The financial crunch currently hitting hard on the country can be eased with domestic solutions, provided President Bola Ahmed Tinubu could wade into the port downsides and rejuvenate the nation’s trade gateways.
Investigations by The Guardian revealed that the current situation at the nation’s seaports largely fall short of the level of infrastructure and standard operations that is required to uplift the ailing economy.
The Federal Government, in its Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) 2024-2026 is planning to borrow N26.42 trillion loans between 2024 and 2026.
Economic experts believe that rather than continuous borrowing, the nation should look inwards and develop sustainable wealth creation strategies that would strengthen its economy and improve the standard of living of its people.
The Nigerian Shippers’ Council (NSC) had estimated that the establishment of a national fleet of vessels in Nigeria is expected to yield over $9.1 billion (about N7. 2 trillion) yearly in freight revenue.
However, the former Minister of Information and Culture, Alhaji Lai Mohammed, also revealed that the nation would earn revenue of over $201 billion (about N160.8 trillion) in 45 years from the Lekki Deep Sea Port.
Meanwhile, the existing seaports – Lagos Port Complex and Tin Can Island Port in Lagos; Calabar Port, Delta Port, Rivers Port at Port Harcourt, and Onne Port generated N361 billion for the Nigerian Ports Authority (NPA) alone last year, notwithstanding their poor states.
The Nigeria Customs Service is expected to generate N3.6 trillion revenue this year, and pundits believe that could be doubled if the standard operating environment is created.
Indeed, it has been estimated that the maritime industry alone can generate nothing less than $100 billion yearly (about N80 trillion) for this government.
Industry expert and ex-president of the National Association of Government Approved Freight Forwarders (NAGAFF), Eugene Nweke, said the industry was sick and in dire need of special intervention for it to yield the desired contribution into the economy.
He said the losses in the shipping industry were on the high side, while the cost of shipping was nothing to write home about.
According to him, the shipping industry lacks capacity for attaining seamless operations, hence the myriads of complaints in the sector.
He lamented that poor transportation networks result in the high costs of doing business at the ports and overall cost of goods and services.
Nweke also bemoaned the high shipping company and terminal handling charges, saying they are not competitive with those of the neighbouring countries.
He therefore urged the new Minister of Marine and Blue Economy, Gboyega Oyetola, to look inward and initiate good strategies aimed at solving the myriad of problems and creating wealth from the blue economy.
Speaking in the same vein, the President of the African Development Bank (AfDB), Akinwunmi Adeshina, said Nigeria must urgently begin a modernisation and transformation process of its ports for it to take advantage of several business opportunities in the sub-region and on the African continent.
Adesina had during a two-day mid-term ministerial performance review retreat stressed the need to allow the ports to function as business facilitators and not just for revenue generation, as it is currently with the Nigeria Customs Service (NCS).
The AfDB boss said: “Your Excellency, we should not be decongesting the ports in Nigeria; we should be transforming the ports.
He enjoined President Bola Tinubu to purge the port system of such avoidable challenges as administrative bottlenecks and duplication of functions by agencies of government in the ports.
His words: “Nigeria should rapidly modernise and transform its ports. Ports are not there for revenue generation. They are for facilitating business and exports, and stimulating industrial manufacturing, and competitiveness of local businesses and exports.
“This must start with cleaning up administrative bottlenecks, most of which are unnecessary with multiple government agencies at the ports, high transaction costs or even plain extortions from illegal taxes, which do not go into the coffers of the government.
“According to the sector operators, the cost of exporting 100 tons of cargo in Nigeria is $35,000, compared to $4,000 in Ghana. Today, the leading ports for West Africa are in Cote d’Ivoire, Ghana, Togo and Benin Republic. All these countries have modernised their port management systems, leaving Nigeria far behind.”
He urged Nigeria to immediately learn from Morocco’s world-class Tangier-Med port, noting: “The port is unique in that it is an industrial port complex, and a platform that has over 1,100 companies. They collectively exported over € 8 billion worth of goods in 2020.
“Companies located at the Tangier-Med port have allowed Morocco to move up the global value chains, including automobiles, automotive parts, aeronautics, agriculture and food manufacturing, textiles and logistics. Annually, over 460,000 cars are manufactured in the zone for exports. And more interesting is that the bulk of the human resources to do these are Moroccans.
“I took a walk at the Tangier-Med Port. I actually thought they were on vacation, as I did not see people — just machines, haulers, automated systems moving containers in what looked like a well-synchronised maze, with incredible efficiency. There were no kilometres of trucks waiting to get to the port.”
He also enjoined the government to take advantage of the Africa Continental Free Trade Area, noting that it presents a major opportunity for Nigeria, as consumer and business expenditures in Africa are projected to rise to $6.7 trillion by 2030.
The Managing Director of the Nigerian Ports Authority (NPA), Mr. Mohammed Bello Koko, concurred that there were challenges in Nigeria’s port management system. He pointed out myriads of problems bedeviling the sector to include collapsed port infrastructure, multiple checkpoints along port access road, lack of effective automation, lack of collaboration with sister agencies, duplication of duty, among other factors.
Koko recently noted that some of the ports were 100 years old. “Tincan is in a bad state; Apapa is cracking; Warri is bad. There is no port in Nigeria that is not having a problem, especially Tincan and Apapa.
“These two ports account for over 75 per cent of the cargo inflow into the country. The President and Minister of Marine and Blue Economy have mandated us to rehabilitate the areas.
“Lekki has enough area, which is why they are able to load and offload 10 or 20 containers but terminal operators in Tincan Island are using Rubber Gantry crane and that crane can only move a container at a time and if the space is not enough, they have three to five; and if they are moving at the same time, they can only move five containers instead of sea to shore cranes that can take 20 containers at a time. That is the beginning of inefficiency. Because it takes Lekki some few hours or a day to discharge a vessel, we have to multiply that by three or four for Tincan and Apapa,” Koko said.
On cargo examination, he lamented the fact that the Nigeria Customs Service relies solely on hundred per cent physical examination of cargoes, which he said contributes to delays in cargo clearance process.
“After spending two to three days discharging the vessel, the next problem is how is that cargo inspected? I think probably the last time we had a functional scanner operated by the Nigeria Customs Service was probably 2013, 2014.
“There is a hundred per cent cargo examination at all port locations. It is not efficient; it is not sustainable. You cannot physically examine all the containers that come into the port.
“While we can take less than five to 10 minutes to scan a container in Lekki, other port locations take three, four, five days to a week and they have to physically bring out everything that is in that container and examine it and send it back. But in a normal situation as in Lekki, the cargo is on a truck, the truck drives through it, and if it shows red, it means something is wrong with the cargo.
“The second thing is the access roads themselves. NPA is not responsible for the access roads.
“Before you even get to the port, you see multiple government agencies, most of them with fragmented departments; some of the government agencies have up to three, four departments.
“You clear a container here; you move to Point B, another division or department is stopping you and continuously like that,” he said.
However, industry operators see the creation of the Ministry of Marine and Blue Economy as a novel development geared towards rejuvenating the maritime sector, which is currently the second largest revenue generating industry for the country.
Maritime Security Specialist and Secretary General of the Merchant Seafarers Association of Nigeria, Captain Alfred Oniye, said: “We actually expect the best from the maritime sector. The Ministry of Marine and Blue Economy has been in place. We have been waiting for long for this kind of thing to come up.”
He pointed out that Nigeria as a country was seriously bleeding through the maritime industry, saying that the economic potential in the maritime sector has not really been tapped.
He added that with the potential of Nigeria’s maritime industry, the country shouldn’t be borrowing money, adding that Nigeria as a country is too blessed to be borrowing money.
He hinted that the maritime industry alone could generate nothing less than $100 billion annually for the government.
“It is only people who have an insight that will seize these opportunities. Maritime has what it takes to create jobs for more than 50,000 Nigerians directly and has what it takes to create jobs for nothing less than three million Nigerians indirectly. It takes someone who has insight,” he said.
The Minister of Marine and Blue Economy, Adegboyega Oyetola, who is saddled with the responsibility of harnessing opportunities in the sector, has begun the process of familiarising himself with the system, assuring of his commitment to scaling up the rating of Nigerian ports.
Oyetola said that the ministry was ready to launch a roadmap into harnessing the potential of the blue economy in Nigeria.
“Very soon, we will be talking of launching the roadmap and some of these things will be incorporated in the roadmap,” he said.
The minister has also informed that the rehabilitation of dilapidated infrastructures across Nigerian ports would gulp a whopping $1 billion.
Oyetola said the use of scanners should be imperative to all the ports of the nation, even as he wondered why the Nigeria Customs Service should be subjecting all imported containers to 100 per cent physical examination.
“The use of scanner is imperative and the Customs CG has to buy into what we are saying.
“Attitudinal problems are what we have because even if we have 10 scanners and the boys refuse to do the right thing, we are wasting our time.
“We have to get the endorsement of the president that scanners must be used at the ports,” he stated.
Speaking further, he said: “One of the things we are trying to do now is the rehabilitation of all the ports and it will cost a billion dollars and if we don’t do that, the ports will collapse
“One of the problems we have is that we lack maintenance culture. We understand the critical role the maritime sector plays in an economy such as ours. It is imperative that we quickly move towards improving the navigability of the waters, build the draughts of our ports and shift to 24 to 48 hours cargo clearance, ensure adequate connectivity from port to hinterland through an efficient road network.”
Oyetola said his ministry was determined to improve the country’s balance of trade by promoting export, which is crucial to earning foreign exchange and strengthening the value of the naira.
“You can rest assured of my unflinching support towards the implementation of such initiatives. Let me seize this moment to reaffirm the renewed commitment and result-oriented approach of the ministry,” he said.
Source: Guardian.ng (By Sulaimon Salau)
