Manufacturers fault port operations over extortion, rigorous process

Manufacturers in Nigeria have tabled complaints about the country’s port activities, which aggravate business and commercial challenges in what is described as an unfriendly business environment.

Sector players argue that the unnecessarily rigorous process of clearing goods from the ports and extortion by port operators affect the productivity of the sector.

Frank Onyebu, chairman, Manufacturers Association of Nigeria (MAN), Apapa branch, said 2020 was a tough year for the sector due to baggage of problems, especially the impact of the coronavirus pandemic and which caused a strain on its activities, causing some players to shut down operations, leading to massive job loss and income cut.

He mentioned that the global lockdown affected the production process of many manufacturers who had to source raw materials and other resources abroad, adding that the activities of the congested ports in Nigeria – the Apapa and Tincan ports – worsened the plight of many manufacturers as issues around port and goods accessibility, charges remain a challenge.

“The port operations have worsened overtime, the haulage fees which use to cost between N150,000 to N200,000 surged between N1.5 million to N2 million. In addition to this, the clearing time at the ports was also extended from two day to two weeks, which significantly affected clearing operations, this has made many manufacturers incur more cost,” Onyebu said.

This claim is also affirmed by the Manufacturers CEOs Confidence Index (MCCI) for the first quarter of 2020 compiled by the MAN, as 94 percent of the respondents who are CEOs of manufacturing companies agreed that poor accessibility to the national ports negatively affects productivity in the sector.

“Despite a number of interventions by the Federal Government, the persistent gridlock in accessing the country’s port facilities and perennial congestion has remained a recurring decimal leading to delay in clearance of manufacturing inputs and machinery as well as high demurrage, which increases the cost of production in the sector.

Most worrisome are the issues of deliberate delay in cargo clearing time, raising of technical barriers, rejection of relevant documents by officers of the agency that approved import documents, multiple agencies with duplicated functions and other rent seeking activities of vested interests at the port that excessively fleece operators,” the report noted.

An executive director of a Lagos-based manufacturing firm who pleaded anonymity told BusinessDay that although the pandemic intensified the production challenges faced by local manufacturers owing to the lockdown, supply cut and movement restriction caused by port operators simply made matters worse with their nonchalant attitude and extortion.

“Access roads to Apapa and Tin Can ports are becoming inaccessible due to congestions caused by trucks and heavy-duty vehicles. When you eventually get there, the process it requires for you is unnecessarily long and you have to spend so much money, especially when you have to pay the shipping company and terminal operators,” he said.

the Lagos Chamber of Commerce and Industry (LCCI) in its economic report revealed that 5,000 trucks seek access to Apapa and Tin Can ports in Lagos daily. However, the two ports could only accommodate 1,500 trucks, he said, adding that Nigeria loses N600 billion in customs revenue, $10 billion in non-oil export sector and N2.5 trillion in corporate earnings across various sectors on annual basis due to the poor state of Nigerian ports.