurrage to shipping companies for no fault of theirs. The simple reason is that the Nigeria Customs Service (NCS) carries out physical inspections because it does not have functional scanners and Single Window platforms.
Due to physical inspection, the management of the Nigeria Customs has succeeded in creating multiple units that are involved in cargo clearing at ports.
A recent visit to the port shows that currently, Customs has over 12 different units at each port and they include Enforcement, Valuation, Customs Intelligent Units (CIU), Residence, Taskforce, Strike Force, CG Squad, Headquarters Strike Force, Customs Police, Special Weapons and Tactical Team (SWATT), Abuja Alert and the Federal Operations Units that mount checkpoints right at the port gate.
These units are involved in cargo clearance such that importers and their agents must seek approval of their documentation before the release their cargoes.
Vicky Haastrup, chairman, Seaport Terminal Operators Association of Nigeria (STOAN), condemned the high rate of manual examination of cargoes at the ports, saying deployment of automated scanners would drive and enhance cargo clearing process.
Haastrup, who spoke in Lagos during a virtual conference held recently, said manual examination of cargoes was not efficient, saying, “We have a situation where people must visit the port physically to do Customs documentation and cargo examination before they can take delivery of their consignment. This is inefficient.
“It is a shame that Nigerian ports do not have quality and functional scanners, which is why Customs relies on physical examination of containers, which drives human traffic into the port. We need to provide these scanners and other automation platforms in order to make cargo clearance quicker. Nigerian ports must operate the one-stop-shop platform, if we must compete with other ports in the West and Central Africa.”
Industrial clusters suffer
Apapa is becoming a failed industrial cluster already. Companies in the port city such as Flour Mills, Honeywell, Dangote, among others, are bearing huge logistics costs and losing their vital customers. The situation has extended to Amuwo-Odofin and is disrupting productive activities at the cluster.
In a recent interview with BusinessDay, Osaro Omogiade, managing director of Amuwo-Odofin-based Nosak Distilleries, said the whole of the industrial cluster had been taken over by trucks, making lives and access to the factory tough.
“You can see that the whole of Amuwo-Odofin has been taken over by trucks. They line up along the road and block everywhere. To access your factory is a very big challenge. It is not just us but all companies in Amuwo-Odofin. At times, you park your vehicles somewhere and walk down to the factory. It is a huge challenge. The pains are enormous; the various players in Amuwo-Odofin know what they are going through,” he said.
Key players say the whole situation still boils down to corruption.
“When Customs stops you and you allow them to take you to their office and not settle on the road, you will spend nothing less than five days and you will pay up to N500,000 and 600,000 to them because they want to please their superiors in Abuja,” one key player at the ports told BusinessDay.
“By the time you are doing this, your demurrage is counting because you deposited N200,000 with the shipping company and from that, they take something every day. If you delay up to 10 days, it means the money is gone. And that business will be a total loss for you.
“So, the wise thing to do when they threaten you is to settle so that you can continue with your journey. This will not cost you more that N50,000 or N100,000. When this happens, the truck driver will be happy because it means more money for him. Your agreement with him is for one day. If it increases to two, three or four days, it means he has more money to collect for the extra days.
“The SWAT Team and the Strike Force are supposed to checkmate the FOU (Federal Ordinance Unit), but they are one and the same thing. All of them are just ‘come and chop’ groups. If the FOU arrests you, they will tell you to give them N100,000, but because of the SWAT Team and the Strike Force, you will make it N200,000. There, in your presence, they will send their own share and the number of your container such that when you are passing, they will pretend that they did not see your truck,” the player said.
Failure to export empty containers
The failure of international shipping companies that do business in Nigerian seaports to effectively retrieve and evacuate their empties has been blamed for lingering congestion in port terminals and persistent traffic gridlock on roads in port cities.
This explains why nearly all roads, streets, bridges and under bridges in Lagos, especially those that have connection with Apapa have been turned into parks for container carrying trucks.
The most affected roads include Apapa-Oshodi Expressway (Cele to Mile 2 axis); Awodi Ora and Wilmer roads in Ajegunle; Kirikiri; Lagos-Badagry Expressway, Orile Igamu; Second Rainbow down to Apple Junction; Ago Palace Way; Ikorodu Road; Ijora; Eko Bridge, and among others.
Consequently, residents in areas like Amuwo-Odofin, Festac, Iyana-Oba, Satellite Town, Ajegunle, Apapa, Surulere and many other areas in Lagos are presently losing long man-hour while going to their offices, market places or returning home after the day’s job.
Within the port terminals, there is close to 90 percent yard occupancy, indicating high rate of congestion and longer dwell time for imports. This has also elongated waiting time of vessels as ships now spend between 30 and 50 days on Nigerian waters before accessing the ports.
Jonathan Nicol, president, Shippers Association Lagos State, stated that terminal operators were responsible for receiving empty containers on behalf of their principals – shipping companies, which were responsible for the export of the empty boxes. He said shipping firms were deliberately refusing to retrieve and export their empties.
According to Nicol, refusal to export empty containers has become a threat to Nigeria shipping trade as it results to artificial port congestion leaving little space for container with laden goods.
This, Nicol said, has brought untold hardship on shippers because when there were scanty spaces left due to deliberate refusal to evacuate empty containers, shipping lines would introduce congestion charges against the shippers.
He further stated that there were over 65 percent of empty containers not fit for evacuation in Nigeria, which was probably because most of the containers had outlived their usefulness and cannot be exported.
Any light at the end of the tunnel?
There, however, seems to be light at the end of the tunnel. Determined to decongest ports in Lagos, the Federal Government is perfecting arrangements to ensure that Onitsha River Port begins full operations in the first quarter of 2021.
Jibril Darda, acting general manager, corporate affairs, who confirmed this recently to BusinessDay, said the authority recently carried out a test-run movement of containers from Onne Seaport to Onitsha River Port.
Darda, who described the operation as the first phase of test-run, said the operation would also involve movement of export goods from Onitsha River to Onne Seaport.
According to Darda, the second phase of the test run would involve movement of container from Lagos Seaports to Onitsha River Port as well as returning empty containers and export goods from Onitsha to Lagos ports.
Queen Uba, area manager of NIWA Area Office Onitsha, Anambra State, told newsmen in Onitsha that NIWA had been making frantic efforts toward full operation of a port in the South East since George Moghalu assumed office.
Experts believe this would help to decongest Apapa and Tin Can ports.
The way forward
In an interview with BusinessDay, Ambrose Oruche, acting director-general of MAN, explained that the congestion at Apapa was not only hurting manufacturers’ capacity to import inputs or export finished products but also threatening factories located around Amuwo-Odofin and Apapa axes.
He explained that the situation was raising demurrages paid on in-bound raw materials and out-bound manufactured products, adding to already bloated production costs in several companies. He commended the efforts of Lagos State government geared towards resolving the Apapa conundrum but acknowledged that the efforts were not sufficient.
“Manufacturers are suggesting that a rail line be constructed in a way that it conveys containers out of the ports to the terminal,” he said.
“They also want to be allowed to use barges through Ikorodu,” he further said.
Chris Ukachukwu, president of Onitsha Chamber of Commerce (ONICCIMA), said in a statement sent to BusinessDay that the chamber found it incomprehensible that all seaport projects remained concentrated in Lagos while the ports in Onitsha, Calabar, Port Harcourt, Sapele, Warri, Escravos, Forcados and Onne were yet to run at optimum capacity or even explored as in the case of Onitsha River Port.
“There is a need to ensure that all hindrances to the transporting of barges, like the need for continuous dredging of the River Niger, managing the pricing regime and other operational requirements of the port are adequately addressed in order to open up unprecedented patronage of the eastern ports,” Ukachukwu stated.
The Lagos Chamber of Commerce and Industry (LCCI) said it would be necessary to construct a rail line into the ports.
“Our desire is for Nigeria to get to the point where it can move containers and other items to and from ports by rail across the country,” LCCI said in a recent statement.