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Port charges scam: Shipping firms, others collect illegal charges

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It is no longer news that Nigerian ports are reported to be the most expensive ports in the world, but what has remained confounding to many is persistent denial by the main operators accused of being responsible for the high port tariff, terminal operators and the shipping companies, that they are not responsible.

 

They terminal operators had rather accused the Nigerian Customs Service and Customs Brokers and Freight Forwarders of being responsible for the illigalities in the ports.

 

The Spokesman of Seaport Terminal Operators Association of Nigeria (STOAN), Mr. Bolaji Akinola had at any opportunity passed the buck of high port costs on to the freight forwarders who he alleged ripped off their clients (importers).

 

This is even as human rights lawyer, Dr. Olisa Agbakoba, (SAN) had on behalf of the Nigerian Shippers Council, challenged the terminal operators at the Federal High Court, Ikoyi presided over by Justice I.N Buba over alleged continued collection of some shipping charges in disobedience to the court’s judgment granted in favour of the Nigerian Shippers’ Council (NSC) as the Ports Economic Regulator.

 

Agbakoba is seeking an order of the court to compel the service providers to refund the sum of N150 billion as the money they have collected since the Ports Regulator issued a notice barring them from collecting such charges.

 

He said if the “arbitrary charges is stopped, it will stabilise prices and ensure more cargo throughput to Nigerian Ports and stem the yearly loss of over N2 trillion potential revenue to the Nigerian government caused by excessive and illegal port charges by terminal operators.”

 

The buck passing has continued as the President of the National Council of Managing Directors of Licensed Customs Agent, Mr. Lucky Aiyes Amiwero told Sunday Telegraph that pre-shipment charges collected from importers off-shore is another major cause of the high port charges in the Nigerian ports, adding that high port charges will make made- in-Nigeria goods uncompetitive.

 

“Most of the charges are arbitrary, duplicated and have no law backing them. We have the highest storage charges in the world; N7, 000 per day for 20 feet container, and N14, 000 for 40 feet container. Even with this situation the operators (terminal operators and shipping companies) do not have adequate equipment. This makes our services very expansive and our finished goods uncompetitive in the sub region.

 

“This situation is very critical and demands urgent government attention because, our country will become a dumping ground for goods made in Ivory Coast and Ghana and other West African countries because there is an ECOWAS agreement that allows free movement of goods and service within the region. Our own good cannot compete with that of other West African countries because of high port charges,” he explained.

 

Former President of National Association of Government Approved Freight Forwarders (NAGAFF) Dr Eugene Nweke has described what is going in the Nigerian ports as the machinations of a Transnational Corporations. “You know that APM Terminals Apapa Limited and Maerskline belong to one family. So they deliberately acquire adequate equipment to enable them discharge the consignments professionally and in time. The delay which runs to 20 or more days translate to N7, 000 multiply by 20 days for 20 feet containers or N14, 000 multiply by 20 days for 40 feet container. This is just storage charge. While the goods are being delayed at the ports, the ship is delayed at the anchorage and demurrage is accumulating. The importer is paying for the inefficient of APMT,” he said.

 

The Murtala Muhammed Airport Chapter of Chairman of National Association of Government Freight Forwarders (NAGAFF), Mr. Segun Musa also blamed Customs for the high port tariff imposed on importers.

 

But Sunday Telegraph findings show that the alleged corrupt activities which has made Nigerian ports the most expensive in the world is like a ring or cartel that have all the players in the game, every player only interested in their own selfish aggrandisement; either as an organisation or individual.

 

The ring starts with the shipping lines which are mainly owned by foreigners. And since Nigeria is an import-dependent country, importers are left at the mercy of foreign-owned shipping lines. This is what they do: “The moment the ship bearing your goods berths, the shipping line immediately sends you a mail that you must clear your goods within three days. They expect you to clear within three days; meanwhile, it will typically take four to seven days for your container to be moved from the ship to the block stacking, where all containers are first kept. On a ship, you may have 1,000 containers on it. So, imagine if your container was among the last 50, it won’t be brought down until about four days, because of inadequate cargo handling plants, it will take about two, three more days before it will get to the block stacking. That means your container will be on the ship when your three-day notice starts reading.

 

“The process from the ship to exit takes a minimum of 20 days period that means 20 multiplied by N7, 000 for 20 feet container and 20 multiplies by N11, 000 for 40 feet container. Meanwhile, while the storage charges are counting demurrages for the ships are counting at the anchorage.

 

The Nigeria Customs Service (NCS) classifies incoming goods into four: green, blue, yellow and red. Green means the goods are well-trusted and therefore require no examination. But goods imported from suspicious countries, such as Indonesia and the South American countries where drug peddling is high, are classified as ‘red’ meaning it requires physical examination. So the importer not only pays Customs for physically examining the goods, but also the shipping agency for demurrage while awaiting the date of examination.

 

“Customs may tell you that your container is on red alert and that your physical examination will not take place for another three days, because there are thousands of containers to be examined.

 

“You will need to pay Customs to come and open your container and examine it they have made  this corruption legal. In total payment was N60, 000, while we paid N24, 000 for the physical examination itself. Meanwhile, shipping lines do not charge you day by day; they charge you upfront, a minimum of four days.

 

“Now, when it’s time for your container to be opened, the Customs officers will tell you to open, even though they know that you actually cannot open the container yourself. Therefore, you are forced to engage the services of their labourers. But before the labourers lift a finger, they demand money – and you have to pay them. Meanwhile, this was one of the things you already paid Customs for.

 

“So, what happens when the container has been opened? Representatives of all agencies go in to check, and each of them collects N1, 000 “just for looking. The agencies which collect N1,000 each, includes; the Nigeria Police Force (NPF), Nigeria Customs Service, Department of State Service (DSS), National Agency for Food Drugs Administration and Control (NAFDAC), Nigerian Ports Authority (NPA),National Drug Law Enforcement Agency (NDLEA), and Nigeria Agricultural Quarantine Services (NAQS).

 

According to Amiwero, the Nigeria Customs Service needs urgent as regards its processes and procedure.

 

“The agency lacks incompetence in processes and procedure. That is why a consignment that has free duty could be given 20 per cent duty like in the case of the relief materials by the donor agencies,” he said. He said that after paying for the arbitrary charges, the goods can no longer compete in the market. And that is why people risk their lives to smuggle goods across the borders.

 

‘For there to be a change, there must be a review of the concession agreement now that we have a new regime in place. Before they had godfathers in government that was why they were untouchable and they could block Nigerian Shippers’ Council’s effort to regulate them,” he added.

 

Meanwhile, the Executive Secretary/CEO, Nigerian Shippers’ Council, Mr. Hassan Bello says the agency is alive to its task as the Commercial Regulator. He says the Council is already in Court with Terminal Operators on the regulation of port charges. “The case is coming up soon,” he said.

 

Also, the General Manager Corporate & Strategic Communication, Nigerian Ports Authority, Abdullahi Goje said NPA has not been found wanting in its role as the landlord and technical regulator of the ports.

 

“The Terminal Operators may not have met 100 per cent of our expectation but there have been a remarkable improvement in efficiency in cargo handling since the ports were concessioned in 2006,” he said.

 

However, reacting Joseph Attah, National Public Relations Officer (PRO), Nigeria Customs Service, said the agency does not collect illegal charges. He said the Service in fulfilling its statutory functions among which are revenue collections, enforcing government fiscal policies at the ports and anti-smuggling operations; it ensures trade facilitation to achieve the government policy on ease of doing business at the ports.

 

 

 

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2 Comments

2 Comments

  1. Darren

    April 16, 2018 at 4:18 am

    Before making false claims, I urge you to check the information provided.

    Storage charges in Australia will cost approximately USD250/20FT for 1 day of wharf storage, so this makes the Nigerian storage charges seem very cheap in comparison and not “The highest storage charges in the world”.

    Good facts make for good reading, bad facts simply make you question the entire article.

  2. Pingback: Port charges scam: Shipping firms, others collect illegal charges | Law Firms in the News

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Tincan Customs chief to implement 48-hour cargo clearance

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Customs Area Controller (CAC), Tin Can Island Port Command, Musa Baba Abdullahi has reiterated the command’s unshaken commitment to achieve 48hour cargo clearance from the port without compromising revenue collection and national security.

The customs chief said efforts are being put in place to maximise benefits of technology and build the command’s manpower to meet with the growing challenges of modern trade.

 

While addressing maritime journalists in his Apapa office, Musa identified swift dispute resolution as a key component to facilitate trade. He said the command has put in place a faster mechanism to address any area of disagreement in interpretations of guidelines for duty collection and other related matters.

 

He added that a committee put in place for disputes resolution meets as soon as any dispute arises to avoid port users incurring costs caused as a result of delays in resolving such disputes.

 

According to him, there is a quicker process of bringing issues to his attention and contacting the headquarters where necessary to avoid delays associated with such disagreements. He said the command has stepped up efforts at keeping officers and relevant stakeholders abreast with the use of technology for the purpose of customs operations.

 

The Controller disclosed that senior officers and licensed customs agents are being trained at the command’s Information Communication Technology (ICT) Centre on the latest Nigeria Customs Information System (NICIS 2) in batches.

 

Musa said the training and retraining of customs personnel and stakeholders will continue with a view to getting as many persons as possible knowledgeable in the workings of the system.

 

He also stressed the need for all stakeholders to increase their levels of compliance with rules and improve on their knowledge as ways of achieving seamless flow of trade thereby achieving faster clearance of goods from the port.

The Controller also advised the maritime media to uphold the ethics of their profession and be fair and truthful in all they do.

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Early rainfall to boost Nigeria’s cocoa mid-crop

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Nigeria’s mid-crop cocoa output for 2017/18 could rise by 15 per cent from last season, helped by a mix of rainfall and sunshine in the main growing regions which has helped the trees, President of Cocoa Association of Nigeria (CAN) Sayina Riman said in a recent interview with Bloomberg.

 

Drought cut last season’s mid-crop harvest by 40 per cent. The dry weather continued into the main crop of the new season.

 

Riman said the drought affected the trees, reducing output of between 300,000 tonnes and 320,000 tonnes projected at the beginning of the 2017/18 season.

 

He said that early rains in March and April have helped boost the mid-crop, which could see the season’s output close at around 290,000.
Riman farms on a 170 hectare cocoa plantation in Nigeria’s second-biggest region of Cross Rivers.

 

The cocoa season in Nigeria runs from October to September, with an October-to-February main crop and a smaller light or mid-crop that begins in April or May and runs through September.

 

“Despite the drought of last year which affected cocoa we believe we would be close to 290,000 tonnes for 2017/18 season,” Riman told Reuters.

 

The International Cocoa Organisation (ICCO), however, gives much lower estimates of Nigerian cocoa output. It forecast last season’s production at 225,000 tonnes.

 

Riman did not give a reason for the discrepancy. Nigerian government production figures are also significantly higher than ICCO estimates.

 

Nigeria has recently emerged from recession and a currency crisis which caused a chronic dollar shortage, forcing exporters to under-invoice their goods in order to use the foreign exchange black market to get premium for their hard currency.

 

The action caused the West African country slip to the sixth producer of cocoa in the world at the peak of the crisis. Riman said Nigeria was getting back to number four grower as exporters now use the official currency markets.

Riman said Nigeria was working on improving its bean quality especially with renewed demand from Europe.

 

However, bean count, a measure of the number of beans needed to produce 100 grams of cocoa, reached as high as 140 for the main crop.

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Rising Nigerian bonds drags yields down

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Nigeria’s local-currency bonds are on a roll, rising for the last eight days and driving their yields below Turkey’s for the first time in more than two years.

 

The average rate on Nigerian government bonds has fallen around 400 basis since an August-peak to 13 per cent. Yields are now 100 basis points below the Central Bank of Nigeria’s benchmark interest rate of 14 per cent, where its been held since July 2016.

Investors have piled into the naira market thanks to slowing inflation, a stable currency and rising Brent crude prices, which climbed about 25 per cent in the past six months to more than $70 a barrel. In contrast, they’ve turned bearish on Turkey, which has the worst-performing local bonds in emerging markets this year, because of accelerating inflation and loose monetary policy.

 

Central Bank Governor, Godwin Emefiele, may be tempted to commence his long-touted easing cycle and help revive the economy that has faltered since the 2014 oil crash. While that would reduce the attractiveness of naira assets, Nigerian yields are still high relative to other major emerging markets. Aside from Turkey, Argentina and Egypt’s bonds are the only ones to yield more in the Bloomberg Barclays EM Local Currency Index.

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