High exchange rate, COVID-19, politics
Through Steve agbota, [email protected]
It has been a year of about-face for the Nigerian maritime sector in 2021, as various economic turbulences triggered by the COVID-19 pandemic have hampered the growth of the industry.
The strengths of these trends included the rising exchange rate, the scarcity of the dollar, relentless increases in tariffs, inconsistent policies and sloppy implementation which, combined with other exogenous factors, hamper realizing its enormous potential in 2021.
As every year, the lack of enforcement of maritime policies has posed a huge setback for the country’s maritime sector, in addition to a myriad of other factors ranging from poor access roads to seaports, to the lack of bays to sea. waiting and docks, inadequate truck fleets and inefficient traffic. management around the ports, in particular in the two busiest ports of the country in Lagos.
Likewise, the multiplicity of customs units and the extortion of importers by security guards also contributed to the inconvenience of the stories that hampered trade facilitation in Nigeria.
Besides the items listed above, the emergence of COVID-19 with its various variants is another known factor that has hampered the growth of the industry.
In 2021, Lagos seaports became transit routes for smuggling hard drugs and importing live weapons and ammunition. Security agencies, including the Nigeria Customs Service (NCS) and the National Drug Law Enforcement Agency (NDLEA), intercepted various hard drugs imported into the country during various joint operations.
For example, the agencies intercepted 32.9 kilograms of cocaine worth more than 9.5 billion naira imported through the seaport of Apapa. NDLEA also intercepted N 6 billion worth of hard drugs destined for insurgents in the port of Apapa in Lagos.
Customs also intercepted various firearms, live ammunition and illicit drugs on different occasions at the two seaports and land borders of Lagos.
Despite these unpleasant events, the maritime sector recorded some achievements during the years under review.
For example, in February 2021, the Nigerian Ports Authority (NPA) launched an electronic truck call system commonly referred to as “ETO” to deal a fatal blow to the perennial traffic jam responsible for delays along access roads leading to to the two busiest cities in the country. ports.
The system has also made some achievements in containing the traffic accumulated along the access roads to the port amid the corruption and human interface, which has prompted truck owners to request the system overhaul recently.
Also in June 2021, the Integrated National Security and Waterways Protection Infrastructure, also known as the Deep Blue Project of the Nigerian Maritime Administration and Security Agency (NIMASA), was launched by President Muhammadu Buhari, in order to reduce piracy in the country’s waters. This has earned Nigeria international praise from the International Maritime Bureau (IMB) among other agencies.
Despite all this, stakeholders during the year accused the federal government of not paying enough attention to the sector despite its enormous potential. They argued that the government was only interested in revenue from industry, but still had failed to repair outdated infrastructure and address other challenges facing the sector.
Speaking to Daily Sun, the President of the African Association of Professional Freight Forwarders and Logistics in Nigeria (APFFLON), Mr. Frank Ogunojemite, said that looking at the industry from a national or global economic perspective, the year cannot be considered acceptable due to the effects of COVID-19 around the world, which has resulted in an increase in maritime and port operations in Europe and North America.
“If we want to see how this has really affected the Nigerian economy, that’s a different thing because in most of the places I’m talking about governments have introduced stopgaps for businesses there.
Meanwhile, in Nigeria, no stopgap has been introduced to show that the government is really associating with the country’s businesses, ”he said.
According to him, the effects of COVID-19 in Nigeria are peculiar as most businesses have shut down drastically, as the effect was so large for homeowners and as such the government continues to increase costs.
“The government keeps increasing homework all the time. There is controversy in the reference from the customs side and things that the International Monetary Fund (IMF) complains about such as factors affecting port operations have not actually been realized.
“So the effects on the individual and the government on the national economy are both on different perspectives. So, indeed, from my point of view, it was a serious scourge in the country.
For example, we talked about the single window, which is taken for granted in port operations. But we haven’t really been able to do that in Nigeria ”.
He said that instead of the government talking about one-stop shopping, it is talking about increasing rights when citizens are suffering from the effects of COVID-19 and Nigeria is gradually going into recession.
According to him, things are getting complicated, inflation is high and no help is given, as importers and citizens are suffering from the effects of COVID-19 and the government has failed to put measures in place. to resolve the situation.
He said the infrastructure and rail in the shipping industry has not been realized while the shipping companies are taking advantage of all these things.
Ogunojemite said the effects of COVID-19 on the general economy and the government’s response to businesses are not very good.
Meanwhile, a former member of the Presidential Task Force on Nigerian Customs Service Reform; The Presidential Committee on Destination Inspection and the Ministerial Committee on Tax Policy and Import Clearance Procedure, Lucky Amiwero, said the year 2021 had been a disaster for the maritime industry.
“Catastrophe in the sense that we have a system that doesn’t work. This is a big challenge because Nigeria is losing out in many ways, the country’s port process is too cumbersome, costly and uncoordinated. No one controls it. Government agencies behave as they wish to the detriment of importers and industry agents. Importers and agents in the shipping industry are bleeding from the excessive cost of doing business in the country.
“The port of Nigeria is one of the most expensive ports in the world because our port is not predictable, not consistent and not transparent. The country’s port systems are not supported internally. We do not do anything that is in line with international best practices.
“So you have a port that is growing under a heavy cost burden. The cost implications run into the trillions of naira and simply because people are forced to use the port. If there was an alternative, people would have left Nigerian ports completely. I was talking with a retired controller, he told me that it is easier to bring a container from China than to get it out of the port. I’m glad he’s been in the harbor, he’s now a retired controller and he’s facing the system. When you are in the system you believe you are working for the government. No, you are working for the nation and you have to do your best so that the country does not cripple, ”he said.
He said the maritime industry has no base, no base and is run like a salon entity while the industry is nothing to write home about. He said customs did what they wanted; they do not obey the law and follow the procedures.
According to him, shipping companies also do what they want and a lot of their costs go unrecorded and all this does not help the economy.
“When you talk about the maritime sector for the year 2021, it is a bleeding sector where people are complaining under a very high cost burden. The Central Bank of Nigeria (CBN) is multiplying the exchange rates and tomorrow you will see Customs say they have made trillions. No, it is the multiplication of the exchange rate, it is not that customs is efficient. When an exchange rate increases, it increases the value of the cost of goods. These are the questions we need to consider.
“The access roads to the ports are bad and it takes more than 15 years to repair the road which is not up to five miles. You collect a seven percent surcharge, duties and all tariffs at the ports; above all, there is nothing exciting. The level of the port development system is collected, what are they used for?
“There will be a time when people no longer use the Nigerian port. The shipments entering the country are those that are forced to enter. Many people are already leaving Nigerian ports because they feel that no one is in charge of the port systems. It’s difficult to go to Apapa, ”he lamented.