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‘2016, The Worst Year For Port Operations’

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Container Shipping
  • Ship Owners Tagged 2016,  The Worst Year For Port Operations

With only a few days into 2017, maritime operators including seaport operators, clearing agents and all stakeholders are unanimous in their assessment that the outgoing year has been the most challenging and one that will linger in their mind for a long time to come.

They attributed these challenges to many of what they described as Federal Government’s unfavourable policies, a development that saw the seaports, which used to contribute a large chunk of Nigeria’s non-oil revenue becoming less active.

This left government almost financially stranded, with less capacity to invest in infrastructure, create more jobs, address security, including fighting insurgency, and funding other activities that define good governance.

Recent statistics from Nigerian Ports Authority (NPA), which governs and operates the nation’s ports showed that container traffic inward Nigerian ports (import) dropped to 6,831,348 tonnage as at September 2016, from 9,419,672 in 2015. Besides, the outward container (export) also dropped drastically from 2,263,594 tonnage in 2015 to 1,485,338 in September 2016.

Also, the number of vessels dropped to 11year lows and stood at 3,347 against 5,014 in 2015 and 5,333 in 2014.

The Guardian gathered that importation of raw materials has also dropped significantly, as importers argued that lack of access to foreign exchange and low patronage was killing their business.

Many of the terminal operators are groaning under poor handling of goods, while many of them are finding it difficult to meet their payment obligations to the Federal Government.

As such, opinions are varied regarding the effect of government’s policy pronouncements during this fiscal year, while hoping that 2017 will turn out to be much more fruitful, as captured below:

Reduce tariffs to bolster ports activities, urges STOAN

The Spokesperson for Seaport Terminal Operators Association of Nigeria (STOAN), Bolaji Akinola, while declaring that Year 2016 has been a very difficult year for port operations, told The Guardian that government needs to reduce tariffs to boost activities.

According to him, “The ports have dried up. Usually at this time of the year (December), it will be difficult to get into Apapa or come out of it. But go to Apapa now, the whole place is as free as ever. This is the peak season, yet there is no traffic. No cargo movement. Everywhere is dried up and the main reason like we have said severally is government’s unfavourable policies.”

Such unfavourable policy is also seen in the National Automotive Policy, which he said has wiped out vehicle cargo traffic at the ports completely and almost decimated the roll-on, roll-off, RORO terminals in the country.

Akinola said: “The hike in import duty of vehicles; hike in rice duty has take away the rice cargo traffic, that is why you have some terminals like ENL Terminal drying up overnight. It’s a terminal that used to be very boisterous and very active, providing jobs for many people.”

He argued that although the ban on importation of vehicles through the land borders will take effect from January 1, 2017, but it will not be effective, as it will lead to increase in smuggling.

He insisted, “The ban will not be effective without a corresponding slash in vehicles tariffs. I am not trying to scare anyone, but that is the truth of the matter. It will only lead to high rate of smuggling. The only way to check smuggling right now is to accompany that ban with a slash in tariff so that you bring it to the same level as what obtains in the ports of Cotonou and other countries in the sub-region. Otherwise smuggling will be heightened.

“I will give you a practical illustration. Look at rice, importation of rice through the land border has been banned, yet there is no scarcity of imported rice in Nigeria today. Those imported rice you see in the market did not come in through the ports. You can go to the ports and check; you will not see rice vessel there. So how do they come in? They are smuggled in. The same thing will happen to the vehicles, so that is why the only way out is to slash the tariff to 10 per cent that it was, so that it will be at par with other ports in the sub-region,” he said

For Akinola, the final nail on the coffin is the “ill-advised” Central Bank of Nigeria (CBN), the lender of last resort, restriction of 41 items from the official forex window.

As the New Year is ushered in, he urged the government to look into these policies and reverse them, especially the CBN’s policy and the hike in tariff of imported vehicles.
Ports upgrade is a necessity

For Master Mariner, Captain Adamu Audu Biu, the upgrade of the nation’s ports must take a centre stage in the coming year, saying that Nigeria must rise up and develop its ports facilities. He said this will enable the country to accommodate very large crude carriers (VLCCs) and ultra large crude carriers (ULCCs), which are the latest trend in the global market now, if its desire of becoming the maritime hub in West Africa would be realistic.

Biu said: “Our ports and their approaches were last upgraded in the late seventies and early eighties. One must commend the efforts of some of the terminal operators since the concessioning of the ports. The depth of water available in all our port approaches, jetties and berths need to be significantly improved. Same is the case with the structural integrity of our quay aprons,” he said.

Ship owners upbeat about 2017

President of the Ship Owners Association of Nigeria (SOAN), Greg Ogbeifun, while agreeing that the industry did not do too well in the outgoing year, expressed the hope for better performance in 2017.

In a chart with The Guardian, he insisted that the industry recorded some achievements in 2016, without giving further details, noting that the stakeholders’ forum organised by the Ministry of Transport, further brightened the hope for a better industry in 2017.

“I must say some salient challenges are still there. It’s one thing to come with good policy it is another thing to be able to implement it. If you don’t have more knowledgeable people in the right positions to implement the policies then you cannot achieve what you set out to achieve,” he said.

He appreciated the minister’s determination to resuscitate Nigerian flag flying ships to ply the nation’s waters with the attendant benefits of job creation and training activities for cadet officers.

“In the area of regulation, there is a lot to be done. I don’t think the regulatory agencies are doing much. The fundamental reason for that is that apart from the fact that people that are being appointed to certain positions don’t seem to be knowledgeable enough, there hasn’t been enough stakeholders’ engagement,” he said.

In 2017, the SOAN president said the government should review some of the extant laws and policies including taxes so as to increase the emergence of Nigerian fleets; while issues of human capacity development should be taken serious.

“We must look inward now to grow our ability to build maritime capacity, making use of the maritime institutions that we have in-country. We should stop going out looking for places in Malaysia, India or Philippines. Let us develop our own institutions to meet these standards and it can be done.

“The Maritime Academy, Oron, has a very strong and basic infrastructure that can be built upon, the software can be improved, employ the right calibre of teaching staff. Nigeria has no reason to be sending cadets out of this country to look for schools or ships, when we have thousands of them here in Nigeria.

“Also, Institute of Oceanography has many potential that has not been tapped, so, government should also look into that too. Government should listen to the ship owners, because we have a lot of ideas and we are doing the job.

NPA promises facelift for Apapa roads in 2017

The Managing Director, NPA, Hadiza Bala Usman has promised that the dilapidated port access roads will be fixed in the coming year, as the Federal Ministry of Power, Works and Housing, has incorporated some of the projects in the 2017 budget.

Expressing commitment to make the port access road motorable again, Usman said: “On the ports access road, we have given timelines and deadlines to the respective agencies. On the Wharf Road, we have concluded discussion with Sanford and Flour Mills on mechanism to fixing the road, taking into consideration the need for drainage. The final draft will be submitted to the Ministry of Power, Works and Housing in four weeks, whereby the Ministry will conclude on the framework in which the road will be built. The Ministry will communicate the details to the public when they are ready.

“We have also discussed extensively and gotten the Creek Road and two other roads within Apapa into the 2017 budget by the Ministry of Power, Works and Housing, and they will be constructed within that period.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Economy

IMF Queries FG Strategies On Fuel Subsidy, Unemployment, Inflation

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IMF - Investors King

The International Monetary Fund has raised the red flag over Nigeria’s resumption of petrol subsidy payments, describing it as injurious to the economy.

It also reiterated the importance of introducing a market-based fuel pricing mechanism and deployment of well-targeted social safety nets to cushion any adverse impact on the poor.

In a report produced after a virtual meeting with Nigerian authorities from June 1 to 8, the IMF also expressed concerns over the rising unemployment and inflation rates, even as it admitted that real Gross Domestic Product was recovering.

The IMF team, led by Jesmin Rahman, further hailed the Central Bank of Nigeria for its efforts at unifying the exchange rate by embracing needed reforms.

The Fund said: “Recent exchange rate measures are encouraging, and further reforms are needed to achieve a fully unified and market-clearing exchange rate.

“The resurfacing of fuel subsidies is concerning, particularly in the context of low revenue mobilisation.

“The Nigerian economy has started to gradually recover from the negative effects of the COVID-19 global pandemic. Following sharp output contractions in the second and third quarters, GDP growth turned positive in Q4 2020 and growth reached 0.5 percent (y/y) in Q1 2021, supported by agriculture and services sectors.

“Nevertheless, the employment level continues to fall dramatically and, together with other socio-economic indicators, is far below pre-pandemic levels. Inflation slightly decelerated in May but remained elevated at 17.9 percent, owing to high food price inflation. With the recovery in oil prices and remittance flows, the strong pressures on the balance of payments have somewhat abated, although imports are rebounding faster than exports and foreign investor appetite remains subdued resulting in continued FX shortage.

“The incipient recovery in economic activity is projected to take root and broaden among sectors, with GDP growth expected to reach 2.5 percent in 2021. Inflation is expected to remain elevated in 2021, but likely to decelerate in the second half of the year to reach about 15.5 percent, following the removal of border controls and the elimination of base effects from elevated food price levels.”

The IMF also recognised that tax revenue collections were gradually recovering but noted that with fuel subsidies resurfacing, additional spending for COVID-19 vaccines and to address security challenges, the fiscal deficit of the Consolidated Government is expected to remain elevated at 5.5 percent of GDP.

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Economy

Nigeria-South Africa Trade Hits $2.9bn

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Shipowners

The volume of trade between Nigeria and South Africa hit $2.9 billion last year with expectation of it rising further with the African Continental Free Trade Area (AfCFTA) agreement.

Nigeria’s Consul General, Malik Abdul, in a statement noted that Nigeria accounts for 64 per cent of South Africa’s trade in West Africa and is one of his country’s top three sources of crude oil.

He further added that in 2020, South Africa imported R35 billion ($2.48 billion) worth of goods, predominantly crude oil from Nigeria and exported R6 billion ($425milion) to Nigeria.

He stated: “South Africa is currently among the top 10 per cent of investors in Nigeria, globally and Nigeria is South Africa’s 10th biggest export market in Africa and thirty-second globally. Nigeria accounts for 64 per cent of South Africa’s trade with West Africa and is one of South Africa’s top three sources of crude oil.

“Also, Nigeria in 2020 was South Africa’s top import market in Africa and sixth globally, after China, Germany, USA, India and Saudi Arabia. Over the past year, South Africa imported $2.48 billion worth of goods predominantly crude oil from Nigeria and exported $425 million worth to Nigeria.”

Also, the consulate said his embassy issued a total of 10,341 passports to Nigerian citizens in South Africa between March 2020 and May 2021.

The consul general further said the Mission had 404 unclaimed passports, and advised all those whose passports were processed and pending from August 2020 to come for collection.

Abdul added that the consulate was working to clear all COVID-19 lockdown backlog of applications, urging members of the public to exercise patience while the mission was resolving the backlogs.

On the re-introduction of administrative fees and charges for lost passports, Abdul said that the step was taken to harmonise and standardise consular services following approval from the Ministry of Foreign Affairs, Abuja.

The Mission had increased the fees for lost passports from R1,500 to R2,000, and admin charges of R120 for data capturing.

“On this issue, the Mission could not unilaterally impose any charges without headquarters’ approval or consent.

“The admin fees of R120 pertains to all services rendered by the two Missions,” he said.
According to the Nigerian envoy, the decision was taken to remove disparities in all consular services, noting that visa fees have also been harmonised.

On penalty for lost passports, Abdul disclosed that 484 Nigerian passports were reported missing at the mission between August 2020 and May 2021 with request for re-issue.

Abdul said it was discovered that there were criminal undertones and immigration rules infractions associated with the ‘so-called’ lost passport declarations.

“In line with practice in other Missions, there was a need to impose fines to deter people from engaging in such infractions.

“At such an astronomical rate of loss declarations, the option will be to refer such losses to Nigeria for processing.

“This will save the booklet for genuine requests of re-issue and thereby reducing the backlog and pressure on the Mission,” the envoy said.

Abdul disclosed that the consulate had received a directive to embargo processing of lost passports pending further instructions from the headquarters.

The consul general then accused some Nigerian groups in South Africa of, “peddling lies and outright falsehoods” against the Mission and his person.

“These disgruntled elements have gone ahead to incite fellow Nigerians with intent to sabotage the Mission.

“Moreover, a lie and falsehoods often repeated amounts to a propaganda which can be misinterpreted by the gullible and undiscerning as truth,” he said.

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Economy

NNPC Engages Gas Producers to Improve Power Supply

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Electricity - Investors King

The Nigerian National Petroleum Corporation (NNPC) has started engaging gas producers across the country in an effort to boost gas supply to power generation companies (Gencos) and subsequently improve electricity supply.

Mr. Yusuf Usman, the Chief Operating Officer, Gas and Power, NNPC, disclosed this in Lagos during his tour of Egbin Power Plc facility on Monday.

Usman, who responded to concerns raised by the Chairman of Egbin Power Plc, Mr. Temitope Shonubi, said the company’s concern on gas supply and transmission restrictions had been noted, adding that the corporation would support it to ensure constant power supply.

I have listened to all the concerns you raised. An area of concern to me is when you talked about the gas constraints. We are going to support you to make sure that the power supply is steady. We are having a session with gas suppliers in this regard.

“I am aware that works are ongoing in this regard to ensure that all the power we generate is safely evacuated,” Usman said.

Usman, however, said he was impressed by the level of progress being recorded by Egbin, noting that the effort of the company’s management to effect turnaround maintenance at the company through overhaul of the entire system, was commendable.

Usman added: “The visit has been an eye opener for me. We have seen turbines that have been running for over 40 years. We have seen efforts being made by Egbin management to effect a turnaround at the plant through overhaul of the entire system.

“We have also seen the support you have been given to the youths through employment and capacity development opportunities.”

Shonubi, in his remarks, said Egbin Power was planning to increase power generation by 1,900 megawatt.

Shonubi said: “Egbin has 1,320MW capacity. As at the time we took over, the plant was generating 300MW which is abysmal 22 per cent. As at today, our generation capacity has surged and we do 89 per cent.

“We have reached the highest peak of 970MW and we are working hard to ensure sustainability of this feat.

“The 970MW we hit is the highest recorded this year and based on our core value of sustainability, we are working round the clock to make sure that we sustain the gains, which we have made.”

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