Dwindling Cargoes & Policy Threaten Govt’s Revenue at Seaports

Dwindling of importation of cargoes into the country would impact negatively on the federal government’s revenue generation at the seaports due to the government policy on importation, high exchange rate and poor port access roads.

LEADERSHIP findings revealed that activities at the seaports are at the lowest ebb as cargo throughputs have fallen below the Guaranteed Minimum Tonnage (GMT).

Investigations showed that although government revenue at the seaports had been dwindling from 84.9 million tonnes in 2014 to 77.3 million tonnes in 2015 and down to paltry 53.2 million tonnes in 2016, experts believed it could be worse this year.

Data from the National Bureau of Statistics (NBS) show that the total number of cargoes in and out of all the ports from 84,900,588 in 2014 dropped to 78,322,558 and 70,681,028 in 2015 and 2016 respectively.

Also, this was evident as vessels call at Western ports – Apapa and Tin-Can Island dropped from 3,195 in 2014 to 3,173 and 2,511 in 2015 and 2016 respectively.

However, the Customs revenue also dropped from N977.09billion and N904billion in 2014 and 2015 to 898billion in 2016.

According to the President of Manufacturers Association of Nigeria (MAN), Dr. Frank Udemba Jacobs, some items restricted from the Forex Market were raw materials used by his members.

He said, “The association has done an analysis on the banned items and we broke the 41 items into 110 and of the 110, 75 are raw materials for our members. It is these 75 items we ask the Federal Government to remove from the list so that our members can source forex.”

Findings also revealed that high cost of doing business of the Nigerian Ports have fueled diversion of cargoes to neigbouring ports of Benin Republic, Togo and Ghana.

Government however lost whopping revenue in charges, Customs revenue sea protection levy that would have been paid to Nigerian Maritime Administration and Safety Agency (NIMASA) and compulsory pilotage levy in foreign currency that would have been accrued to Nigerian Ports Authority (NPA)

Recounting the unfriendly nature of Nigerian Ports, the Executive Secretary, Nigerian Shippers’ Council (NSC), Barr Hassan Bello said performance indicators set Nigerian ports as the most expensive in the sub-region.

Giving the analysis, Bello said cargo dwell time of vessels at Nigerian ports is 14 days while ports of neighboring countries have a lesser dwell time.

He also pointed out demurrage free period, which he said Nigeria has lowest among its contemporaries in Africa.

“It takes three days to clear cargo from Lome, seven days in Cotonou, four days in Durban in South Africa and five days to clear cargo out of Kenyan ports. The free days given to importers before accumulating demurrage in Nigeria is five days while it is 10 days in Benin Republic. It takes 10 days in Cameroon and China to enjoy free period before the accumulation of demurrage starts to count.”

Bello said that what importers needed from the port were the availability of service and common users’ information, safety of cargo and right pricing.

However, current indices had shown that government revenue would dip further in 2017.

For instance, major commands like the Apapa and Tin Can Island and PTML commands are given a monthly target of N32billion, N29billion and N6.9billion respectively as their monthly revenue target

The Apapa Area Command of Nigeria Customs collected the sum of N77.4 billion as revenue in the first quarter of 2017 as against its quarterly target of N96billion. This amount represents a shortfall of N19.1 billion.

A breakdown of the revenue generated by the command within the first quarter of 2017 showed that in January, N25.9billion was collected; in February, N24.7billion and March N26.7billion.

Speaking on the revenue profile, the command Public Relations Officer, Nkiruka Nwala said the command could not meet its target due to the general economic downturn, which has stifled importation.

Also, the Tin-Can Island command in its first quarter of 2017 generated N61.8billion against its revenue target of N87billion, which represents a shortfall of N25.2billion.