24 May 2019

Nigeria: How Nigeria Lost Cargo Transhipment Hub Status to Neighbouring Countries

Customs agents in the country have identified inefficiency in the system and low draught level of the Nigerian ports as the main reason why the country lost the transhipment hub status to other West African countries.

The agents in a letter to President Muhammadu Buhari, dated May 19, 2019, that was obtained yesterday, stressed that except there was a change in infrastructure rehabilitation, Nigeria would continue to lose cargoes to neighbouring countries which have deep seaports and better facilities.

National President of the National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), the umbrella body of customs agents in the country, Mr. Lucky Amiwero, in the letter, said Nigerian ports cannot accommodate mega ships with 8000-20000 TEUs, arguing that this was against the trend in neighbouring ports.

He also called on the federal government to address the unwholesome practices of manipulated delays by providers of shipping services and other government agencies which have led to high demurrage, rent and high transactional costs.

Describing such practices as inimical to the efficiency of the port system, Amiwero said such issues in Nigerian ports need to be addressed for the sake of national economy.

"There is the need to re-claim our cargo from neighbouring West African countries that is now hub for Nigeria cargos, by working out mechanism for a better developed regional hub to consolidate on our destination of Nigerian cargo that has been siphoned by regional ports."

He decried other problems linked specifically to the Nigeria Customs Service (NCS) as multiple alerts as inimical to trade facilitation.

"The process of multiple alerts should be harmonised and comply with International best practice on a One-stop-Shop as Contained in WCO revised Kyoto Convention that compel contracting parties to harmonise, Simplify their procedure to remove complexities. The Federal operation Unit (FOU) should be streamlined and concentrate on anti-smuggling activities 40 miles radius from the Port in line with its formation.

"All import process should be conducted in the Port as one-stop-shop process and eliminate the double examination, delays demurrage and the off-loading of goods at the federal operation, which is additional cost to the Importer/Customs Agents.

"The activities of multiple checks duplicate procedure and increase cost which contravene WCO Kyoto convention, IMO FAL Convention and WCO SAFEframe Work of Standard to Secure and Facilitate Global Trade, it increases cost, duplicate procedure and is a disincentive to Foreign Direct Investment (FDI) on complying with international conventions and protocol which we are contracting and the concern of our international trading partners."

He said the neighbouring ports have already positioned their ports as "Millennium Ports, Preferred, Transhipment or Load centre," adding that most West African ports built their ports to accommodate Nigerian bound cargo knowing about the country's poor infrastructure.

Amiwero identified the neighbouring ports which have either completed their deep sea projects or near completion as Cotonou, Benin Republic, Lome, Togo, Accra, Ghana and Cameroun.

He pointed out that while Nigerian ports draught was between eight and 13 meters which cannot accommodate mega ships, the least draught in other neighbouring ports is 15meters.

The custom agents' boss gave a breakdown of the draught of the neighbouring ports as Lome - 15.5meters, Cotonou - 15 meters, Ghana 19 meters while Cameroun has 16 meters draught level.

He added that the scenario was that most Nigeria bound goods by mega ships were transhipped from these countries with smaller vessels.

He called on the federal government to wake up by designing the concept of a Deep sea/ Transhipment centre to accommodate large E-Class vessels/mega ships of 8000- 20000 TEUs, that are currently demanded regionally and globally.

According to him, this was the only solution to the diversion of goods to neighbouring ports.

He advised that in with international best practices, Nigeria must design the following: (a) "A National Guarantee system to cover the payment of import duty taxes at the time of transit; (b) Custom Seal that ensure the physical integrity of the goods while in transit, making sure that the goods start and exit the transit in its original state; (c) Implement electronic tracking system enabling Customs to track and locate transit vehicles and guide intervention force including Customs staff; (d) A document system to enable transit document issued at the start of Transit journey to be accepted by transport and Custom authority along transit."

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