Home 2 Maritime 2 How Wrong Concession Make Nigeria Ports Lose Seven Trillion Annually- Amiwero

How Wrong Concession Make Nigeria Ports Lose Seven Trillion Annually- Amiwero

Managing Director of EYIS Resources Limited, Mr Lucky Amiwero is an international trade consultant and licensed customs agent. The versatile trade expert also doubles as the National President of National Council of Managing Directors of Customs Licensed Agents (NCMDCLA), in this exclusive interview with Ajibola Abayomi, he critically examines the state of the Nigerian ports and also bares his mind on other issues in the maritime sector, Excerpts….

Several issues have been raised about the state of Nigerian ports, how will you assess operations therein?

Amiwero

There are lots of people and agencies that work in the port. Our port system is not yet reformed. I was part of the people that served in a government committee in 1999 that ensured the reduction of numbers of government agencies at the ports through decree 61 of 1999. Section 1a and b of the decree listed the numbers of people and agencies that are expected to be at the port. Section 2 of the law only empowers Customs to determine who goes and come out of the port. Section 30 of the act clearly states the role of licensed agents, which are to classify, treat and apply the necessary procedures to get the goods delivered.  Now, we have about eight agencies of government that contravene that law. In modern terms, our trade procedures and cargo clearing terms are crude and cumbersome and even below the 19th century because of the collapsed of scanners system. The right is that once you have validation process, you don’t go through crude circles because 80% of the port operations are done through scanners. In our ports today, it is more of 80% physical examination.

So between the licensed customs agents and freight forwarder, who are to be blamed for some undue logjams at the portS?

The Council for Freight Forwarding of Nigeria, (CRFFN) act is very clear that any person who arranges goods or transports such from one destination to the other, which means such a person is a transporter. Licensed customs agents are not transporter. The customs licensed agent is under section 153 of the Customs and Excise act. Under section 156, it was clear that the customs agents are not regulated by the ministry of transport but by a board. The freight forwards by the provision of the act are to operate at the international boundaries because the Constitution designates the port as the customs areas of operation in Nigeria. The freight forwarders have to go and look at where they operate.

With the CRFFN Board now in place, are we going to have both the licensed customs agents and freight forwarders grouped together?

That is not true. The agents are under the Customs and Excise Management Act under section 152. The freight forwarders are under the CRFFN act because the purpose is just to regulate activities of those transporting goods. Anything that has to be done by importer and exporter has to be done by licensed customs agents which are under the ministry of finance.

So to what extent is the ease of doing business order impacting on trading at the maritime sector?

Ease of doing business is not a law. It is a World Bank trade procedure. It has to do with transport, boarder and internal compliance. The core component is trade across boarder. Out of 190 countries in the world, Nigeria is ranked 183. In Africa, we are the last. Nigeria is terribly bad in terms of trade across boarder because our trade procedures are lengthy and cumbersome without compliance with international trade laws, treaties, rules and procedure. Our fate-components are documentary procedures, treaties and the transport system is a misnormal and crude. Most of the people in authority don’t even understand the law. We have very weak procedural systems that are affect our rating. Within the Economic Community for West Africa States (ECOWAS) region that includes Benin, Togo, Ghana and Cote d’ivoire. In cargo we have three layers. On the transit trade, Nigeria has been delisted because our procedures are too lengthy instead Ghana, Benin and Cote d’ivoire are taken such advantage. They are making huge money. Canada has taken over our transit trade because they are technologically compacted whereas we are crude. Secondly, Ghana has a dedicated VAT. Internationally, we have a weak procedure system and most of our processes lead to increase cost.

Can’t all these challenges be surmounted and we get the scanners fixed?

The scanners’ in the country came in 2006 and there was a six-year contract which lapsed in 2013. The contract was to have six months maintenance and spare parts deal.  There is a clause that has to take component of labour and spare parts. The manufacturers of the scanners as stated in the contract are expected to transfer the scanners to the Nigeria customs and put them through the expertise required with spare parts after six months of the expiration. The government that looked into that matter at that time recommended 1.6 million euros for that. The present government should look into what is wrong now in order to act well. We should have had entirely new scanners after 2013 if the processes were followed before handing over to the customs. Scanners are tools for examination and security. The government did not put into consideration those things so the scanners remain in such state.

What form of reform will you suggest at the ports?

I have put up a paper before the Federal Government on import, export and transit regulatory reforms. Government should call experts because they know what to do. Most of the operations in the maritime sector are not backed by laws. You cannot have sanity without implementing the laws. Conventionally, we are not complying with rules. Our procedures are wrong and the shipping companies are exploiting us. There should be a legal procedure for proper regulation of the ports. Government agencies and operators are operating according to the sentiments. The concessional of the port was done without proper law. Now we have a system that is bigger than the government because there is no regulator at the port unlike what is obtainable in other parts of the world.

Are you saying the Nigeria Ports Authority (npa) is no longer a regulator ditto for other regulators in the maritime sector?

There is no regulator in the port. Nigerian Maritime Administration and Security Agency (NIMASA is to build capacity for indigenous shipping. It is not a revenue generating agency. It has its own function. 25% of its revenue are supposed to be focused on training at the maritime academy and shipping facilities for Nigerians. Is that what the agency is doing now? The NPA has nothing to with port operation, regulations and the landlord. The landlord is in conjunction with the terminal operators. The port regulations are to be handled by the Shippers’ Council. Elements in the port operations are labour, traffic, tariff and infrastructure because those are what are being conceived. No law backs the present concession that is why the harbor bill is still before the national assembly. What we have now is that the port is on a lease five years according to port act of 1999.

Can’t the ports be modified despite the glaring lapses?

It is going to be difficult. First the concession was faulty because there is no holding bay. No export facility inside the port. The terminal operators destroyed all these things and took over the land. No government warehouse inside the port as stated in the port act and export facility through container is not likely within the port. The holding bay for trailers to take away congestion of trucks no longer feasible, there used to be holding bay at Tincan, Apapa, and KIT. All those places have been taken over by the terminal operators. The Lagos ports zone has no holding bay. Government has concessioned everything. The repair of road and other infrastructure are supposed to be the responsibility of the NPA but government has concessioned everything.

How can the Federal Government gets things right?

The port is the gate way to the economy. Once the port system is not working, it would affect everything. Shipping companies has not folk lift, they have no containers and they charge more than every operator. On a containers that is not supposed to more than 2000 dollars they charge up to four million dollars and government is there watching. I warned the NPA before the concession that they would lose 90 percent of their prime operations.  Government creates tendencies for corruption by not making the scanners function to reduce contacts. In 2006 to 2013, things were done through the scanners but when they handed to the customs and the story changed. The World Trade Organization (WTO) law is clear on what is customs to customs and customs to business in the area of out and in borne inspection. There is need for total reforms that will be bring about single window inspection as against many agencies we are having now. What we have on ground is conflict of interest leading to addition charges that is affecting our trade rating. We need an overhaul port system to correct all these. Other countries are collapsing their inspection regime but here is a different thing. Going into the port can take you more than months and coming out is months again. We are losing all our freight components to the neighboring countries like Togo, Ghana and Ivory Coast. Transit, domestic transshipment and the other legs is cargo. The drought level of our port is not up to 16, we are still between 12 and 13 feet. Togo and Ghana have drenched their ports. Togo and Ghana ports are about 16 and 17 meters. Ghana by 2019 will be around 19 meters. Most terminal operators are the owners of the ships. They are exploiting us and smiling to the bank every day. They are manipulating the whole thing and the country is groaning. Let government set up experts committee to review our trade processes and port operations. That is when we shall recover our cargoes. Maintenance of the port operation should be handled by government through regulation and management of the ports. I have served in over 167 committees that put things in order. Nine of those committees were presidential. Nigeria should look through international convention, highlight the challenges and get solution side by side.

There has been huge cry about Cabotage Vessels Fund (CVF), how can an average Nigerian in the shipping sector benefit from this?

Nigerians have not really benefitted from CVF at all. People should ask questions to push for things that are enduring. Section 23 of port act says after five years, the law has to be reviewed because almost every section of act has the ministerial waiver. The people never bothered to challenge the minister of transport on this. The 25 percent of NIMASA fund is to be used to develop indigenous shipping and facilities for development of Nigerian shipping line.

At the last International Maritime Organisation (IMO) Convention in London, Nigeria lost out, what are the lessons to be learnt to forestall such in future?

Nigeria is not complying with anything so there is no hide and seek game. Most of international treaties we don’t comply with. The ones we domesticate, we don’t implement. The volume of trade at the Nigerian ports is huge and we are losing more than seven trillion naira annually due to cumbersome trade processes tied to irregular changes not known to law. The importers are suffering because the system has bastardized their profit margin. Government should stop using NIMASA, NPA, and Customs money as revenue because their have functions to perform. How many real trade ships come to Nigeria because of our port draught level cannot contain them? No serious oceanic business in Nigeria. Since 2013, NIMASA has been collecting Carboutage Vessel Fund (CVF), what have they done with it? It was meant to provide financial assistance to ingenious coastal development? The solution is for the experts to come in and reform the marine sector to put law, procedure and processes right and things will work.

 

 

 

 

 

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