“Most of the shipping companies strategically make use of containers that are about to expire to bring goods into our country and choose to abandon them back here, which is economically cheap for them as a way of disposing them off.”
“This happens because Nigerian government does not impose heavy fines on shipping agencies that abandon containers,” these are the words of the Chief Executive Officer of Ocean and Cargo Limited, Aare Jide Taiwo.
In this interview with Daily Sun, Taiwo spoke on challenges affecting the nation’s maritime and logistics industry.
How to harness numerous potential of the nation’s maritime sector
The maritime sector of every country is an integral part of the economy because it contributes a lot to the Gross Domestic Product (GDP).
Nigerian government needs to put more attention and do more in infrastructural development at the nation’s seaports and also invest in modern equipment needed in the 21st century for seaports business operations.
Wouls you believe that based on best practices around the world, it is just recently that Nigeria Customs Service just got scanners for cargo examination at the seaports. For many years, it had been done manually, with negative effects on clearing time and cause a lot of backlogs.
Maritime is a big business and the government has to take the port management more seriously. Apparently the port is generating a lot of revenue and part of this can be reinvested back for the development of same business that generates money for the nation.
I hope the story of seaports owned by Nigerian government will not be like that of public universities and private universities system in Nigeria because by the time private seaports are completed with modern days equipment, most importers and shipping line will patronise them more, which will lead to a drop in revenue generating for government.
Importers are still finding it difficult to clear their cargoes as a result of cumbersome procedures hindering clearance process. How do we solve this problem?
The present situation of the port as we speak can’t permit seamless clearing time, we have an Infrastructural decay challenges, access road is almost in extinct around Apapa, due to poor maintenance systems of our roads, improper planning of trailer parks around the seaports, congestion of oil tank farms and petrol tankers.
Sometimes, when I think about the present challenges in Apapa port, I really don’t know how an immediate solution can be effected. I once said that 100 per cent automation system of clearing process is the major solution to this challenges. Full automation system will create more jobs for Nigeria citizens, will encourage 24 hours Port clearing process and this will fasten clearing time and reduce backlogs, because staffs can work remotely from any part of the country all day and night because automation will cut off physical presence clearing.
The trailer parks can be situated in another state and be managed by private licensed logistics company well registered under the Nigeria Ports Authority (NPA) and they don’t have any business around the port aside from pick up appointments.
The full automation will block all the leakages of unaccounted funds that should be part of revenue going into Federal Government coffers for the development of the nation’s which, mostly end up in individual accounts.
All that I have said is not impossible to achieve, I have been to different ports in different countries, the first thing I noticed is that they don’t have the daily huge crowd we see at Apapa, yet these ports are more productive in daily operations because the system is automated. So there are models existing for whatever choice we choose to copy.
What do you think that can be done to solve the menace abandoned contaners?
Firstly, I suggest that the NPA should sponsor a bill that will make them take over abandoned containers or goods once they are more than six months old at the port. But a special three months additional waiver, when specifically applied for by the importer, can serve as time extension. The international best practice is for containers to be in use for five to six years and during which they can be refurbished two times before their life spans expire. Most of the containers dumped at our seaports are expired. Sadly, Nigeria does not have recycling plants to remanufacture these containers.
Most of the shipping companies strategically make use of containers that are about to expire to bring goods into our country and choose to abandon them back here, which is economically cheap for them as a form of disposing them off.
This happens because the Nigerian government does not impose heavy fines on shipping agencies that engage in abandoning containers. So, once a container is taken over by the NPA, people should bid for it and take over. This will decongest the terminals and create spaces for newly arrived containers. I will appeal to the NPA to grant more organisations that are willing to invest in container terminals approval to own such facilities. Adequate transfer should be done so as to decongest the port.
Remedies to cargo diversion to neigbouring countries
I must say that the government knows what to do as regards to policy reversing. As we speak, most freight forwarding firms have lost some of their clients because the policies are not very favourable to importers. Some of them have been frustrated out of business. Some are bankrupt, while some take their goods to neighbouring countries and later smuggle back into Nigeria.
I believe that importers should be considered in the area of clearing. When you listen to most of them, they say most times that they pay equivalent of 200 per cent of the amount the goods are purchased as clearing fees because of policies, which are not very encouraging for them to remain in business. It has been observed that the Nigeria Customs Service at the land boarders has recorded increases in cargo tariffs and revenue generated from freight coming into the country through the land borders. The land borders are recording unusual high cargo traffic, showing that importers are engaged in cargo diversions. I will advise the government to improve on operational delays at our seaports, which will discourage diversions to neighbouring seaports.
Do you think completion of Lekki Deep Seaport will address challenges associated with other ports?
The establishment of Lekki Deep Seaport will encourage shipping agencies and importers to patronise a new port with adequate infrastructure compared to patronising the older ports. The present challenges and poor services rendered at the old ports will definitely encourage us to patronise the new ports with better infrastructure. This will also reduce the traffic and decongest old existing ports. The capacity of the Lagos ports complex will be under- utilised. This under-utilisation will come into play by the time the Lekki Free Trade Zone comes into full operation. However, the development of new ports is a strategy employed to accommodate either an existing cargo surplus or a targeted increase in cargo traffic occasioned by improved technology that has led to increased shipment capacities. This helps to reduce the chances of diseconomies of scale that will be experienced at transshipment.
Do you think Nigeria is prepared for African Continental Free Trade Area?
Nigeria is not well prepared for the African Continental Free Trade Agreement. The whole essence of AFCFTA is to accelerate intra- African trade and boost African trading positions in the global market by strengthening African common voices and the policy space in global trade negotiations. According to the African Union, this trade agreement, if implemented fully, will create a continental free trade zone with a combined Gross Domestic Product of $3.4 trillion. The AFCFTA calls for reduction of tariff and non-tariff barriers and the facilitation of free movement of people and labour, rights of residence, rights of investment and establishments