By Steve Agbota, [email protected]
It was a mixed year for stakeholders in maritime industry in 2021. The year was described as one of the toughest driven by recession, high rate of exchange rate and the COVID-19 with its various variants, which hampered the world economy.
In the beginning of the year 2021, industry stakeholders anticipated many expectations but as the year wound down, delivery could not meet expectations as the industry recorded abysmal results.
The nation’s maritime sector was still bedeviled with several other challenges including traffic gridlock, port congestion and high cost of doing business among others, all of which impacted both stakeholders in more ways than one.
For instance, the ports continue to contend with obsolete infrastructure, including roads, rail system, quay, buildings, equipment and yards and remained heavily coupled with congestion and high level of insecurity and pilferage. Even the much talked about 48-hour cargo clearance is a failed system.
As the year 2022 settles in, stakeholders, especially the shippers and Customs brokers/freight forwarders have called for creation of Ministry of Maritime Affairs, provision of palliatives, National Transport Commission (NTC), favourable trade policies among other things that will bring development into the industry.
Creation of maritime ministry
Following the huge potential that the maritime industry holds, stakeholders have on different fora called on the National Assembly to champion a complete reform of the maritime sector by sponsoring and enacting a bill that will lead to the creation of Ministry of Maritime Industry (MoMI).
When created, the stakeholders said the ministry, would assist the federal government to restore the lost glory of shipping and maritime sector of the economy.
As the year 2022 settles, the industry stakeholders once again reminded members of the National Assembly to impress it on the federal government to create a special ministry for the maritime sector and introduce other reforms that will bring about efficiency and productivity at the nation’s seaports.
Speaking with Daily Sun, the Vice President, Association of Nigerian Licensed Customs Agents (ANLCA), Prince Kayode Farinto, said that government should live up to its responsibilities, be serious about the maritime sector and instill discipline in the sector.
He said: “Creating the maritime ministry is very paramount now so that we will be able to exploit all the areas that have not been harnessed. Government should look inward to ensure that this is achievable for the growth of the industry. We are expecting more and so many things in this year,”.
However, a shipper, Mr. Jude Okoro, said government must consider creation of maritime ministry, just like the aviation sector, saying that the ministry must be headed by someone who understands the sector inside out and not a politician with no knowledge of the sector.
He said the creation of the maritime ministry would help to correct the anomalies in the sector, saying the ministry will take care of both shipping companies, agents, terminals and others as the sector would no longer be under the Ministry of Transport.
National Transport Commission
The National Transport Commission (NTC) Bill, which was sponsored about 14 years ago, is yet to come to fruition. In 2018, which was exactly 10 years the bill was sponsored, the National Assembly worked on the bill sent it to President Muhammadu Buhari, for assent but Buhari rejected it and sent it back.
Buhari rejected the bill on three grounds including the removal of safety issues because the bill is purely economic regulation.
Secondly, the President also said that the royalty to be paid to the commission as source of funds, which was pegged at 10 per cent should be reduced to five per cent.
Thirdly, Buhari also asked the National Assembly to look at the freight stabilisation fee, which was put at three per cent to be reduced to one per cent just like it is in the Nigerian Shippers Council (NSC) Act.
One of the experts in the industry then said that all the grey areas in the bill have been weeded off, and the bill would soon be transmitted to Mr. President again for signing. But since then, nothing has been said or heard about signing the bill soon.
However, stakeholders have called on the National Assembly and President Buhari to workout the modalities and sign the bill this year because the danger in delaying assent to the bill creates uncertainty in the industry.
Vice President of (ANLCA), Prince Kayode Farinto said, “the issue of National Transport Commission (NTC) should be a reality this year so that we will be able to achieve a lot in the industry.”
Importers seek favourable trade policies
Importers under the aegis of Shippers Association of Lagos (SAL) are soliciting for a more conducive trade environment in 2022.
President, Shippers Association of Lagos (SAL), Rev. Jonathan Nicole, said the quest for a more conducive trade environment to the lingering effects of agitations, lawlessness and other negative consequences experienced in 2021. He called on the port economic regulator to be more proactive in curtailing and eliminating the root causes of maritime backwardness.
Nicole noted that the restrictions on foreign exchange would be counterproductive, as a lot of industries would be grossly affected by the policy, saying import trade will suffer due to foreign exchange restrictions.
He noted that importers could hardly pay freight charges, as the approved window was $5,000 limit for 30 days.
“Freight above $5,000 will be held up until freight charges have been fully prepaid upfront. Goods will attract storage charges abroad for as long as the freight is pending and this type of restriction is counterproductive.
“However, it is encouraging that President Buhari promised to provide foreign exchange for industries and manufactures in 2022 because of the importance of local production of essential materials and for exports,” he said.
Nicole noted that the other major challenge was that 82 per cent of the country agro-allied products are either seized or rejected by EU countries, reasons being that they are illegally exported without certification of government agencies.
“82 per cent of export cargo is enormous. With this in view, it might grossly affect our farmers directly or indirectly without export proceeds from the receivers abroad,” he said.
Nicole said that to have a good trading environment, shippers expect the Nigeria Customs Service amendment of CEMA to address the current realities in the World Trade Agreements. No more threats to Importers.
He said that they were seeking peaceful co-existence in the maritime sectors, urging shipping lines and terminal operators to induce development of the maritime systems not just increasing costs as a major target.
“We expect a reduction in the cost of doing business in Nigeria and encourage entrepreneurship through direct investments from proceeds from our imports. The security of our waterways must be guaranteed. Fishing vessels should be protected to enable Nigerians supply fish into our various markets. This is local content.
“The Gulf of Guinea has to be protected from pirates. Nigerian waters should be safe enough for ourselves as stakeholders in Nigeria,” he said.
Provision of palliatives to cushion effects of COVID-19
Due to effects of COVID-19, governments in other maritime nations are providing palliatives for the operators, including importers in the maritime sector.
However, stakeholders want such measure to be replicated in the nation’s maritime sector even as they now called on the Federal Government to save Nigerian importers from going bankrupt by providing palliatives for the sector amid COVID-19.
Presently, importation is being drastically dropped by 60 per cent due to rising exchange rate, dollar scarcity, and continuous increase in Customs duty, policy inconsistency and shoddy implementation.
On need for palliatives, stakeholders said the Central Bank of Nigeria (CBN), needs to lead the government in coming up with a better intervention fund like they have done in the aviation, manufacturing and agriculture sectors to reposition the industry after the dust surrounding the Coronavirus pandemic must have settled down.
Nigeria must emulate countries like Britain, Rome, America, Australia, Canada, Turkey, Norway, Belgium, Greece, Singapore and India on how best to use the sea to boost the economy.
“We want Federal Government to look at the issue of palliative because omicron has actually spoilt the world economy. And Federal Government should not give Customs target because it is retrogressive, it is not really helping the nation’s economy, optimistic that Nigeria can generate more money if Customs is not given target. We are expecting more and so many things,” Farinto said.