Tony Anakebe is the managing director of Gold-Link Investment Ltd, a Lagos-based clearing and forwarding company. He told Amaka Anagor-Ewuzie in this interview that there will be more port-related job losses due to the continued decline in the volume of business coming into the country through the port.
He said that issues such as naira devaluation, high exchange rate, scarcity of FX, and high import tariff that affected port business negatively in 2022, will not go away anytime soon leading to the continuing decline in volume. Excerpt.
Port industry in 2022
Naira devaluation affected almost every aspect of business in Nigeria and resulted in a rise in inflation to over 21 percent. After recovering from the two years of the Covid-19 pandemic that led to the cost of living crisis, the managers of Nigeria’s economy were unable to manage the impact on the nation’s economy.
The shipping companies are beginning to feel the impact as volume and freight continue to drop, terminal operators are no longer receiving sufficient volume and bonded warehouses are left without containers to handle.
Cargo throughput in Twenty-foot Equivalent Units (TEUs) reduced drastically in the cause of the year and the number of ships coming to Nigerian ports also declined.
The high exchange rate made a lot of importers lose their monies based on the high exchange rate from a little above N400/$ at the beginning of the year to over N800/$ before it dropped to above N700/$. This drastically reduced the purchasing power of importers.
VIN valuation
With the introduction of VIN valuation, the duties paid on imported used and new cars hit the rooftop, affecting many car importers. Many that could not survive the impact left the business while some still have their imported cars trapped in the port while those that are still in the business reduced the volume of cars they bring into the country.
Read also: Container imports into Nigerian ports grows 13.10% in 5 years
Presently, duties payable on imported cars come directly from Customs headquarters in Abuja meaning that VIN-valuation transferred the power to evaluate imported vehicles automatically from the commands to a central point in Abuja, which is good.
However, the duties given to importer of cars increased to the point that buying cheap tokunbo cars are beginning to erode Nigerians.
Tariff on containers
In terms of Customs tariff, Customs has pegged duties payable on 40-foot containers to be from N5 million and above while 20-foot containers now pay from N3 million and above depending on the time of goods. Customs ensure that importers pay up to that tariff before their goods could be authorised to go out.
Projection into 2023
Nigerians should brace up for more hardship in 2023 because businesses in the port industry are not finding it easy. More Customs Licensed Agents will be out of jobs this year because the volume of business would continue to reduce. Importers will also need to be careful of fraudulent agents that defraud importers of their money and many will be involved in ‘flying containers’ from the port.
Recently, Customs discovered how agents fly containers from Tin-Can and importers are becoming their victims. Such agents defraud importers of their hard-earned money by exciting them with low fees and unimaginable duties.
It is only if Nigeria can improve in the terms of generating foreign exchange that the port business can improve. The exchange rate cannot improve anytime soon. I even see the exchange rate hitting N1000/$ before the February general elections and when it drops, it will come down to around N800/$ or N850/$.
Port development
We wonder why Nigeria will have more than three viable seaports clustered in the Lagos metropolis while other ports in the eastern part of the country continue to struggle. This is why we have congestion in Lagos. The government needs to decentralise the port business in Nigeria by building ports in the hinterland and putting the existing ports into maximum use.
The Lekki Port has been completed, and sooner the Lekki Port area will be congested like the Apapa.
Checkpoints on port roads
Mounting checkpoints on roads leading to the ports for the purpose of rent-seeking by security operatives on tankers and truck drivers are not good for the image of the country. Therefore, the government needs to put an end to such in 2023.
