Doing business obstacles: Ships stuck at sea over clearance process

Ships bringing imports through Nigerian seaports still wait for at least 21 days on the anchorage before accessing the ports to berth despite the Federal Government’s Executive Order on ease of doing business at ports.

This development, ship owners attribute to cumbersome clearance processes, port congestion and bureaucratic bottleneck experienced by shipping companies while dealing with government agencies.

By waiting for three weeks to berth and discharge cargo, cargo owners accumulate losses that not only make it difficult for them to meet their business obligations, but also mandate them to pay demurrages. These delays affect the market price of commodities and add to inflation because cargo owners must factor in the loss in demurrage before fixing prices.

It also makes it difficult for businesses to plan because people ship their cargoes to Nigeria without knowing when it will come into the country.

Confirming this, Adaora Nwonu, assistant director, Special Duties of the Nigerian Shippers’ Council (NSC), says vessels calling Nigerian ports still spend up to 21 days in waiting time at the anchorage before having access into the ports.

According to Nwonu, this is very poor compared with neighbouring Tema Port in Ghana where vessels spend 24 hours to access and it can be attributed to the delay caused by poor level of automation in port business.

She says agencies such as Nigerian Ports Authority (NPA), Nigerian Maritime Administration and Safety Agency (NIMASA), and Nigeria Customs Service (NCS) still mandate shipping companies to submit hard copies of shipping manifest, which ordinarily should have been transmitted online.

“Government agencies must comply with the Executive Order on ease of doing business. They should not be the one flouting it. These agencies are the major problem because they find it difficult to work with one another,” she states while speaking at a recent online conversation in Lagos.

On his part, Aminu Umar, a ship owner, categorises the factors creating delays at ports into three – vessel documentation and clearance delay, navigational and operational delay, and port congestion.

According to Umar, documentation is done electronically in other countries in a seamless process using a portal that interlinks all government agencies involved in vessel clearance.

In Nigeria, he notes, ship owners go to the NIMASA separately, NPA differently, NCS and Nigeria Immigration Service (NIS) differently and physically to carry out documentation.

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“In other countries, it is one trade portal that interlinks all the agencies and immediately the clearing document is uploaded, each of the agencies will take theirs and revert to the ship owner with their charges. The ship owner, on the other hand, can also make payment electronically and upload the invoice on the portal for the agency to revert by giving the ship the time and date for checks. This makes it easier for ship owners to process their documents with less human interaction,” Umar explains in a phone interview with BusinessDay.

Umar further says that vessel operations and navigation in Nigerian ports are highly inefficient with bottlenecks compared with other West African countries including Ghana, Benin Republic and Senegal that are more efficient.

“There are equipment that is supposed to enable the vessel to navigate safely to berths that are lacking in Nigerian ports. This creates inefficiency that causes delay as well as backlogs such that vessels could wait for two to three months on the anchorage before having access into the port,” he says.

On port congestion, Umar notes that many dry cargoes are unable to leave the ports to importers’ warehouses as at when due, while exports are unable to get into the port because roads are choked up and port terminals are filled.

On trade portal, Nwonu says that Nigeria presently does not have a trade portal, and accuses government agencies of frustrating efforts made by the United Nations Conference on Trade and Development (UNCTAD) to develop an international trade portal for Nigeria.

To her, government agencies are usually protecting their individual territories and refusing to share documents.

She adds that vessels calling Nigerian ports are expected to transmit their ship manifest within five to seven days before arrival of the vessel to improve the clearance process, but in other climes, it only takes 48 hours to transit ship manifest electronically to government agencies.

To reduce delay, Umar adds that there is a need for more investment in acquisition of navigational equipment to enhance operational efficiency, and for government agencies to automate their processes in order to reduce human interface.