Importers and businesses that depend on the nation’s seaports to bring in raw materials or export finished goods will save as much as N1 trillion in demurrage and storage costs annually, if the Federal Government’s executive order that ports should commence 24-hour operations comes into effect.
The N1 trillion estimate is the cost paid by importers annually, on account of delays caused by the use of cumbersome paper work in cargo clearance and inefficient port systems, stated a report by the Lagos Chamber of Commerce and Industry (LCCI) and the Financial Derivatives Company, published in the last quarter of 2016.
According to the Nigerian Shippers Council (NSC) report, the nation’s ports have the longest cargo dwell time of 19-25 days, compared to other sea ports in the world because cargo clearance takes longer days against the ideal period of two to seven days in Cotonou; Durban port, South Africa and Mombassa port.
“In Nigerian ports, an importer of a 20-foot container is expected to get five days demurrage free and to pay daily charges of N2,850 for 6-10 days; N4,400 for 11-24 days and N6,600 for 25 days and above.
Acting President Osinbajo on May 19 signed, a new ‘Executive Order on Promotion of Transparency and Efficiency in the Business Environment,’ directing the Nigeria Customs Service (NCS), Nigerian Ports Authority (NPA), terminal operators and other government agencies involved in cargo clearance at the nation’s seaports to begin round-the-clock operations at the port within 30 days.
“Currently, the marine and ship side of port operations, carried out by the terminal operators have been taking place 24 hours, seven days a week, without interruption in most terminals in Lagos ports. This means that ships bringing cargoes are being attended to any time and day, including public holidays and weekends. However, cargo clearance and examination by Customs and other agencies do not take place at night, weekends and public holidays,” said Lucky Amiwero, a maritime analyst, in a telephone interview.
According to Amiwero, only a few terminals allow agents to take delivery of already cleared consignments but 24-hour port operation can only have impact on cargo clearance, ‘if all the government agencies at the ports, including commercial banks that would collect import duties and clearing agents, are encouraged to work round-the-clock and every day.
“The situation where banks operate from 8am to 4pm everyday, would not allow the importers and their agents to pay import duty and obtain necessary clearance that would enable Customs to release the cargo. It is not enough to issue an executive order on paper, the Federal Government needs to put structures on ground to ensure round-the-clock power supply at the ports, as well as illuminate the ports and environs.
“As we speak now, the access roads leading to the ports in Lagos are in a sorry state and the question is, how would our ports operate 24-hours in such a state?”.
Amiwero also observed that there are too many agencies at the ports and for “24-hour port operation to achieve its aim, the government needs to prune down the number of agencies at the ports because many of them duplicate functions.”
Tony Anakebe, managing director of Gold-Link Investment Limited, also agreed that round-the-clock port operations will reduce demurrage charges importers pay to shipping companies and storage charges paid as rent to terminal operators for delayed cargo clearance.
Anakebe however said that “If 24-hour operation must work, the government must improve on the security system within and around the port by ensuring that port access roads are well illuminated and that security cameras are installed to monitor movement of persons and cargoes in and out of the ports. Security officials such as men of the Nigerian Police Force and others must be on ground to monitor activities around the ports,” he said.
Anakebe, who noted that the efforts of the past administration of Good-Luck Jonathan to introduce 24-hour port operations, as directed by Ngozi Okonjo-Iweala, then minister of finance failed due to poor infrastructure around the port area. He further observed that government must ensure that port access roads are in good shape to ensure free flow of traffic day and night.
“The past administration did not have the political will to implement the 24-hour port operation and the government also did not put pressure on agencies and other operators involved, so as to ensure that the ports operate round-the-clock, in line with the international best practices.”
Jonathan Nicole, President Shippers’ Association of Lagos, who commended the government for the new order, said that if well implemented, it would reduce the time spent in clearing goods from 21 days to two days, and further help in reducing the cost of doing business at the ports.
“Customs officers and all other operators that now work from 9am to 5pm are expected to be on seat regularly to attend to importers and their agents, and they can achieve this by running 12-hour shifts on a daily basis.
“If the Federal Government succeeds in implementing the 24-hour port operations, Nigerian seaports would become user-friendly and more efficient, reducing the dwell time of cargo and ensuring faster turnaround time for ships calling at the ports,” Nicole added.
AMAKA ANAGOR-EWUZIE
