Maritime sector, most problematic in 2017 – Analysts

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… Apapa, fourth worst port in the world

By Oluyinka Onigbinde

The maritime sector has been described as the most problematic sector among all sectors in 2017.

In a chat with the Director of Research and Advocacy Lagos Chamber of Commerce and Industry (LCCI) Dr. Vincent Nwani, he described the maritime sector as the most problematic sector in 2017.

He said the maritime sector was bedeviled with several hiccups that hinder the growth of the sector in the year under review.

According to him “the maritime sector in the outgoing year did not live up to expectations at all, it is one of the most problematic sectors, and it is one of the sectors whose problem is holding Nigeria back.

“Remember that during the year so many policies and executive orders relating to the maritime sector were issued by the acting president then Prof.  Yemi Osinbajo  and if I can remember one of the executive orders was that the Nigerian port  must operate 24 hours and that never happened as we speak.

“Also one executive order was that the Nigerian Customs Service (NCS) should stop harassing trucks owners once they leave the ports but up till date the Customs is yet to abide by this order.

“More so during the year the world banking index on doing business came out, where Nigeria made progress from 169 to 145 we made progress by 25 points and when you look at some of the indicators such as getting credit, resolving trade dispute, starting a business and so on.

“ but in the one that relates to ports and that is ease of trading across border, in that metrics we are 181 of 185 countries, so we are at fourth bottom of the table,

“And this shows that Nigeria is the worst fourth port in the world and this is very bad. Also in the year under review you will agree with me that it takes Nigeria trucks owners 14 to 21 days to get to the port and this is quite worrisome.

“And this has made exporting agriculture products difficult, so the port remains fragmented, disjointed and too costly. There was also an executive order that agencies operating at the port should be reduced to three but presently we have over 14 agencies at the port,” he said.

During the year under review, seaport operations in Nigeria was badly hit by some ill-conceived trade policies including the increase in importation of illegal arms ammunition over 2000 illegal arms was intercepted by the NCS, signals that signposted that Nigeria was still on a journey to curb illegal importations of goods.

Experts blame FG on cargo volume drop

Experts blamed the drop in cargo volume and huge loss of revenue by port and terminal operators on the anti-trade policies of the federal government. These policies have also made the country unattractive to investors.

Investigations also show that break bulk terminals at the ports are struggling to pay their bills and meet their financial obligations to the NPA due to the plethora of banned products and the hike on import duties on others.

On his part, Director, Research and Advocacy, Lagos Chamber of Commerce and Industry (LCCI), Vincent Nwani, said: “There must be an urgent review of the ease of doing business so as to attract more investors for the upcoming year.

Tunji Owoeye a maritime expert said the lack of scanners at the Nigerian port is worrisome and a shame to the country, he urged the Federal Government to see to the provision of scanners at the port in the year 2018The development, they added, has also led to drastic reduction in the volume of cargoes handled at Nigerian ports, with affected port terminals losing about 60 per cent of their cargoes to the CBN restriction policy.

Ending smuggling

During the year under review, the NCS made some effort to tackle smuggling with their effort leading to loss of lives. The Comptroller General of the NCS, Col Hamid Ali (retd.) had in a chat with newsmen lamented how the Service lost some of its officers in various battles with smugglers along Nigeria’s border with Benin Republic.

The service was able to intercept 2100 illegal arms in the year, with several banned items like rice, cannabis, vehicles through land borders among other things.

The Customs boss however solicited the support of its stakeholders to partner Nigeria in the fight against smuggling.

According to him, the biggest problem confronting Nigerian Customs service till date is the lack of compliance on the part of traders, who make dishonest declarations.

Ali emphasised the fact that borders are imaginary as far as ECOWAS is concerned, stressing that the Benin Republic Customs administration must work hard to ensure that trade between both countries are without unnecessary hindrances.

FG’s agencies

During the year the economic down turn also affected federal government agencies in the maritime sector as they struggled for funds to address their core functions.

This was as a result of terminal operators and shipping companies’ failure to meet their dollar obligations to the agencies as a result of the foreign exchange crisis.

The federal government agencies affected include: NIMASA, the NPA and the Nigerian Shippers Council (NSC).

NPA: During the year the Nigerian Ports Authority and Integrated Logistics Services Nigeria Limited (Intels), Nigeria’s leading logistic firm for the oil and gas industry, were locked in a fierce business dispute, with the NPA threatening to terminate Intels’ port revenue collection contract.

Those familiar with the matter said the dispute, which has seen the two parties hold several tension-soaked meetings and exchange aggressive correspondences, arose from Intels’ alleged non-compliance with the Federal Government’s Treasury Single Account policy.

The two parties also appear to disagree over the funding of a key capital project the logistics company is handling for the NPA.

On March 15, the Managing Director of the NPA, Hadiza Bala-Usman, wrote to Intels asking it to comply with government’s TSA policy, which demands that service boat revenues collected through commercial banks must immediately be swept into the relevant account in the Central Bank of Nigeria.

Ms. Bala-Usman had proposed a new arrangement for sharing the revenue stream. The company will receive 28 percent as agency commission from boats service revenues, while the remainder will be shared on a 30:70 percent ratio in favour of government and the company respectively.

The TSA was introduced by government to enthrone centralized and transparent management of all government revenues and plug leakages. Some analysts have criticised the policy saying the nation’s financial sector is under severe stress as the TSA policy starves commercial banks of cash.

But in its March 27 response, Intels, though, accepted the new sharing arrangement, it, however, said it was unable to comply with the TSA policy because it had loan commitments with some commercial banks.

“We still have an issue with the making of payments to a financial institution with complete sweep of funds to the TSA account,” the company said.

The company said it used its books as collateral for the loans and that compliance is only possible if creditor banks continued to collect and hold revenue on its behalf.

According to reports the agency was able to generate N1.2 trillion throughout the year

NIMASA:

In the cause of the year the Nigeria Maritime Administration and Safety Agency (NIMASA) loss for the third time at International Maritime Organization (IMO) the agency lost its bid to get re-elected into category ‘C’ of the International Maritime Organisation (IMO) for the third consecutive time.

Recall that the last time Nigeria won its IMO Council bid was in 2007, under Ade Dosunmu, the then director-general of NIMASA, and every attempt made since 2011 to return to the council had failed.

It was about 40 countries elected into the IMO Council in three categories for the 2017/2018 biennials.

The successful countries were listed as China, Greece, Italy, Japan, Norway, Panama, Republic of Korea, Russian Federation, United Kingdom and United States in Category A.

Australia, Brazil, Canada, France, Germany, India, Netherlands, Spain, Sweden and United Arab Emirates were elected in Category B while Bahamas, Belgium, Chile, Cyprus, Denmark, Egypt, Indonesia, Jamaica, Kenya, Liberia, Malaysia, Malta, Mexico, Morocco, Peru, Philippines, Singapore, South Africa, Thailand and Turkey were elected in Category C.

Maritime stakeholders have expressed shock at the inability of Nigeria to get re-elected into the policy making body of the IMO, citing policy somersaults, shoddy preparation and inexperience by the federal government as represented by FMOT, NIMASA.

Donald Adebola, a London-based Nigerian maritime analyst, who spoke shortly after the election, attributed Nigeria’s loss to “inexperience and shoddy preparation” by the handlers of the country’s bid.

He said, “It is clear that both Rotimi Amaechi, minister of transportation, and Dakuku Peterside, director-general of NIMASA, are not knowledgeable about the workings of IMO, and while that is not wrong in itself, their inability to mobilise knowledgeable people on board to drive the process is confounding.”

Nigeria sent a 36-man delegation to the Council meeting in London and by estimation, the estacode spent on 36 members of the IMO team, which includes air tickets, accommodation, feeding and entertainment, costs the taxpayers more than N200 million for what evidently has been a jamboree.

At an average of $600 daily as estacode for the 36-man delegation, which spent five days at the IMO Council meeting and an average £500 for a return ticket for each of the delegates, one can only imagine the cost of this ego trip on the Nigerian taxpayer.

NSC: The Nigerian Shippers Council on its own part lived up to expectations as the council made giant strides my launching the Truck Transit Park (TTP)  the Nigerian Shippers Council (NSC), and the Federal Road Safety Corps of Nigeria (FRSC)  signed a memorandum of understanding (MoU) on trucks management and regulation.

The TTP is an initiative of the NSC to help ease the congestions on the roads. Under the initiative, private sector investors and the state governments are critical partners. The NSC is also partnering with other relevant stakeholders like the FRSC.

Speaking on the MoU signing ceremony the Executive Secretary, Nigerian Shippers Council, Mr. Hassan Bello said “90 percent of the goods come into Nigeria are distributed by road, so it is important we have not only the good road as an infrastructure but we should have supporting facilities like the truck transit part to ensure smooth delivery” adding that it also benefits the economy of the country.

“We don’t want to have obstructions; we should always have free flow of goods delivered to the people at the time they want and at less cost. That is why it is important that we collaborate with the FRSC” he noted.

Mr. Bello also said the MoU will also provide regulation that will standardize the vehicles themselves. “If you look at the fleet, they are rickety and old. We need to start reflecting of these trucks” he emphasized.

“Secondly is the Truck Transit Parks which will decongest the highway. We are building a modern infrastructure and we need to have the assistance, collaboration and technical input  from FRSC. The third one relates to the economy because if you have an infrastructure, you need to have data and we will be tapping into the platform of FRSC to get data from our plan and strategy in this direction” he explained further.

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