• Saturday, June 22, 2024
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Ease of Doing Business Order in jeopardy as cost of clearing goods skyrockets


Nigerian importers have continued to pay dearly in cost due to the failure of agencies of government to effectively implement the Executive Order on Ease of Doing Business signed by Vice President Yemi Osinbajo, then acting President in 2017.

As a result, imported cargoes now dwell longer at the port, between 21 to 30 days, resulting to heavy congestion as well as longer timing for importers to clear and take delivery of their consignments. Longer dwell time for cargoes comes with huge cost implication such as payment of demurrage and rent charges on imported cargoes to shipping companies and terminal operators.

Precisely, importers using Lagos port pay more as shipping charges for bringing goods from European Union (EU) and high terminal charges when compared with what others using Tema Port in Ghana are paying, says SBM Intel, Nigeria’s geopolitical intelligence platform.

In Apapa Port, importers pay about $374 as shipping charges on imports from EU countries; $457 as terminal handling charges and $2,055 on local transport to importers’ warehouses.
However, their counterparts using Tema Port in Ghana, neighbouring West African port, pay $321 as shipping charges on import from same EU countries; $284 as terminal handling charges and $285 on local transport to importers’ warehouses.

According to the Executive Order, Nigerian port is expected to operate 24-hour round-the-clock and also prune down the number of government agencies at the port from 14 to seven. Therefore, Nigeria Customs Service (NCS) and service providers at the port must be on ground 24 hours to carry out cargo examinations in order to eliminate delays and cost associated with none clearing of cargo on weekends and public holidays.

BusinessDay recent visit to Apapa and Tin-Can Island ports reveals that, three years after the order, Customs only examines containers between 9am to 5pm resumption and closing time with exception of weekends and public holidays.

Confirming this, Hassan Bello, executive secretary, Nigerian Shippers Council (NSC), said recently during a virtual conversation that there was need for Nigerian ports to operate 24/7 just like the airport.

One of the reasons the nation’s ports are heavily congested today is because the ports operate from Mondays to Fridays without weekends, which has elongated the dwell time of cargoes as well as waiting time of vessels to 50 days, Bello said.

He insisted that dwell time of cargoes would reduce from the current 20 and above to seven days, if the ports operate 24 hours round-the-clock.

Giving insight into port operations, Tony Anakebe, managing director, Gold-Link Investment Limited, who explains that cargo examination starts from 10am or 11am in some cases and ends around 3pm to 5pm, says the Ease of Doing Business cannot be effective in the ports without government building infrastructure such as automating the cargo clearing procedure and installing a functional scanning machines.

“Officers of the Nigeria Customs and other agencies shut down their daily operations at 5pm, because it is very risky to be within the port environment at night given the security situation in the country. The access roads to the ports are bedevilled with persistent gridlock and Customs officers are going through hell due to the state of the road,” Anakebe says.

Anakebe further notes that only Customs officers that man the port gates work for 24 hour to allow agents, whose cargoes were released during the day to load their goods freely even at night, including weekends and public holidays, while the residence officers work within the business hours.

“The port is not well illuminated and this is why unfortunate persons are robbed by hoodlums within ports in Lagos at night. This was why clearing agents are also not coming forward at night to take delivery of consignments. Government needs to improve on the security system within the port by installing security cameras to monitor movement of persons and cargoes,” he suggests.

On multiple government agencies, Aminu Umar, a ship owner, who calls for reduction of the number of government agencies that go on-board vessels for clearance, states that ships with laden goods experience huge delay in Nigerian ports, which is affecting their operations.

“With this delay, demurrages also piled up for ship owners and this has created serious conflict between the ship owners and their clients. Also, based on the Nigerian Centre for Disease Control (NCDC) protocol, it takes a quarantine period of 14 days for a vessel to be allowed into the port, which is automatically two weeks delay,” he says.

He however urges the Nigerian authorities to adopt European procedure, which does not allow officials to board vessels but rather carry out virtual inspection of vessels in order to reduce human interaction as well as enhance turnaround time at the port.

Emmanuel Nwabunwanne, a Lagos based importer, who points out that the nation’s port industry has failed to streamline the number of agencies involved in cargo clearing, says Customs alone has more than 15 multiple taskforces that monitors same container.

This, according to Nwabunwanne, brings a lot of delay in the clearing of goods as it is mandatory that the documents for clearing one container must pass through the tables of these taskforces before the container would be allowed to exit the port.

“For instance, there is CG taskforce, Monitoring Team, Strike Force, Abuja Alert and Federal Operations Unit. At the level of the port command, there is Area Controller Task force or Monitoring Team, Terminal DC Monitoring Team, Resident Customs, Customs Intelligent Unit (CIU), Enforcement and the gate officers.

“These multiplications of duties have created a lot of problems in clearing of goods at the port and the Customs management must reduce some of the taskforces because they are doing almost the same work and elongating dwell time of cargoes,” he suggests.