New Port Order and the National Economy

TIN news:   With the new order designed to check inefficiency, leakages in the harborages, and trade malpractices, among others, the Nigerian Shippers Council (NCS) is optimistic that the contribution of the ports sector to the national economy at this time of dwindling returns from oil will be maximised, writes Francis Ugwoke
The current economic reality in the country has become a big concern not just to the Federal Government but also to all Nigerians. The dwindling returns from the oil sector have turned out a bigger challenge to the non-oil sectors which must work hard to fill the gap being created. The nation’s shipping sector is believed to have the capacity to easily fill this gap with the right policies in place. It does not matter that the sector itself has been hit in recent time by policies that appear to have stifled import trade. But despite these issues, concerted efforts are being made by relevant agencies to ensure that the shipping sector contributes its quota in national economic development. The Nigerian Shippers’ Council (NSC) as the Ports Economic Regulator is in the fore-front to ensure that the nation’s ports sector contributes maximally to the national economic development. The regulator which is currently spearheading a new port order believes that it will transform the ports industry with a number of multiplier effects on the economy.
Ports Industry Scenario
In the days before the reform in the nation’s ports, the system was that of fraudulent practices, bureaucratic bottlenecks and congestion in the system. With the concessioning exercise carried out in 2006, there had been an improvement, a development that had been acknowledged even by the ports economic regulator. During the recent International Sea Trade and Investment Convention in Lagos, the Executive Secretary of the Nigerian Shippers Council (NSC), Mr Hassan Bello, said the nation’s seaports had become efficient and can now compete with those of the neighbouring ports in handling regional and international transit trade. The ports, he said, had been witnessing radical transformation since the Council was appointed economic regulator. According to him, the vacuum that existed in the past made it difficult for the nation to enjoy the gains of the reform programme.
He added, “inefficiency in the procedures and operations of agencies and service providers and even users was adversely affecting and undermining Nigeria’s competitive advantage in international trade”. But he said that things had changed since the Council became the economic regulator for the ports. “We have been addressing the anti competition behaviours which characterized the activities of the ports in the past”. The current direction of the ports regulator is the new port order which is expected to revolutionise operations in the ports in terms of orderliness and efficiency that will in turn boost revenue generation.
New Port Order by the Council
The scenario in global ports is that of glaring efficiency. This is what obtains in the ports of Singapore and many others in advanced countries where shippers do not encounter any difficulty in all their transactions. In these ports, every system facilitates trade. While there has been some improvement in our ports system, what one finds in advanced countries in terms of efficiency rubbishes what is in place in Nigerian ports. And this appears to be the target of the ports regulator, to put in place an international standard practice that is clearly efficient and lead to more revenue generation for the government. When Nigerian ports are undoubtedly better than the neighbouring ports of Ghana and Cotonou, Nigeria will automatically be the preferred port of destination for many shippers and becomes the hub in the West and Central African region. This will in turn translate into more revenue generation from the sector for the benefit of the federal government and indeed all service providers.
In effect, what the ports regulator has been doing is enforcing regulation among the service providers, including the landlord of the system in living up to expectation in their individual and collective obligations in the ports as contained in the concession agreement. This is aimed at ensuring infrastructure rehabilitation and provision of state of the art cargo handling equipment to facilitate fast discharge of cargoes from ships and subsequent positioning of containers for examination and clearance by freight forwarders. With adequate cargo handling equipment, the ship dwell time in the ports will be reduced, a situation that will in turn gladden the heart of ship owners. This helps in attracting more ships to the country.
Port Community System
As part of the new order, the Council is establishing a new platform that will create a port community system involving every player, what he does, timing of activity and cost for such activity for all stakeholders and agencies in the ports. The idea is to establish a framework where the competitiveness of the industry will be enhanced beyond its neighbouring ports of Cotonou, Ghana, Cameroun, among others. It is to improve safety, security, integration of an intelligent processing of data from all stakeholders and other information. The platform will harmonise and simplify administrative and clearance procedures through the establishment of business networks. This is part of the efforts to improve the efficiency of shipping services in the country. The regulator has also taken this message to the stakeholders who have started registering with the Council as part of this new order.
How Genuine Declarations Will Boost Revenue
One area the ports regulator is focusing on now is how to get shippers to stop fraudulent practices through which the nation loses a lot of revenue. This is significant considering the expectations of the federal government from the shipping sector. The council believes that so much revenue can be generated from the ports sector once trade crime can be curtailed. Many have estimated that notwithstanding the bad economy that has affected all sectors, as much as N3trillion can be raised from the ports alone apart from what could be generated from the whole maritime industry.
The Council has been talking to shippers and freight forwarders to make genuine declarations to the customs instead of under-declaration, concealment and under-valuation of imports. Importers have over the decades formed the habit of cheating government through wrong declarations. This is responsible for some of the delays freight forwarders suffer in the ports before taking their goods. The result is that many of them who are discovered are issued with Debit Notes (DNs) which they have to pay before taking their goods. But in this, so much revenue is lost to some unscrupulous customs officers who demand ‘settlement’ to reduce the amount the importer is to pay to the government.
The Council has taken up this matter with both shippers and their freight forwarders to shun all forms of wrong declarations because of the negative effect on the economy. Executive Secretary of the Council, Bello, is of the view that the Nigeria Customs Service (NCS) should check such malpractices through the instrument of law. The Customs law provides enough punishment for those involved in trade crime. Last week, the new Comptroller-General, Col Hammed Ali (rtd), threatened to prosecute freight forwarders involved in any trade crime. Ali also threatened to sack officers of the Customs Service conniving with the freight forwarders or shippers to defraud the government. On the other hand, Bello said his Council as the regulator will do everything to enthrone transparency, predictability and efficiency in the ports. One of the instruments to check fraud in the system, according to him, is advanced cargo information system, popularly known as Cargo Tracking Note (CTN).
CTN, apart from fastening the process of cargo clearance, Bello said, will block pilferages and leakages in the harborages. He said, “You cannot import wrist watches or tyres and say they are tiles. This one, you know what the manifest is ..so before you come, you know, so the issue of compliance will be strengthened because unfortunately Nigerians don’t comply, they under-declare the goods they want to import.
This is tax evasion. If we pluck that, even the ship sometimes, they cut their gross registered tonnage (GRT) because of the amount they are to pay is tied to it. With CTN, they cannot do that…it is very transparent. Shippers’ Council will be able to see everything, including other agencies. This is the beginning of the new port order”.