Making the ports more efficient
Friday, 10 February 2012 | 00:00
With the introduction of the 24-hour ports operations, the country appears ready to remove all impediments that hamper efficiency and prompt cargo clearance. Maritime correspondent OLUWAKEMI DAUDA examines the underlying factors that can help the country attain greater efficiency and boost the economy.
The ports appear to remain a headache despite efforts to reform the maritime sector. Cargoes still spend weeks before they are cleared, while the proliferation of agencies at the ports constitutes a barrier to economic growth. But the government is moving to change things. It has pruned the number of agencies at the ports as stipulated in the Port Acts No 61 of 1999 and directed that the ports be opened for 24 hours. All these are aimed at greater efficiency and improved revenue.
Odds against ports reform
Stakeholders are urging the government to look beyond the economic gains it intends to derive from the tariff imposed on importers and exporters and look at the implications of multiple taxation on 24-hour port operations and the economy. According to them, the government has nothing to lose if it stops multiple taxation now that it has introduced 24-hour operation at the ports.
Security at night
Before now, past governments did nothing to make the ports functional all day.
The initiative to address the issue was therefore, seen by some stakeholders as a laudable attempt to solve the problems of the ports. However, others said the 24-hour operations is another avenue to milk Nigerians. They insisted that the current port infrastructure such as power, rail and security do not support 24-hour operations.
Opening the ports at night and asking importers and agents to clear their goods with prevailing high insecurity in the country, they said, is like inviting trouble.
They urged the government to ensure security at night to prevent attacks on importers and freight forwarders.
Reduction in agencies
In June 2010, a Ministerial Taskforce set up by the former Minister of Transport, Alhaji Yusuf Suleiman, to fashion out ways to attain efficiency in port operations identified 15 agencies working at the ports. The taskforce, headed by Mrs Chinwe Ezenwa, a Deputy Director in the Ministry of Transport, noted that the agencies were involved in cargo clearance, thus making the process cumbersome, inefficient, slow and expensive. Some of the identified agencies are:
• Nigerian Ports Authority (NPA);
• Nigerian Maritime Administration and Safety Agency (NIMASA);
• Nigerian Customs Service (NCS);
• Nigerian Immigration Service (NIS);
• Nigerian Police Force (NPF);
• State Security Service (SSS);
• National Agency for Food, Drug Administration and Control (NAFDAC);
• National Drug Law Enforcement Agency (NDLEA);
• Port Health;
• Veterinary Quarantine;
• Plant Quarantine;
• Federal Produce Inspection Service (FPIS);
• Directorate of Naval Intelligence (DNI);
• Standards Organisation of Nigeria (SON);
• National Environmental Standards and Regulations Agency (NESREA); and others.
As if these were not enough, more were still springing up before SON, NAFDAC, NESREA and others were sent out of the ports.
"Most of these agencies caused delay during clearing as a result of checks and rechecks. These interference and overlapping of responsibilities by various agencies constituted greater part of the port problems. Where operators perform roles earmarked for others, conflicts arose and this lead to further delays and the ultimate looser is the ordinary consumer,’’ said the Managing Director, Shipping Investment, Mr Dolapo Adesegun.
Adesegun said the huge number of government agencies at the ports posed serious challenges to the ports operations. He said he had no iota of doubt that the ports are set for greater efficiency with the current reduction in their number coupled with the introduction of the 24-hour operation by the Federal Government.
Security agents, shipping companies and terminal operators have since formed what maritime analysts have described as a triad of vicious extortions in recent times.
Importers and clearing agents working in the nation’s maritime industry said they were not happy with the policy of the Federal Government that allows terminal operators violates agreement.
The Chairman, Bolas Shipping, Mr Gboyega Asafa, said the greatest challenge facing maritime transportation was multiple taxation and unnecessary charges by terminal operators, shipping companies and service providers, which are not commensurate with the services rendered by them.
Importers and clearing agents, Asafa said, pay huge amount of money at different points in the ports before their goods are cleared.
The shipping companies, he said, also force agents and importers to pay deposit for containers loaded by trucks. He alleged that in most cases the terminal operators look for needless excuses so that the monies would not be refunded after the agents have returned the containers. All the challenges, if not addressed, would hinder the 24-hour operations and delay efficiency.
A senior manager working at the one of the terminals in Lagos who craved anonymity, blamed the high charges on the rising prices of petroleum products to run their machines, the cost of acquiring cargo handling equipment and the need to make returns on their investments. He denied the allegation that they are extorting importer and agents. ‘‘We only collect what the agreement says we should collect from them,’’ he said.
The Chairman, Wet & Cargo Investment, Mr Samson Philip said there is need for the government to verify and fine-tune the current cargo handling practices to bring to bear the benefits of the reduction in the number of its agencies and regulates the charges adopted by terminal operators to boost trade facilitation and make the 24-hour operations meaningful to importers and the Nigerians.
Philip said six years after the ports were concessioned, the cost of doing business have increased astronomically, adding that given the current situation in the ports in terms of cost, the country may be elevating failure to the status of world class, consequently, he said this was the reason why the government to took the bold decision of opening the ports 24-hours as done in other countries.
Before now, there have been complains by the stakeholders that there were too many government agencies that were aiding and abetting corruption in the port and hindering trade facilitation.
Multiplicity of inspecting agencies at the ports, stakeholders said, was one of the major reasons why the nation’s sea ports are not attractive for business. This is also why the 48- hour cargo clearance policy by the Federal Government did not yielded the desired result.
Most of the time, importers and their clearing agents complained that they had to get clearance from each of the agencies in the port irrespective of the type of cargo they brought into the country before their goods leave the port. This, the importers said, was after Customs must have done its statutory examination of the cargo and certified that it could leave the port.
‘‘Instead of goods leaving the port after Customs clearance, agents spent extra days to sort themselves out with the other agencies, which had to sign and stamp the clearance slip. This attitude, clearing agents said, promotes corrupt practices, hampers trade facilitation and delays efficiency,’’ said the Executive Chairman, Badmus Shipping Company, Chief Fola Badmus.
Badmus said he was happy with the 24-hour operations introduced by the government and urged Customs to embark on retraining of its officers in tandem with the current challenges.
The leadership of the service, he said, should not assume that everything is well as some of the officers are too lazy to work at night.
Corrupt practices by many officials of the remaining government agencies at the ports and the delay in cargo clearance may hamper the efficiency that the government intend to achieve with the introduction of 24-hour operations.
A majority of the stakeholders, who spoke to The Nation on the issue in Lagos, expressed dissatisfaction with the lack of integrity, honesty and accountability exhibited by some of the officials of the remaining agencies. They said corruption and its resultant effects on the economy and the image of the country may render 24-hour policy useless, unless the remaining agencies are put under close watch.
For instance, the Executive Director, Bolas Enterprise, Mr Samson Albert condemned a situation where most of the cargoes that come to the ports are still subjected to 100 per cent examination by Customs. The demand for 100 per cent physical examination of most of the goods coming into the country, he said, leads to extortion of money from importers and their agents and also translates to payment of demurrage to terminal operators.
‘‘It takes a very good mind and the interest of the country to conduct examination of goods that were properly declared and give the appropriate duties. It needs the sincerity of all of us. Take for instance; in many other ports we have visited sometime, do you really see the Customs? It is a culture that has been imbibed by us that we now call corruption. Corruption that we have actually legalised in the country thinking it is the right thing. There must be an enforcer and a law abider for us to achieve efficiency in our ports. We must all in trade facilitation make sure that 24-hour port s operations works," he said.
Goods clearance in neighbouring ports
While it takes between two and four days to clear goods in other neighbouring ports such as Ghana and Benin, it takes 39 days to do same in Nigeria before the reduction in the number of government agencies at the port and the recent introduction of 24-hour port operations.
The agenda to achieve 48-hour clearance time for cargoes at the ports, operators said, is hampered by the presence of a multiplicity of government agencies with responsibility for cargo examination, clearance and delivery.
Ideally, that role, stakeholders said, is for the Nigeria Customs Service. At best, other agencies can partake in cargo examination when their services are needed at the port without necessarily having their offices and officers stationed at the ports..
The Managing Director of the Nigerian Ports Authority (NPA), Omar Suleiman, was of this opinion.
The NPA boss told The Nation that the multiplicity of the government agencies at the port was responsible for the non-copetitiveness of the nation’s sea ports. He said that was why the Federal Government had to reduce their number.
‘’Since the Nigerian Port Authority has gone through reform, there is need for the Federal Government to reform other agencies to aid the one-stop shop we have been canvassing to boost government revenue.’’
Suleiman blamed the inefficiency at the ports, incessant delay in cargo clearance, corruption, cargo diversion and smuggling on the huge number of government agencies operating in the ports in the past. But with the reduction in their number and 24-hour ports operations, Suleiman said, the agenda is set for the country to achieve greater efficiency in her ports.
Exploitation by terminal operators
Despite the modest growth recorded by the seaports in the last few years, the inability of the Federal Government to appoint a technical regulator in a landlord port model almost six years after the port concessioning has, no doubt, created a vacuum, which terminal operators are exploiting to bring inefficiency into the ports at the detriment of the nation’s economy.
The Federal Government directive that NPA should regulate port charges and enforce the 24-hour operations at the port was, therefore, seen by stakeholders as a positive step in the right direction.
Stakeholders said if any official of the remaining agencies become uncontrollable and self-centered, NPA should make prompt report to the authority.
The resultant effect of the unholy activities of some of the officials of the sacked agencies, an importer, Mr Samson Adeleke said, was high cost of port operations, creation of several toll units by the agencies and the attendant diversion of the nation’s-bound cargo to ports of neighbouring countries.
Ports as transit point
Speaking to The Nation in Lagos, the National Chairman, Shipping, Logistic and Trading Association, Price Adefemi Ojodu, said the Federal Government introduce the 24-hour operations to make the nation sea ports a transit point as done in developed countries.
The Federal Government, Ojodu said, should be praised for introducing the scheme after reducing the number of its agencies and insisted that the remaining agencies should learn to carry out their regulatory inspections within the stipulated period.
All inspections, Ojodu said, should be done in line with the trade facilitation programme of the government.
‘‘We are happy that Federal Government is set to make our ports a transit point as done in other developed countries. We believe. He should not relent in it efforts to the 24-hour operation was introduced to achieve greater efficiency in our ports. The time to make our ports work is now. If we do not get it right this time around, it may take us another 10 years to do that and that is why we must all support the current initiative to make the ports efficient.
For the stakeholders, the government should enforce the 24-hour ports operations on the altar of trade facilitation and efficiency. They urged the government to give Customs the statutory powers to clear cargo at the ports. According to them, officers and men of the Customs should be sufficiently trained to imbibe international best practices in carrying out their statutory functions at the ports.
They also called on the government to address the non-competitiveness of the ports by developing port infrastructure, have a strategic port planning, address port pricing and regulation, develop comprehensive policies for modal integration, harmonise trade policies, simplify standards, adopt common regulations and procedures, infuse deeper technological penetration and increase education for officers, importers clearing agents and other users to position the ports for greater efficiency
Source: The Nation