March 1, 2024

Nigeria loses $14.2bn to port challenges


Nigeria loses $14.2bn to port challenges

Nigeria loses $14.2bn to port challenges

Ayoola Olaitan, Lagos 

In spite of ease of doing business policy of the current administration,  recently  disclosed that the Nigerian government has lost about $14.2 billion  on account of redtape at the nation’s ports.

According to ACSC, the challenges at the ports leading to these losses involved slow cargo delivery, delays, cargo diversions and high demurrage charges.

In a communique issued at its maiden supply chain round table, the group  noted that  bottlenecks  at the ports  have also  led to loss of revenues by the Nigeria Customs Service (NCS).

ACSC decried the situation where  the congestion has become a norm in all the ports and container terminals across the country. 

Speaking on the theme:  ‘Port Congestion: Implications for Nigeria’s Competitiveness,’ the group revealed that the  financial cost of accumulated delays of trucks has constituted about 40 per cent of the total cost borne at the ports.

It further stated that the ENDSARS protest of October 20, 2020, led to backlog of trucks and import -laden containers at the Tincan port.

The communique noted that the problems had made the cost of moving one 20 foot equivalent unit of container from Tincan Port to Mile-2 by truck  skyrocket to N1.5million.

Other challenges at the port as noted by  the group include: indiscipline among truckers, weak technology application, non-implementation of 24-hour port operations, manual cargo examination by Customs and low-capacity utilisation by terminals.

The group listed other challenges to include  congestion emanating from public holidays, short working hours, congestion of trucks within the port and cargo congestion at terminal due to trade imbalance.

 According to the group, congestion of cargoes at storage yards and sheds, vessel congestion as a result of  inadequate port facilities, too many customs desk and 100 per cent physical examination of goods as against international best practice, including lack of scanners, corrupt officials, dishonest importers and  clearing agents and corrupt port and security officials are other impediments.

It stressed that the Lagos logistics ring spanning through Apapa-Iganmu-Orile-Mile 2-Tincan-Apapa has capacity to handle only 2,400 trucks and tankers daily, instead of the 7,000 trucks moving around the ring on a daily.

On the implications of congestion at the port on the economy and business environment, the operators said that the financial cost of accumulated delays was unfair, saying that the port problems are caused by  importers, who bear the brunt of inefficiencies, high shipping and terminal charges, high insurance premium on vessels and cargo rollover.

It stated further that the astronomical increase in transport cost has paralysed industrial activity around Apapa by lowering capacity utilisation and incessant inventory delays.

The group noted that the country has lost its investment appeal in the global community because of poor ease of doing business ranking, and loss of boom in the economy to neighbouring countries.

Despite the government’s ease of doing business initiatives, most container owners spend an average of  10 to 20 days to clear a container from Apapa/Tincan ports , and another 20 days to move the container out of the port.

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