By Steve Agbota, [email protected]
There is no gainsaying it that year 2023 was tough for Nigeria’s maritime sector judging by the mixed reactions expressed by stakeholders during Daily Sun interactions with them.
In spite of some developments and changes in the industry such as commencement of operations in $1.5 billion Lekki Deep Seaport, creation of Marine and Blue Economy, appointment of a career officer as the Comptroller General of Customs to spearhead the affairs of the Customs and removal of 48 items from forex restriction, the industry still had huge challenges.
The high points of these trends include the surging exchange rate, dollar scarcity, unstable exchange rate, incessant increase in Customs duty, decline in importation, obsolete infrastructure, multiple taxation, which combined with other exogenous factors to hinder the growth of the maritime industry in 2023.
Other exogenous factors that constrained the sector include absence of rail connectivity (intermodal transportation), lack of enforcement of maritime related policies posed a huge setback for the nation’s maritime sector, in addition to myriads of other factors ranging from poor seaport access roads, lack of holding bays and quay, inadequate truck parks and ineffective traffic management around the ports, especially within the country’s two busiest ports in Lagos.
Aside policy inconsistency, shoddy implementation and instability are among other factors also impeded the actualisation of the huge potential of Nigeria’s maritime sector in 2023.
Conversely, this has made stakeholders to describe the year 2023 as the tough one for the maritime sector.
Daily Sun also learnt that the inability of the Federal Government to disburse the $700million Cabotage Vessel Financing Fund (CVFF) to indigenous ship owners created its own setback for shipping industry in the country.
Today, Nigeria still depends on international shipping lines to lift its crude oil, which cost the nation as high as over $10 billion yearly. This was as a result of dearth of indigenous shipping lines.
The CVFF was established alongside the Nigerian Coastal and Inland Shipping (Cabotage) Act of 2003, to empower indigenous ship-owners to take control of the nation’s coastal and inland shipping business, otherwise known as the cabotage trade.
Towards the tail end of the administration of Muhamadu Buhari presidency, five Primary Lending Institutions (PLI’s), Zenith, Polaris, United Bank of Africa (UBA) Jaiz and Union Bank were all appointed to handle modalities for the disbursement of the CVFF to indigenous shipowners.
Briefing journalists after a meeting at NIMASA headquarters in January, Dr Bashir Jamoh, stated that the modalities for the disbursement to be released by the five banks include the interest rate, tenure, collateral and requirements needed to access the fund.
However, with the end of President Buhari’s tenure and the emergence of President Bola Tinubu as Presidentseems to have slowed down the disbursement of the CVFF, as the fund has remained sterilised all through 2023 with the country incuring losses due to a lack of capacity on the part of the indigenous ship-owners.
All through 2023, the issue of collapsing quays and berths at many Nigerian ports made the headlines with the Managing Director of the Nigerian Ports Authority (NPA), Mr. Mohammed Bello Koko, saying that the rehabilitation of Apapa and Tin-Can Island Ports in Lagos, including Onne port in Rivers State and Calabar port in Cross River State will gulp $800 million.
“Palliative and remedial works are no more effective. These ports need total rehabilitation. The rehabilitation would help in achieving the digitalisation of all the four ports in Nigeria. The rehabilitation of Apapa, Tin Can Island Port in Lagos, Onne and Calabar ports in the Eastern port will cost $800million. The money will either come in as a loan or NPA will fund the rehabilitation, which will reduce its contribution to the CRF,” the NPA MD had told newsmen in February 2023.
With the creation of a Ministry of Marine and Blue Economy by President Tinubu, expectations are high that the approval for the rehabilitation of Nigeria’s major ports will soon commence in the new year.
Speaking with Daily Sun, the former President of the Association of Nigerian Licensed Customs Agents (ANLCA), Dr. Kayode Farinto, said that year 2023 in the maritime sector was clouded in mystery.
“After the election, there were a ray of hope. Events that happened towards the last quarter of the year, confirmed it to us that next year will be better than this through the removal of 48 items from forex restriction, setting up a better condition for clearance of cargo, having a proper and refined a Customs officer as Comptroller General of Customs (CG). You also remember that it went round preaching compliance that there would be more emphasis now on trade facilitation,” he said.
Meanwhile, a former member of Presidential Taskforce on the Reform of Nigeria Customs Service; Presidential Committee on Destination Inspection, and Ministerial Committee on Fiscal Policy and Import Clearance Procedure, Lucky Amiwero, said year 2023 has been very difficult for the maritime sector due to the removal of subsidy, which escalated prices of goods to almost close to 500 per cent and the floating exchange rate that affected import.
“If you look at the inflow, you will find out that it has been dwindled tremendously. People have lost jobs, many people did not celebrate Christmas. Christmas is not in people’s table, they are just talking survival. People are going through pains and they are closing shop.
“People don’t have access to their shops. Blue economy is not something that will come in the next four to five years. We have other laws that can midwife the blue economy. If those laws are not implemented, it cannot work. Section 16 and 16 of NIMASA Act, which is for indigenous operators to be able to enhance the potential in the blue economy,” he said.
He said the blue economy is just on the paper and there is need to find a way to exploit its potential and use it for the benefit of the nation.
“The economy is going down. We are talking about blue economy, it has been on the paper for a very long time, NIMASA introduced it. Has NIMASAbeen able to manifest what they have in their law? Section 16 and 17 of NIMASA law has provision for maritime fund, which is for indigenous operators. Have they released that fund? We have cabotage financing fund for indigenous operators, have they released it? This has been there since 2007.
“When you don’t have indigenous operators, what are you talking about blue economy? Cabotage act they have been talking about since 2007 is not effective. It is not about talking on paper, it is what you’re going to do. You need experts. The man who has been there just came in as the former Governor and he’s coming with his political aides who will be telling him what to do. Those people are not experts in the maritime sector. So they cannot give him expert advice,” he said.
An importer, Edward Bassy, said year 2023 was so tough for the importers, adding that the unstable exchange rate, scarcity of dollars forced many importers out of business, which is the reason there is a sharp drop of importation into the nation’s ports.
He said with the recent increment, cost of clearing cargo and prices of goods rose astronomically while importers pay more through their clearing agents to Customs as duty payable.
“The industry is facing a tough time due to policy inconsistency. We have the issues of insecurity, obsolete infrastructure and other challenges facing our maritime sector already. The unstable exchange rate has done more damage than good to us we the importers. That is the reason things are so expensive in the market because no importer will not like to make profit. So we need to adjust the prices of our imported goods to make profit.
“Due to harsh business operating environment, some importers are already leaving Nigeria for other neighbouring countries. With the rise in exchange rate, people are already abandoning cargoes at ports while we already had 60 per reduction in importation. Government needs to do something fast to avert the harsh effect this will have on ordinary Nigerians and business community,” he said.
A former rail worker, Lasisi Adekunle, said the year 2023 has not different from any other years in the maritime sector because the challenges facing the industry are still the same thing.
“Tell me, how many of the ports that are properly connected to rail? We like making a noise in this country while other nations are busy developing. By now, 80 per cent of our ports should be effectively and efficiently connected to rail. Cargoes should be moving via rail and this is the cheapest means of transportation all over the world.
“Even the commerical rail is still struggling with the issues of insecurity, ticket racketeering and many more. I wonder why we can put things in the right perspective. The absence of an intermodal means of cargo evacuation left many Nigerian roads dilapidated and contributed majorly to the traffic gridlock that rocked the Lagos ports access roads in past years.
“Recently, the commencement of Lagos to Ibadan cargo evacuation by rail in September took place. During the inauguration of the first trip in September, the Minister of Transportation, Saidu Alkali said that NRC will be doing three trips in a day from Apapa Port to Ibadan. If you multiply three trips by 30 days, that will give you 90 trips in a month.
“Its been four months since the NRC launched the Lagos cargo train, issues outside train operations like multiple handling charges, availability of cargoes has meant that the 90 monthly trips spelt out by the Minister of Transportation has remained elusive,” he added.