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5 major events that defined Nigeria’s port business in 2022

5 major events that defined Nigeria’s port business in 2022

Last year, has been described by pundits as one of the toughest years in Nigeria’s port industry where the port business was largely impacted by the foreign exchange crisis, high freight rates, the Russia-Ukraine crisis, rising global inflation, energy crisis, and other microeconomic factors that shaped business globally in 2022.

Amid these challenges, managers of the nation’s economy came up with some political decisions that set the tone for how to port business was handled last year and will be handled in the near future.

Here are some of the major events that defined the nation’s port business in 2022:

FG approves disbursement of Cabotage Fund: In December 2022, Mu’azu Jaji Sambo, the Minister of Transportation, announced that the Ministry has obtained Presidential approval to disburse the money in the Cabotage Vessel Financing Fund (CVFF) to qualified Nigerians to buy new vessels.

Sambo also announced the appointment of Union, Zenith, Polaris, UBA, and Jaiz Banks as the Primary Lending Institutions (PLIs) for the funds.

Bashir Jamoh, the director general of the Nigerian Maritime Administration and Safety Agency (NIMASA) said the funds available for disbursement are slightly over ₦16 billion and $350 million.

If the funds are finally disbursed this year, it will not only break the over 17-year-old jinx that has hindered the expansion of the maritime industry in Nigeria but will help to make cheap funds available for shipowners to buy new ships in order to fully participate in coastal trade.

Export processing terminals: In November 2022, the Nigerian Ports Authority (NPA), issued operating licenses to five export processing terminals to handle export containers bound for Apapa, and Tin-Can Island Ports in Lagos.

The five terminals include Diamondstar Port & Terminals Ltd in Ijora, Esslibra Terminal in Ikorodu, Sundial Global Trade & Service Ltd in Kirikiri, Bellington Cargo Ltd in Okokomaiko, and Tenzik Energy Ltd in Kirikiri Lighter Terminal 1.

The terminals were certified as pre-gates where export goods will be sorted, inspected, certified, sealed, and escorted by Customs to the port, thus eliminating the possibility of examining export containers at the port.

Re-introduction of scanners at ports: In November 2022, the Nigeria Customs Service (NCS) started using three newly installed scanning machines to examine containers at three Nigerian ports to reduce delays in container inspection at ports.

This major milestone was achieved over one year after Customs acquired the scanners.

According to Zainab Ahmed, the Minister of Finance, Budget and National Planning, who commissioned the scanners, putting the scanners to use will ensure efficient cargo clearance and will cut down delays for cargo owners, resulting in payment of demurrage and storage charges.

Completion of phase 1 of Lekki Port: On October 31, 2022, the China Harbour Engineering LFTZ Enterprise (CHELE), a subsidiary of China Harbour Engineering Company, and the Engineering, Procurement, and Construction (EPC) contractor for Lekki Port, announced the completion of the construction of phase one of the $1.5 billion Lekki Port, Nigeria’s first deep seaport.

The much-awaited deep seaport was completed and ready to start commercial operations after about 16 years the project was announced with fanfare in Lagos.

Biodun Dabiri, chairman of the Lekki Port Board of Directors, said the port will begin full commercial operations after the presidential commissioning which is expected to take place soon.

However, Laurence Smith, the chief operating officer of Lekki Port LFTZ Enterprise Limited (LPLEL), recently said that the target is to ensure that the port starts commercial operations on or before March 31, 2023.

VIN Valuation for imported cars: In February 2022, the Nigeria Customs Service (NCS) introduced the controversial Vehicle Identification Number (VIN) valuation policy for allocating standard values to all imported vehicles.

The policy generated a lot of uproars as freight forwarders shut down to protest the new policy, which according to them raised the value of imported cars by 300 percent without considering the depreciation values of old cars.

It also eased off the importation of old fairly used cars popularly known as ‘tokunbo’ by limiting the age of imported vehicles to nine years from 12 years stipulated by Customs.