The latest stakeholder alarm on shipping costs in the Lagos port area shows the urgent need for a quick resolution, especially as Nigeria continues to be impacted by the economic downturn.
According to a recent report by the Financial Times of London, congestion at the Tin Can Island port in Lagos has become so bad that transporting a container from the port to the mainland, just about 20 kilometers inland, now costs around 20 miles. $4,000 (N1.5 million). That's almost as much as shipping a container from China to Nigeria, a distance of 12,000 nautical miles. This is a costly economic impediment that must be addressed immediately.
Reports say that a large number of containers are stuck at ports and ships are forced to berth for three to four months, incurring various surcharges and forcing some shipping companies to increased fees by nearly 600%. Simultaneous congestion at the ports of Tin Can and Apapa has forced cargo to Nigeria to be transported via smaller vessels from ports in Cameroon, Congo-Brazzaville, the Republic of Benin and Ivory Coast.
Like many other problems with the 'African Giants', the situation at ports is made worse by bureaucracy, corruption and the utter incompetence of government agencies. The self-inflicted congestion costs Nigeria US$55 million (20.9 billion N20.9 billion) per day in lost economic activity or more than $19 billion annually – a loss of more than a year. half of the 2021 budget.
According to the Marine Truck Owners Association, security officers will not let them into the port unless they pay a bribe of between N70,000 and N200,000 a year. A federal lawmaker, Olusola Fatoba, who shares this view, said in some cases the bribe amounted to N300,000 years. He alleges that law enforcement officers supposed to maintain law and order at ports formed a gang with port officials, extorting money from carriers. With no less than 2,000 trucks docked daily, nearly 400 million Naira pours into individual pockets every day without consequence. That corruption cannot be allowed to continue.
Although the now-defunct Presidential Task Force chaired by Vice President Yemi Osinbajo is still able to prevent trucks from coming to a standstill on some highways, especially on Ikorodu Road, urban roads of Surulere, Apongbon Bridge, Eric Moore area and Eko Bridge, but residents and businesses lamented. Owners and visitors to Apapa are still buzzing, even as the Lagos State Government has now made efforts to clear the congestion.
Besides bribes, the fact that truck drivers have to pay a lot of taxes is also not good for business. Reports say that in addition to fees paid in the port, truck drivers are still required to pay the local Apapa government, transport unions and Lagos state dock landing fees, albeit under the Regulatory Authority Act. Port Authority of Nigeria, only the federal government can legislate regarding berths, berths, and cargo docking.
The Federal Government's decision to connect the Apapa Ports to the railway, which should have improved the situation at the ports, was undermined by arbitrary fees. According to the CEO of the Nigerian Railway Corporation, Philip Okhiria, the exorbitant amounts charged by operators to those choosing rail service have further undermined the Federal Government's efforts to clear the nose. Apapa.
In desperation, barge operations have now become commonplace with frustrated entrepreneurs now unloading trucks at private facilities in the Apapa area for an extra fee. This is certainly not the way to conduct international trade in the 21st century.
Sadly, shipping costs are not borne by the shipper or the retailer but are passed on to the consumer. The implication of the sharp increase in transportation costs in an import-dependent country like Nigeria is that commodity prices will increase, fueling inflation and leading to a decrease in purchasing power.
In its 2019 port infrastructure report, the World Economic Forum ranked Nigeria 122 out of 139 countries with a low score of 2.5 out of 7.0 even with least favorable countries. More favorable countries such as Zimbabwe, Zambia, Uganda, Burkina Faso, Angola and even neighboring Cameroon rank higher than Nigeria. With the African Continental Free Trade Agreement coming into effect, Nigeria will find it difficult to compete.
But not all hope is lost. According to the Nigerian Shippers Council, the digitization of ports, the implementation of e-Customs, the investment of more than $300 million in inland dry docks and the overhaul of the transport logistics system are steps that can reposition Nigeria. to get the most out of AfCFTA. More importantly, however, is the need to privatize the operation of ports and sell off existing ports in other states. There is no point in spending public money on repairing ports that have defied all government intervention. Some countries have left port operations to the private sector while the government plays a regulatory role. This is the way to go.
Tron
