The delay in the passage of the nation’s 2018 annual budget has started impacting negatively on port business as shippers now suffer poor sales caused by lack of patronage and shortage of money in circulation.
Consequently, seaports are witnessing relatively low ebb in business activities against the earlier expectations that this year will see high port performance, given the fact, it precedes an election year.
According to the Nigerian Ports Authority (NPA), daily shipping position report, an average of 30 vessels called on the Lagos Pilotage District on monthly basis, which was a little above an average of 28 vessels that used to call on the Lagos Pilotage District same period in 2017.
Reacting, Jonathan Nicole, president, Shippers Association of Lagos State, said in a telephone interview with BusinessDay, that delay in the passage of the nation’s annual budget affects every economic activity in the country including port business.
Nicole, who said that shippers as well as manufacturers make business projections based on the financial status of the economy, added that both the legislative and the executive arms of the government have no reason justifiable to delay budgets.
“If budgets are delayed, obviously shippers may not make their imports appropriately because sales will be distorted. On the other hand, sales also will be slowed because there will be no money to buy goods,” Nicole explained.
According to him, in the past, budgets were read out on the 1st of January of each year, such that people used to wait by their radio and television sets to listen to the New Year message, which budget was usually the main part of.
“A lot of warehouses are now filled up with goods due to lack of sales fuelled by shortage of money in circulation. While some importers intentionally bring in goods, store them in their warehouses and wait for the best times when sales will improve,” Nicole stated.
Stating that shippers are not bringing in as much goods as they ought to due to the economic uncertainty around possible changes in some fiscal policies, Nicole further disclosed that manufacturers bring in raw materials for industries on regular basis and if such was delayed, factories will run out of critical inputs including stock to keep them in business while some may end up closing down.
Recent statistics released by the National Bureau of Statistics (NBS), revealed that business activities at Nigerian Ports in 2017 closed at a promising note given a slight increase in the number of ships and their gross registered tonnage.
NBS report stated that the ship traffic at the ports recorded a total of 4,175 ocean going vessels with 131,569,821 gross registered tonnage in 2017 as against 4,622 ocean going vessels with 134,2,13,076 gross registered tonnage in 2016.
The statistics gave hope that port business in 2018, would do better judging by the fact that there has been stability of naira in the foreign exchange market and that this year is a pre-election year, when political parties are expected to spend more money on election campaign.
“Withholding the budget as well as low government spending, has been the reasons for shortage of money in circulation, which results in economic stagnation that is currently slowing business activities in the country,” Tony Anakebe, managing director of Gold-Link Investment Limited, a clearing and forwarding company, confirmed.
According to him, budget delay has serious implication on businesses because when budget is delayed, importers find it difficult to make good business decision especially as regards the consignment to invest their money on.
Anakebe said that new budget most time comes with new fiscal policies, which will either be favourable or unfavourable to importation business.
“This is because change in policy may result to some import commodities being considered into the prohibition list or considered for higher import duty or levy, which may have huge cost implication on the already ordered consignment.”
“Importers, who do not want to get their fingers burnt by investing on a particular import, stay put from doing any further business, until Federal Government decision is known. Believe it or not, annual budget has a lot to do with the economic situation in the country,” Emma Nwabunwanne, a Lagos-based, importer, told our correspondent.
Nwabunwanne however, advised the Presidency and the Legislative arms of government to resolve whatever rift between them in the interest of the economy and Nigerians at large.
AMAKA ANAGOR-EWUZIE
