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Danger as Cargo throughputs now below Guaranteed Minimum Tonnage at Ports

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A scenario that tends to mean that several reforms of the maritime agencies are not working seems to be playing out across the Nigeria ports considering the revelation that cargo throughputs have fallen below the Guaranteed Minimum Tonnage (GMT).

Whereas several analysts traced the development to the introduction of forex restriction to 41 items known to be driving import business in Nigeria, others say the reason for the scenario cannot not be unconnected to non convergence of reforms being tailored by maritime agencies in the last six months after all.

For instance, just as the Nigerian Customs suddenly banned importation of vehicles through the land borders, it failed to recalibrate existing toxic regulations hampering car imports in terms of duty paid and clearing logistics.

Another reason is the so called introduction of single windows by virtually every agency operating in the ports for its own use instead of a common window where other agencies can gain access to grow ease of doing business.

Otherwise, analysts say none of the so called single window is actually single rather private windows because all the windows are tailored for use by the particular agency that designed it, thus making the entire system full of windows but none to do business with by port users at the end.

Though the Nigerian Customs recently claimed that it has removed certain levels of documentations in the processing of imported and exported goods, contacted clearing agents say the development has not made any change because though receipted may come down, cases of unreceipted payments are still high which is driving the main challenge of ease of doing business at any of the Nigerian ports.

Explaining issues in an interview, spokesman for Seaports Terminal Operators Association of Nigeria (STOAN), Bolaji Akinola, noted that most of the terminals nationwide were operating half their capacities, saying cargo handling operations at the nation’s ports are at a low ebb, an indication that cargo throughputs have fallen below the Guaranteed Minimum Tonnage (GMT). The benchmark was captured in the agreement entered by the Federal Government and the concessionaires 10 years ago.

Cargo throughput refers to the total volume of cargo (inward and outward) handled at the ports nationwide. The low cargo volume is an indication of an ailing economy where manufacturing and businesses struggle to survive. The multi-billion naira cranes and equipment, which dot the various ports, are now mostly idle, indicative of the uncertainty over investments and returns likewise.

Statistics gathered by Business Hilights show that terminal operators across the six major seaports in the country have decried the negative impact, as almost 80 per cent of the clearing agents have closed shop with the attendant job loss conservatively put at 30,000.

Besides, figures garnered from the Nigerian Ports Authority (NPA) operational statistics reveal a downward throughput of vessels in the last six years (excluding crude oil) from 76.7 million tonnes in 2010 to 83.4 million tonnes in 2011, and further down to 77 million tonnes in 2012.

Volume picked up a little bit in 2013 to 78.2 million tonnes and higher to 84.9 million tonnes in 2014. But it fell again to 77.3 million tonnes in 2015 and down to paltry 53.2 million tonnes in 2016.

Akinola, leading maritime analyst and consultant averred that “The drop in cargo volume has been as a result of some anti-trade policies of the past administration. The imposition of 70 per cent tariff on imported vehicles and the hike in import duty of rice contributed to depriving our ports of much needed cargoes. The Central Bank of Nigeria (CBN) also compounded the situation by barring the importers of certain items from accessing the official foreign exchange platform. The ports are bleeding as a result of these policies.”

Again, data from the National Bureau of Statistics (NBS), show that the total number of cargoes in and out of all the ports increased from 78,281,634 in 2013 to 84,900,588 in 2014, but later dropped to 78,322,558 and 70,681,028 in 2015 and 2016. The number of inward cargoes also rose from 50,005,603 in 2013 to 53,773,526 in 2014 before dipping in 2015 and 2016.

Just as outward cargoes increased from 28,276,031 in 2013 to 31,127,062 in 2014 and thereafter diminished to 29,019,349 in 2015, and 26,912,130 in 2016, further investigation at NPA’s website showed that the agency has not posted throughput data since October last year to date.