Nigeria@61: High cost, disabling business environment at ports worry shippers
Sixty-one years into independence, port users still suffer high costs and a disabling business environment at Nigerian seaports, shippers have said.
Shippers, who took turns to evaluate business activities at the nation’s seaports in the past 61 years, said that despite the effort by the Federal Government to introduce the Executive Order on Ease of Doing Business at Ports, businesses still suffer significant delays as the order only exists in paper rather than being implemented.
According to them, the high cost of doing business is not only killing factories but also forcing manufactures and other businesses to either close shop or relocate to other African countries.
“The Federal Government tried to bring some resemblance of control by reducing the number of agencies operating in the port, but to no avail. The cost of doing business is out of control and ease of doing business is non-existent but on paper,” says Jonathan Nicol, president of Shippers Association of Lagos State.
Nicol notes that the cost of road haulage including the harrowing cost of clearing goods from ports across Nigeria has become ‘uncontrollable’, and it threatens the existence of industries.
“Shipping lines and terminal operators that are supposed to be the primary partners of importers and exporters are now at a distance with their customers. Today, it is like a war conducting business in Nigerian Ports. The Export seat at Onne Port is always closed to the public on Saturdays and Sundays, creating a huge problem for exporters,” Nicol says in a phone interview.
While blaming poor port infrastructure as well as lack of spread in port facilities for some of the challenges shippers are presently experiencing in Nigerian Ports, he says that Warri Port is still on recess handling a few vessels for Julius Berger and some fishing vessels.
He further discloses that many investors are leaving Nigeria because industries are finding it difficult to survive the harsh economic stress in managing the cost of production and weak Naira, Nigeria’s currency.
According to him, about 136 textile industries have shut down in Nigeria such that the country has lost over N20 trillion of viable investments as a result of the closure of businesses across the country.
“More manufacturers are declaring bankruptcy and this will put our banks in a bad situation. Loans will not be recovered. Some banks might fail if care is not taken,” he predicts.
Warredi Enisuoh, a master mariner, said Nigerian ports are losing businesses to neighbouring ports of Lome in Togo and Cotonou in the Benin Republic due to lack of adequate infrastructure to handle bigger vessels with the economy of scale.
“Lots of Nigerian cargoes are being dropped in those countries as a result of their efficiency, depth of water, marine services, and seamless single processes of their stakeholders. Lome Port handles bigger ships and more containers in cheaper ways than all the ports combined in Nigeria,” says Enisuoh during a virtual conversation.
He suggests that Nigeria takes a survey of international best practices within the West African region in order to see things that can be scaled down or up to ensure ease of business at ports.
Emma Nwabunwanne, a Lagos-based importer, who blames corruption for the problem at the port, says that interference in cargo clearance by multiple government agencies has been a major factor that causes the high cost of doing business.
He notes that interference by multiple units of Customs, Maritime Police, and other agencies like Standards Organisation of Nigeria (SON) causes a delay in cargo clearing, which at the end leads to payment of demurrage and storage by the shipper.
Nicol says the Nigeria Customs Service is neck-deep in revenue generation rather than trade facilitation, and that Customs Service is fast becoming a full-blown military force, with sophisticated weapons to intimidate the civilian traders.
He suggests that government needs to invite maritime technocrats to assist the Minister of Transportation and other Maritime Agencies to handle highly technical issues in the sector.