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FG to lose N200bn as dwindling cargoes, policy threatens revenue at seaport

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By Oluyinka Onigbinde

If feelers emerging from Nigerian NewsDirect are anything to go by the Federal Government is set to lose over N200 billion  across the country’s  sea ports due to dwindling nature of cargoes

The dwindling cargoes are attributed to various government’s policies on importation, high exchange rate and the comatose port access roads that have affected operations at the nation’s ports.

Activities are at their lowest ebb  as cargo throughputs has fallen below the Guaranteed Minimum Tonnage (GMT).

With government revenue at the seaports  dwindling  from 84.9 million tonnes in 2014 to 77.3 million tonnes in 2015 and down to  53.2 million tonnes in 2016, experts believe 2017 may be worse.

Also data from the National Bureau of Statistics (NBS), shows that the total number of cargoes in and out of all the ports dropped from 84,900,588 in 2014 to 78,322,558 and 70,681,028 in 2015 and 2016 respectively.

Also, this was evident as vessels call at Western ports – Apapa and Tin-Can Island dropped from 3,195 in 2014 to 3,173 and 2,511 in 2015 and 2016 respectively.

Equally, Customs revenue has also dropped  from N977.09 billion and N904billion in 2014 and 2015 to 898billion in 2016.

With this statistics,  it is imminent that the Federal Government’s revenue at the seaports will dip further as most of the factors that contributed to the reduction since 2015 are yet to be addressed.

For instance, the restriction of 41 items from accessing the Foreign Exchange market by the Central Bank of Nigeria (CBN) has affected importation into Nigeria as importers, manufacturers and shippers find it difficult to get foreign exchange for importation.

Though, the President of Manufacturers Association of Nigeria (MAN), Dr. Frank Udemba Jacobs, had  informed  that some items restricted from the Forex Market were raw materials used by his members.

His words, “The association has done an analysis of the banned items and we broke the 41 items into 110 and of the 110, 75 are raw materials for our members. It is these 75 items we ask the Federal Government to remove from the list so that our members can source forex.”

Also, the seemingly expensive nature of Nigerian Ports have fueled diversion of cargoes to neighbouring ports of Benin Republic, Togo and Ghana.

Government however lost a whopping revenue in charges, Customs revenue sea protection levy that would have been paid to Nigerian Maritime Administration and Safety Agency (NIMASA) and compulsory pilotage levy in foreign currency that would have accrued to Nigerian Ports Authority (NPA)

Recounting the unfriendly nature of Nigerian Ports, the Executive Secretary, Nigerian Shippers’ Council (NSC), Barr Hassan Bello said performance indicators rates Nigerian ports as the most expensive in the sub-region.

Giving the analysis, Bello said cargo dwell time of vessels at Nigerian ports is 14 days while ports of neighbouring countries have a lesser dwell time.

He also pointed out that demurrage free period in Nigeria is very low among its contemporaries in Africa.

“It takes three days to clear cargo from Lome, seven days in Cotonou, four days in Durban in South Africa and five days to clear cargo out of Kenyan ports.

“The free days given to importers before accumulating demurrage in Nigeria are five days while it is 10 days in Benin Republic. It takes 10 days in Cameroon and China to enjoy free period before the accumulation of demurrage starts to count.’’

Bello said that what importers needed from the port were the availability of service and common users’ information, safety of cargo and right pricing.

However, current indices show that government revenue will further dip in 2017.

For instance, major commands like the Apapa and Tin Can Island and PTML commands are given a monthly target of N32billion, N29billion and N6.9billion respectively as their monthly revenue target

The Apapa Area Command of Nigerian Customs collected the sum of N77.4 billion as revenue in the first quarter of 2017 as against its quarterly target of N96billion. This amount represents a shortfall of N19.1 billion.

A breakdown of the revenue generated by the command within the first quarter of 2017 showed that in January, N25.9billion was collected; in February, N24.7billion and March N26.7billion.

In a chat with Nigerian NewsDirect  Dr Vincent Nwani Director Research and Advocacy Lagos Chambers of Commerce and industry (LCCI)  blamed the paltry drop to wrong ways of doing things in the country.

According to him “The main objective of government should not be to raise revenue, but rather to facilitate trade because if it is about raising revenue then we can’t get it right without doing the right thing first which is enhancing the ease of doing business at the port.

“ And the only way to achieve this is to enhance trade facilitation, you don’t venture into a business or trade with the mindset of making profit alone, but rather to satisfy human needs.

“ And until we get it right then revenue is bound to drop and that it’s why we are losing revenue to neighbouring port.

“Let’s provide the right facilities and the right policies that would enhance trade and income will come at ease” he said.

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