Shipping experts are of the view that Nigeria urgently needs to build a brand new deep seaport in Lagos, among other reforms that will reduce costs and corruption in the ports system, as the only way to beat other West and Central African countries in the struggle for a load centre in the region, writes Francis Ugwoke
By her population and capacity for trade, Nigeria ought to be the load centre in West Africa. In shipping terms, a load centre is simply a trans-shipment base for cargo vessels of all types and sizes. It is simply a point of convergence for vessels trading in a particular region. Now, instead of bigger vessels having to take cargo to every port in the region, such vessels can simply deliver such cargoes to a trans-shipment base from where a small vessel takes the same cargo for final delivery to other neighbouring ports.
The quest for a load centre is over 16 years when the World Bank first sponsored experts to carry out a study in West Africa to find out which of the countries in the region should be chosen. After that report which did not favour Nigeria even with her tremendous size of trade, no particular country has been named so far by the relevant international agencies and ship-owners as a trans-shipment base in the West African region. But the first report had cast aspersion on the present Lagos ports as likely load centre for obvious reasons.
The issue of high cost of doing business, which is a combination of many factors, was identified. High level of corruption in the port system, including multiplicity of agencies and agents of government, trying to extort importers and ship-owners , was raised. The other issue was the size of the ports and facilities, including the shallow level of the draught. So far, the fears of the experts in choosing Nigeria as trans-shipment base appear to have been confirmed. The roads leading to the Lagos ports have in the past 10 or more years been in a terrible state. Government has failed year after year to address the issue. Life and business in Apapa have been nightmarish for many.
Although, a lot of reforms have been carried out, including concessioning of the ports, not much has been achieved in terms of improving the facilities. 24-hour cargo delivery which every administration desired has failed. Ships come to the ports and spend close to two weeks waiting to be berthed before the cargos can be discharged. And the practical way to confirm this is to study the shipping position released each day by the Nigerian Ports Authority (NPA). Some ships can actually be on the high sea waiting to be berthed for more than two weeks. Many ships coming with petroleum products are the worst hit. In the past, some of such ships simply discharged midstream and sail after greasing a lot of palms. The Ministry of Transport during the time of Chief Ojo Madueke had on learning about this economic fraud raised alarm, and stopped the scam.
Now, the situation can no longer be the same with terminal handling under private firms who will monitor everything to ensure no revenue is lost. But the terminal operators are yet to improve on a lot of facilities that will place Nigeria in a position to compete for the position of a load centre with other neighbouring countries. Surprisingly, the NPA as a landlord cannot do much as it is sometime accused even by its own Minister of failing to live up to expectation in its statutory responsibilities. The poor equipment profile by many terminal operators is a nightmare for many importers and freight forwarders.
Many of them still spend close to two weeks waiting for their containers to be positioned for examination. It is this particular scenario that the Nigerian Shippers’ Council (NSC) as the Ports Economic Regulator is trying to correct, so that if the terminal operator or the shipping company is responsible for the delay in clearing any consignment resulting in demurrage, the importer is exempted from this.
Stakeholders who are passionate on Nigeria becoming the hub are of the view that there is the need to study modern trends in other international ports and replicate them in Nigeria as the only option to position Nigeria as a load trade centre in West Africa.
Countries Aspiring to be Load Centres in Africa
The current situation in the shipping industry is such that every country wants to be a load centre in West and Central Africa. This explains the rush to build giant deep seaports across the West and Central Africa. So far, Togo, Cote d’Ivoire, Ghana and Cotonou are all into the project of having an internationally accepted deep seaport. Although, these countries do not have the size of market like Nigeria, the President, National Council of Managing Directors of Customs Agents (NCMDCA), Mr Lucky Amiwero, said all these countries are targeting cargos coming to Nigeria. Noting that two load centres are needed in both West and Central African region, Amiwero disclosed that so far, many of these countries are building deep seaports that have draught of at least between 16 and 18 meters. Amiwero said that all these countries want is to siphon cargos coming to Nigeria to their own ports after the completion of their deep seaport projects. He identified Ghana which has a natural deep seaport as a big threat to Nigeria.
New Deep Seaport in Lagos as Trans-shipment Base
Amiwero was of the view that for Nigeria to be a trans-shipment base, there cannot be any other place other than Lagos. But he cautioned that the current seaports are simply out of consideration since they are River ports with limited draught. Although Nigeria is currently building seaports in Lekki and Ibaka, Akwa Ibom State, Amiwero said the biggest problem for these deep seaports and others outside Lagos is their location. He believes that any deep seaport outside Lagos is doomed to fail. Ruling out the Lekki Deep Seaport and the one planned for Badagry, he called on federal government to consider another deep seaport in Lagos where the draught level would be between 16 and 19 meters where modern vessels coming with 15,000 to 19,000 teus can berth. So far, vessels coming to Lagos ports are those with 2,000 teus with the highest so far being the vessel that came with 4,000 teus. The Lagos ports are 13 meters deep and can certainly not take modern vessels with capacity for 15,000 teus. On the particular area in Lagos where the deep seaport should be built, Amiwero, a renowned shipping expert, said that the federal government needs to carry out a feasibility study to identify a suitable place. He described as laughable the deep seaports being developed outside Lagos, adding that what government and other investors in these projects should ask is the viability of these ports.
Reform of Customs Procedure
As part of the efforts to have a transshipment base, Amiwero opined that every effort should also be made to reform the Nigeria Customs Service (NCS). Describing the current procedures as not in line with the law, he claimed what the Customs does is simply to impose duties through Debit Notes (DNs) on importers which they must pay or they lose their cargos.
For Nigeria to be a load centre, a shipping expert, Mr Lawrence Metuh, was of the view that Nigeria must study what happens in other advanced countries, adding that no seaport can overcome congestion without a good rail system. He argued that for Nigeria to be considered as a load centre, government must be ready to link the Lagos ports with rail.
Fight against Corruption, Illegalities
Metuh also advised government that while building a load centre, concerted efforts must be made to check all forms of corruption and illegality in the ports. He added that what makes the neighbouring ports thick needs to be studied too. Describing Nigerian ports as very expensive, Metuh was of the view that government must pursue efficiency to the highest level. According to him, a new customs service is needed to stamp out all forms of corruption in the system.
Accusing some customs officers of induced corruption, he said that unscrupulous importers have continued to engage in all forms of trade malpractice because there are some willing officers who collect settlement to keep blind eyes to the appropriate punishment on trade crime. Once appropriate punishment is meted out, this will force the importers and their customs brokers to retrace their steps on corrupt practices, he added. When this is achieved, he said, it will increase revenue generation from the system.
Metuh equally called on the government to move a step ahead in its support for the Ports Economic Regulator by issuing a statement which condemns attempt by terminal operators and shipping companies from stifling regulation in the system. He added that equally important is the need to ensure that both the terminal operators improve on their cargo equipment at the ports to reduce the time spent waiting for containers to be positioned for examination. He believes that when the current high cost of doing business is reduced, it will open the Lagos ports to the admiration of not just Nigerian importers but also the international shipping community as the choice of a transshipment base.