Having arrived Lagos for a week-long tour of key transport assets and crucial engagements with stakeholders and government agencies, the Minister of State for Transportation, Senator Gbemisola Saraki draws the curtain on the adventure today with clearer understanding of the myraid of challenges in the sector; yet few solutions.
The problems identified in the last one week include; dilapidated port infrastructure, absence of intermodal transport system for cargo evacuation from ports, long vessel turnaround time and long cargo dwell time at ports, varying degrees of corruption resulting from human interface, absence of single window, lack of an independent national regulator for the transport sector.
Others are; non refund of container deposits, insufficient holding bays for empty containers, high cost of moving empty containers from holding bays to seaports, absence of a maritime master-plan, overlapping functions and conflicts between government agencies, security threats along inland waterways and at ports, multiple units of Customs and other agencies operating outside the ports without Standard Operating Procedures (SOPs), seafaring and indigenous shipping challenges, etc.
While the Minister showed a high-degree of patience to listen to these challenges, she equally displayed a great concern about solutions, but The News Diet has observed that a large portion of the issues require the political will from the government as well as a significant degree of support from other Ministries, Departments and Agencies (MDAs) outside the transport sector.
The commitment and contribution of the Ministry of Finance and the Central Bank of Nigeria (CBN) will be needed to provide Nigerian shipowners the monetary incentives required to stimulate shipping. Although NIMASA has wrestled and succeeded in attaining zero import duties for new vessels, there are no reports to show that this success has translated into more indigenous ship ownership.
Seafaring challenges aren’t unconnected to the non-availability of indigenous operators with ocean-going vessels, yet there exists a huge and untapped opportunity in crude affreightment controlled by the Ministry of Petroleum, Nigerian National Petroleum Company Limited (NNPC) and its shipping division, NIDAS. Nigeria’s largest indigenous vessel owners, NLNG functions more in a seperate ministry and the company has remained unwilling to place its vessels under Nigeria’s ship register.
The gains of a National Single Window are well-known, especially as a viable tool to eliminate human contact and consequent corruption in cargo clearance. Single Window is under the purview of Customs and there appears to be no hope in sight on this realization by the agency supervised by the Finance Ministry with Customs believing that it’s e-portal which is connected to some other agencies, should suffice as a National Single Window.
Scanners for speedy examination have been tipped to expedite cargo examination at ports but Customs have taken delivery of scanners at the nation’s busiest ports in Apapa, Tin Can and Onne, more than two months ago, but no Command has deployed this long awaited critical infrastructure.
NPA’s engagement with terminal operators should be contractual but there’s no defined regulator in the transport sector to check the excesses or contractual breaches of NPA. The anguish of terminal operators range from; electricity to collapsed quay aprons, bad fenders, poor security, dredging problems especially in Calabar where concessionaires were promised 9meter draft but have operated with 5-6meters throughout the concession.
The port access roads in Lagos have been managed at several instances by Navy, Police, Army, Federal Roads Safety Corps (FRSC), Presidential task teams and trucker’s taskforce and Lagos traffic agencies, nevertheless, the results have been varying levels of corruption and extortion in a system that supports such practice. NPA’s electronic call-up system hasn’t delivered the desired results as it continues to operate with human interferences while truckers who get to the ports legitimately remain there illegitimately to source for other businesses.
With barely eight months to orchestrate massive transportation reforms in the country and the growing uncertainties following the Ministerial nominees, it may not be fair to expect a miracle. Nevermind, a miracle is a remarkable event or development that brings very welcome consequences and Gbemisola Saraki doesn’t seem to mind the challenge with her erudite, frank and realistic approach to issues while engaging stakeholders and rating the performances of agencies.
Here are some highpoints from the Transport Minister’s engagement with stakeholders as she re-echoes some hard truths:
Container Holding Bay Conundrum
On the issue of holding bays, we need to have a separate meeting on some of the issues. However, I think it would be nice to have electronic notices that show the number of free spaces. Let’s not pretend because we know what happens. We have situations where the holding bay could take up to 10 trucks but we pretend that the holding bay is full.
Majority of these holding bays are privately owned, so there are issues with regards monitoring and there has to be consequences on what should be done that isn’t done. The problem is that people have been able to get away with things and behave in any manner because there are no consequences.
Port Access Roads Unending Reconstruction
We need to address state of the port access roads because some of these roads contracts were awarded in 2018 and they still haven’t been completed. For a 34km road that has taken several years to complete, it shows there is an issue of monitoring. I can assure you that pretty soon we are going to address these aspects. These are the low hanging fruits that can be sorted out in the short term.
Vessel Turnaround Time vs Neighbouring Ports
Some of the representatives here can tell us about the challenges with operators at the ports.
The ports we are competing with are in Ghana, Togo, Benin Republic. I have a good relationship with the Ministers in these countries and I have seen their ports as well as ours and there is a big difference.
Bearing that in mind, what is the vessel turnaround time in these competing nations? In everything we do, it’s important to know what the competitors are doing. When you take the average of the three major competitors, you’ll find that it is around 5-6days. So, Nigerian ports can’t assume to be doing well when it records 11 days vessel turnaround time when the
What we are saying is that every Nigerian operator at the ports is guilty and have contributed to the problems at hand. This conference is for everyone to confess and accept responsibility so that we could go forward to the next action which is to explore solutions.
If there is synergy and the systems are digitalized to reduce human intervention and interpretations, Nigeria will fare better.
Having stirred the troubled water of the nation’s port sector, industry stakeholders were at ease to outline more bitter truths:
The Perspective of a Freight Forwarder
Ease of Doing Business at Ports
We don’t have ease of doing business at ports. Freight agents are suffering and it’s very unfortunate. Nigeria is a signatory to the World Trade Organization (WTO) Trade Facilitation Agreement but we don’t facilitate trade. The major problem and this is almost 60 percent rests with Nigeria Customs Service (NCS). We have a Customs Service that doesn’t comply with international best practices. When we say Customs don’t facilitate trade it’s also courtesy of the federal government because they keep giving Customs revenue targets which encourages Customs to slam outrageous and illegitimate duties for importers to pay.
This is one of the major problems at the ports and until we are able to solve Customs excesses, the challenges will continue. 99 percent of the cargoes at the ports are examined manually and about two months ago scanning machines were purchased and mounted in Onne, Tin Can and Apapa. In the last two months, Customs haven’t used these equipments and we don’t know why.
We also have a situation where Customs subjects every cargo to internet value and this negates the various international conventions that Nigeria is signatory to. We have the Common External Tariff (CET) domesticated in 2003.
If I’m importing a bottle water and Customs disagrees on the value, there are six principles on which we could decide the value but Customs aren’t willing to utilize these principles. They just look at the internet value and slam it on importers who pay because they don’t want to pay additional demurrage and storage charges at the ports.
The federal government hasn’t been doing well because the various access roads leading to the port are dilapidated. For the roads that have been contracted, we now have the contractor holding the nation to ransom. We don’t know the terms of reference such as how long it was agreed to construct the roads. There are cases where road contractors remove certain barricades for importers and truckers to access certain strategic parts of the road. You need to visit to see what happens at the port.
Intermodal transport system is also lacking at Nigerian ports. I visited Rotterdam port few years ago and observed that they already had a port masterplan for 2035. In Nigeria, we don’t have a plan for our ports.
Talking about the concession agreement, stakeholders don’t have access to this agreement except through illegal means.
There’s a need to review this concession agreement and it’s not just a problem on the part of the concessionaires. The federal government has also failed in its responsibilities because there is no electricity at the ports. Diesel is about N850 per litre today.
We also learnt that the federal government is charging terminals in dollars based on cargo throughput and these operators are forced to source for this money in the parallel market. Instead of giving pilgrims dollar at the official rate, I would suggest that we give this opportunity to terminal operators who add value to the nation’s economy.
Most of the terminal operators licenses need to be reviewed. But before you sign anyone go to these terminals because some of them are still obtaining obsolete equipments which cause delays in cargo handling.
The Mystery of Container Deposits
There are too many illegal charges collected by shipping companies. This must be stopped because it takes about £1500 to bring a cargo from the United Kingdom to Nigeria but they collect their charges still seize container deposits. Nigerian Shippers’ Council (NSC) has brought up the option of Insurance but this hasn’t seen the light of day in the last two years. It is very easy for shipping companies to collect container deposits from freight agents and importers but it takes a minimum of 90 days to refund this money.
Shipping Company’s Perspective
It’s not logical that a vessel will come to Apapa to discharge cargoes and also go to Tin Can because there is a cost for these delays. I understand that Customs have different Commands but logically, if it’s a bill of lading to Nigerian ports, it shouldn’t matter where that container ends up. So, when there is congestion in Tin Can, the vessel should be able to discharge containers in Apapa and there’s no reason Customs shouldn’t clear that cargo. This will also create more competition between the terminals because there’s a choice by the shipping companies to go to any available ports regardless of the bill of lading. This will bring about efficiency, save time and costs.
On the issue of holding bays, this has been a huge problem over the years. However, I believe that in 2022 all the holding bays are free as there isn’t holding bay congestion at the moment. In my case we had 15,000 teu excess in 2022. The big backlog in 2018 to 2021 has been cleared.
Shipping lines are spending huge amount in Nigeria moving empty containers. The average cost to move an empty 40ft container from the holding bay back to the port is $700 which is about N400,000. Comparatively, in Ghana that would cost $25. So, there is a very high cost attached to container logistics and there is a need to bring down the cost with efficiency and improvements. Our principals which are shipping lines are also concerned about the full-cycle cost of shipping containers into Nigeria. If we can make the nation’s ports more competitive, we can be aligned with neighbouring countries.
We are negotiating with NPA regularly in terms of import and export situation with empty containers and we will continue to do that.
Fenders inside the ports have to do with NPA and for the last three months we have been requesting for fenders. We have had three accidents with vessels inside the port where the fenders have punctured holes on the ships. This is really urgent and I know that there has to be approvals for funds but this should be done as soon as possible.
Also, with waterfront security, recently we have had three or four attacks inside the ports. One time people boarded vessels inside the ports tied people up and carted away with goods from the vessel. This was a couple of weeks ago at APMT. At ENL, we were able to fight them off and they left. This is something that just recently started because we know NIMASA is working on the fairway buoy area, but the problem is currently inside the ports and there’s a need to look at the different communities around the ports. We are also constrained with the challenge of power. We have to generate electricity 24hours at the ports and this is a huge cost to us. Inside the ports, we have an Integrated Distribution Planning (IDP) with Flour Mills; they can provide power to all port facilities in Apapa, but for four or five years we have been trying to work on this but no one is helping to get it approved. The NPA has said that it is mandatory to use the government’s PHCN. However, if we can use the IDP, it would provide 24-hours supply everyday of the week which will make the ports much easier to operate.
I know that the federal government wants to do more local production of rice in-country, so there is no rice imported through the Nigerian seaports. How is there imported in the country? Where is it coming from? We were doing 1.8million tonnes of rice some 8-10 years ago. Now, we are doing zero importation of rice; yet in every store in every community in Nigeria there is imported rice. According to Customs, the borders are closed and no one is bringing rice via land borders but rice keeps coming from somewhere.
The Minister’s Perspective on Trucks
We have to work together in ensuring that we don’t allow the minority to destroy the profession with their bad behaviour. We are going to address the issue of the roads because we have seen the gravity of the problem.
The issue of trucks parked on streets, roads and bridges has to be corrected. NPA has started a process but with my naked Kwara eye I can’t see the difference because I can still see the trucks on the roads. For us, success is when we don’t see those trucks but NPA says they have tried to put in place a functional system but the users are the problem. Let’s look at how we ensure that with the call-up system trucks are only on the roads when they are called upon. Presently, we have trucks on the roads and obviously no one called them.
There are indiscriminate release of trucks by the managers of the transit park managers. If there is an e-copy and hard copy manifests everyone should know those expected to be on the roads. We are willing to work with NPA and other agencies to address this system. We want automation to address this problem because it’s a primitive approach to have trucks lined up on the roads.
Sometimes the officials assigned to create easy access to the ports worsen the traffic situation by attempting to extort truckers with legitimate business to do at ports. When they demand for bribes and the trucker shows his call-up and refuses, an argument ensues and in no time traffic builds up on that road. The enforcement team, especially the uniform officers at the multiple checkpoints on the roads.
As Gbemisola Saraki meets with the maritime press, women in maritime associations, and maritime lawyers, today; expect more revelations in the next edition of this article.