In 2019, the nation’s port industry witnessed ups and downs in the volume of business activities that took place. Earlier that year, business activities started slowly predominantly due to pre and post election activities but, it ended up with lots of volumes in the second half of the year.
In this interview with AMAKA ANAGOR-EWUZIE, Tony Anakebe, managing director of Gold-Link Investment Ltd, a Lagos-based clearing and forwarding firm, shared his thoughts on port activities in 2019. He also listed among others, the major challenges that faced businesses in 2019.
Review of port business in 2019
The first quarter of 2019 witnessed a slow start in port business. This was apparently due to obvious factors such as the preparation for the 2019 general elections, late passage of 2019 budgets as well as lack of political will on the part of government to turn the nation’s economy around.
Despite the slow start, things started looking up in the second half of the year. Precisely, at the beginning of the third quarter, there was an increase in the volume of business activities that took place at the nation’s ports.
This was largely due to the border closure as well as regular activities in the financial sector. This helped to move the maritime sector forward. With the closure of the land borders to trade, the goods going to ports in neigbouring countries before and subsequently smuggled into the country started coming through the seaports. This also increased the revenue generated by the Nigeria Customs Service (NCS) as the service reached over N1 trillion in the first nine months of 2019.
The problem which the nation’s port industry is having now and if not properly handled would escalate in 2020, was in managing the success of the border closure because several ships now anchor on Nigerian waters without berthing due to lack of space. Several terminals were filled to the brim as at the last few days of 2019, and demurrages were being paid by importers.
Alarmingly, the port witnessed congestion, and this was aside from trucks that queue for days on the roads to the ports in Lagos just to have access into the port to lift laden containers.
Given the situation of the roads, the cost of haulage escalated such that it was unbelievable that during the festive rush, 20-foot container was loaded with N1.2 million from Tin-Can Island Port to Ajao-Estate in Lagos while 40-foot container cost as much as N1.4 million.
Now, the question was how much is the freight charge from different parts of the world to Nigeria? This was due to the traffic congestion on the Apapa-Oshodi Expressway.
The management of traffic on the port roads has been zero to nothing especially from the last days of 2019 till date such that the road became the den of corruption. The problem became very bad because the security agencies that were feeding fat from it refused to allow the problem to abate.
The Federal Government would have to come in to handle the problem in Apapa in order to reduce the cost doing of business in the port in 2020. This was because the road situation has been pushing the cost of doing business in Nigerian ports very high. For instance, it took my company more than one week to be able to load a 40-foot container during the festive season.
Activities that stimulated growth in 2019
The policy of the Central Bank of Nigeria (CBN) which mandated banks to lend to businesses helped to open up the economy in the year under review.
It was also sad that the initiative of the Nigerian Ports Authority (NPA) to reduce demurrage and storage free days for importers, which also helped to boost the port business was discontinued.
We discovered that as volume grew in 2019, the service providers could no longer manage the policy. During that time, the demurrage and storage charges payable by importers were reduced but now, the service providers have reverted to the status quo.
Port congestion
For port business to move seamlessly in 2020, the Federal Government should begin to inquire on why importers abandon their goods at the ports. In doing so, it would be discovered that some government policies do not encourage businesses at the port. The truth was that no importer would spend about N10 to N15 million to import a container only to abandon it at the ports.
In this case, shipping companies and government agencies had to forgo some charges to allow such goods to be moved out of the ports. For instance, when a container stays up to one month in the port, it gets a demurrage of almost N1 million.
Call-up system
The call-up system was technically aborted due to the issue of corruption in the port. And as far as the security men that manage traffic on the port roads continue to extort the truckers, it would be difficult to solve the gridlock problem in Apapa.
Truckers spend as much as N120,000 to N200,000 per trip to get to the port from Mile 2. During the rush period, several importers got their fingers burnt such that the transportation fare soared ridiculously as people paid as high as N1 million to load a 20-foot container because it was extremely difficult for trucks to have access into the ports. It took some almost two weeks to load and one week to come out of the port.
Festive season
There was an upbeat in the volume of importation during the festive season. There was also an increase in the units of cars imported into the country as vehicles that hitherto go to Cotonou port, now comes direct to Nigerian ports.
The volume of general goods imported within this period also increased and these contributed to the significant improvement recorded in the port sector within the last quarter of 2019.
Problems with SON Website
The actual thing was that the Standards Organisation of Nigeria (SON) upgraded and changed its web portal. The new portal became very difficult for Customs Licensed Agents and their importers to access. And it ended up posing serious difficulties on agents and also contributed in slowing down clearing jobs that were SON regulated.
Early passage of 2020 budget
It was only when the national budget is passed that individuals, companies and businesses would be able to set their own budgets. If the implementation of the budget begins as the President has assured, things would definitely take shape early enough in 2020.
