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AfCTA: Shippers Union to address Africa’s rising shipping cost

In a bid to drive Nigeria’s economic growth through the African Continental Free Trade Area (AFCFTA), the Union of African Shippers’ Councils, UAFC has collaborated with the Nigeria shippers council to address high cargo fares imposed by the foreign shipping lines on African shippers.

Speaking at the UAFC Committee of experts meeting held in Abuja on Tuesday, Emmanuel Jime, executive secretary of the Nigerian Shippers Council, noted that Africa cannot continue to remain at the mercy of the foreign shipping lines to determine the fate of their trade and transport through the imposition of unreasonable charges and surcharges on their economies.

“There is a need to scrutinize every detail involved in determining the cost of services rendered at our ports, make scientific comparisons with other ports of the world and arrive at acceptable rates for mutually beneficial transactions,” he said.

“It is time for us to rise to the occasion by leveraging relevant technologies to increase efficiency, advise our various governments on required policies and regulations to boost our trade and transport sector and discourage the continuous implementation of processes that contribute to delays and high cost of doing business at our ports.” He noted

Citing the United Nations Conference on Trade and Development (UNCTAD) 2020 report, which shows the total trade for Africa was about $386 Billion and the West and Central Africa accounted for more than 36percent of this figure, he stressed the need for the sub-region to address areas of inefficiencies.

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“The UASC has a big role to play in promoting the implementation of AfCFTA to the benefit of her member countries. As we are all aware, there is a huge imbalance in trade between Africa and the rest of the world.

Jime stressed the need for African governments to correct the anomaly through aggressive sensitization, integration of relevant processes and infrastructure to make the trade within the sub-region easier.

In his remarks, Rotimi Ameachi, the minister of transportation, said the meeting will inaugurate the committee of experts on the cost expected to beam their searchlight on the incidence of unfair shipping surcharges and high local shipping charges on the National economies of West and Central Africa.

“The Federal Government of Nigeria is aware of the unreasonably high cost of transportation of goods to and from the sub-regional ports due to high freight rates, poor infrastructure and arbitrary surcharges such as war risk surcharges, port recovery surcharge, port congestion surcharge, peak season surcharge, Bunker Adjustment Factor (BAF), Currency Adjustment Factor (CAF), extra insurance risk surcharge et al,” Ameachi said.

“I am equally aware that the member councils of the Union are concerned about the lack of consultation, timing and cost structure of these surcharges.”

He said that the surcharges are mostly unilateral and at times new nomenclature introduced by the multinational shipping companies/lines without consultation with the sub-regional authorities or the shippers.

According to him, the process of the introduction of these surcharges lacks transparency and may not be based on verifiable and available statistics.

“These surcharges amount to huge sums of capital flight from the sub-regional economies and thereby depleting the limited foreign reserve,” he explained.

The minister said it was in recognition of the above unfair trade practices that the Nigerian Shippers’ Council, the Union of African Shipper’ Council in collaboration with the United Nations Conference on Trade and Development and Global Shippers Forum (GSF) resolved to constitute a sub-regional committee of experts on the cost that will critically analyze the cost structures and units of the various charges and surcharges, establish the parameters shipping lines used in determining their charges and surcharges.

He said the committee is expected to recommend measures to guard against future imposition of arbitrary surcharges and unilateral introduction of new nomenclature by the multi-national shipping lines for mutually beneficial transactions.

“It is time for us to rise to the occasion by leveraging relevant technologies to increase efficiency, advise our various governments on required policies and regulations to boost our trade and transport sector and discourage the continuous implementation of processes that contribute to delays and high cost of doing business at our ports.”

Citing the United Nations Conference on Trade and Development (UNCTAD) 2020 report, which shows the total trade for Africa was about $386 Billion and the West and Central Africa accounted for more than 36percent of this figure, he stressed the need for the sub-region to critically address areas of inefficiencies.

“The UASC has a big role to play in promoting the implementation of AfCFTA to the benefit of her member countries. As we are all aware, there is a huge imbalance in trade between Africa and the rest of the world. We need to correct this anomaly through aggressive sensitization and putting in place relevant processes and infrastructure to make the trade within the sub-region easier and by extension to the entire continent,” he concluded.

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