Inefficiencies, Corruption In Ports Cost Nigeria N1trn Yearly- Report

Ports, Nigeria, Corruption, Delays
The report says without clear legislation, ports governance remains prone to inefficiency and corruption.

A report on the performance of Nigerian Ports has revealed that the country loses over N1 trillion every year to port inefficiencies, process failures and corruption.

The report titled ‘Nigeria: Reforming the Maritime Ports’ which was commissioned by the Centre for International Private Enterprises in collaboration with the Lagos Chamber of Commerce and Industry and Financial Derivatives Company, was publicly unveiled in Lagos on Friday at the LCCI public-private discussions on port reforms.

The report states that while the efficiency of port operations is a major driver of trade and economic activities across countries, Nigeria’s case has been rather gloomy.

It says over the years, users and operators at the Nigerian Ports have been facing lingering challenges and bottlenecks which include infrastructure shortcomings, policy and regulatory inconsistencies, overlapping functions and duplicity of roles among government agencies operating within ports across the country.

The report also pointed out that a lack of clear legislation, ports governance remains prone to inefficiency and corruption. It added that under such condition, companies in the Nigerian ports have to deal with bureaucratic red tape, constant delays, high costs, harassment, and demands for illegal
charges.

Losing Money And Potential

Estimates from the research show that trillions of Naira in revenue is lost annually within the ports and business community due to inefficiencies and inherent shortcomings.

The report also stated that these inadequacies at the ports diminish their potential to create about 10,000 new jobs annually and about 800,000 jobs on the long run.

Ports, Nigeria, Reforms
Multiplicity of security agencies add to the already high costs of doing business at the Nigerian ports.

The Issues

The Nigeria: Reforming the Maritime Ports report claimed that Nigerian seaports remain the most expensive in the West African sub-region attributing this to the cumbersome documentation requirements and double charges imposed
on importers and exporters.

Using a semi-structured survey, respondents of the study listed the documentation processes, requiring 25-33 different papers from
multiple agencies as the biggest issue contributing to time and cost delays at Nigeria’s seaports.

About one-fourth of the respondents also complained about the duplication of functions of the multiple agencies within the ports while 29% of those surveyed in the report say multiple cargo inspections are the most critical of operational bottlenecks.

port-2
An overview of the issues identified

 

Not All Doom

It is not all doom for the industry according to the report.

It stated that Nigeria’s ports continue to see substantial increment in gross tonnage by 3.3% – Compounded Annual Growth Rate – to 144.2 million tons between 2010 and 2015.

The annual growth rate of 1.8% is expected to rise until 2021 despite the challenges in the sector.

However, these growth projections are premised on the assumption that the nation’s ports will continue to be the preferred means of transporting goods in and out of the ECOWAS sub-region.

 

Call For Immediate Port Reforms

In its recommendations, the report pointed out that authorities should embark on immediate port reforms.

These reforms are expected to lead to faster clearance of goods, shorter waiting times for ships awaiting berth, eliminating redundancies in the functions of the several regulatory government agencies in the ports.

It also called for the adoption of an Integrated Advance Cargo and
customs clearance system, with scanning, sealing and tracking (SST)
capabilities, establishment  of a National Trade Data Centre and implementation of a Single Window Platform.

The report also called for more private sector investment in Nigerian Ports, reduction in the number of government agencies to 6 from 14.

From the policy end of things, report called for the immediate passage of certain legislative bills that will aid port reforms and improve performance.

These bill include the National Transport Bill and the Port and Harbour Bill (PHB).

GDP: Nigeria To Further Surpass South Africa In 2016 – PwC

PricewaterhouseCoopersThe Chief Economist and Partner at PricewaterhouseCoopers in Nigeria, Andrew Nevine says the country’s Gross Domestic Product will grow some 30 billion U.S. dollars above South Africa in the current 2016 fiscal year.

Nigeria’s GDP stands at 568 billion dollars in 2014 versus 350.1 billion for South Africa. The gap is set to widen as South Africa faces some key challenges in its mining and energy sectors.

Speaking at the presentation of the new research report on ‘Nigeria: Looking Beyond Oil’ in Lagos on Thursday, Mr Nevine said that despite the present challenges facing Nigeria as Africa’s biggest economy, the potentials of the country beyond oil are enormous.

The new study jointly done by the international consulting firm and the Lagos Chamber of Commerce and Industry (LCCI), highlights tax basket expansion, proper fiscal management, ease of doing  business and developing a knowledge-based economy as some major drivers of economic diversification for Africa’s largest oil producer.

The PwC Chief Economist said that Nigeria’s intrinsic economic potential lie beyond crude oil, advising that the country should prepare for ”life beyond the oil resource”.

Simplified Processes

A Partner and Head, Tax and Regulatory Services with PricewaterhouseCoopers, Taiwo Oyedele, has also said that the National Assembly has a huge role to play in ensuring that Nigeria successfully diversifies its economy.

Speaking on Channels TV’s Business Morning on Friday, he highlighted the need to harmonise the sections of the Nigerian Constitution that will improve the economic and regulatory environment.

Even though transiting to a non-oil economy will not be an easy task, Mr Oyedele believes complex processes can be simplified to improve the ease of doing business.

Nigeria Automobile Is At A ‘Norming And Storming’ Stage – Oigaigbe

Chairman LCCI_ Oseme OisaigbeThe chairman of Automobile Group in the Lagos Chamber of Commerce and Industry, (LCCI), Oseme Oigiagbe, has described the Automobile industry in Nigeria as one in the ‘norming and storming’ stage of development.

On Channels Television’s programme, Business Morning, on Monday, Mr Oigiagbe said Nigeria’s automobile industry was in a stage of getting into its mainstream, a process that would require a very strong will for the industry to grow.

“We are going into the norming and storming stage and we are in the part of setting the record straight. If we do the implementations by following through the tenets of the policy in terms of the conceptual framework, the policy benefits, aims and objective, it will help in ensuring that the automobile industry in Nigeria get back on the mainstream,” he said.

According to the Director-General of the National of Automotive Council in Lagos, Mr Aminu Jalal, said that 11.2 billion Naira had been given out to sort loans to automobile part component manufacturers in the country to ensure that the automotive policy realised its full potentials.

Revealing that the Federal Government has shifted by six months only the full imposition of the new tariff on imported new vehicles from January to July, this year to allow importers to clear vehicles, he pointed out that they had ordered under the old rates and added six more months extension on the importation of used vehicles till December.

Mr Oigiagbe, stressed that an issue the government should address was the reversal of the increasing purchase of used automobile vehicles to that of the new vehicles, with the issues around warranty and ownership resolved.

To ensuring that the industry would have functional power to run, Mr Oigiagbe said that the issue on policy, structure and tariff needed to be regulated in the automobile industry with the introduction of import duty and import levy in Nigeria.

He, however, said persons (dealers) involved in the ‘used vehicle trade’ would get a concession and would not pay levy for cars till December but pay a duty that has been slated by the policy. Mr Oigiagbe further explained that the dealers operating in the new vehicle trade, would  now pay the 35 per-cent duty and 35 per- cent levy tariff to the government as tax.

He also noted that the industry was one of the highest ’employer of labour’ contributing to increasing skill the developmental effort. “The government should train a pull of manpower to achieving the goal in technology, acquisition, accumulation and renovation.

“We need to have people who have the training and adaptability to come to such knowledge interface. There have to be a new paradigm shift of how to acquire the man power, ” he said.

Mr Oigiagbe, advised that there should be a level of ‘interface quality control from product import to product assembling and to finished delivery in order to ensure that Nigeria would not remain to be a dumping ground for substandard goods.

Nigerians Willing To Pay For Stable Power Supply

Power Supply ReformThe Chairman of Power Group, Lagos Chamber Of Commerce and Industry, Mr Effiom Edet, has said that Nigerians are willing to pay for stable supply of electricity if they could see visible improvements in the sector.

Speaking on Channels Television’s programme, Business Morning, on Wednesday, Mr Edet said that to record a recoverable capacity in the power sector, infrastructure and gas needed to be put in place, with the upgrading of the east network prioritised.

Also, the head, Development Finance, Heritage Bank, Segun Akanji, said that the power sector required both the private sector and the government intervention.

To boost the power supply in Nigeria, Mr Akanji emphasised that the government had a responsibility to the people to create a stronger attraction by providing its own balance sheet for the people to access a larger share of funding from the international capital market, private equities and international investors.

Mr Akanji stressed the need for the government to give a lot of consideration to the sector by creating an atmosphere that would attract investors while it could leverage on that as a means of growing the economy.

“Basically it is the way we handle event that would determine whether it could be a crisis or not. But for me I do not think this would be a crisis because, power is important. Without power we cannot have a transformation agenda fully realised,” he said.

He further explained that If there was consistency in delivery of power supply in homes and industries in Nigeria, there would be a strong and massive economic development in the country.

Although the banking sector is exposed to giving out loans to investors and which may lead to crisis, Mr Akanji said that the pattern used in handling the loan process and usage of funds could lead to crisis.

“If the government will be willing to use its balance sheet as a form of guarantee for the power sector to secure the financing or negotiated with potential investors, it will further open up power sector for investors to come in. If this is done the sector facilities can be restructured and the crisis in the banking sector will not emerge,” Mr Akanji said.

 

Analyst Calls For More Investment To Prevent BCI Dropping

bciThe Lagos Chamber of Commerce and Industry in its 3rd quarter 2014 Business Confidence Index (BCI) indicated that the index dropped from 19.4% in q2-2014 to 14.3%.

Representing a 5.1% point slack of the confidence level among business operators over the last three months.

The Director of Research and Advocacy of the Lagos Chamber of Commerce and Industry, Mr Vincent Nwanni, who was on Business Morning to analyse the report, says the drop of the BCI scores at this time suggests that business leaders are largely pessimistic about expanding their investment over the next few months.

BCI is a leading economic indicator designed to measure the degree of optimism on the state of the economy that business leaders are expressing through their activities of investing and spending.

 

Muda Lawal Highlights Q2 Performance Of Nigerian Economy

DG_LCCIThe Director General, Lagos Chamber of Commerce and Industry (LCCI), Mr Muda Lawal on Thursday highlighted various aspects of the economy that have been affected both positively and negatively since the turn of the second quarter of the year.

Speaking on Channels Television’s business programme, Business Morning, he said that economic performance assessment depends on the perspective at which one is looking at it, noting that “there are macroeconomics, which has to do with a lot of exchange rates, inflation, foreign reserves and global developments as well.

“There are policy issues, which came up during the second quarter, things like the automotive policy, pronouncements on the cashless policy, the new guidelines for Bureau de Change, the privatisation of the Bank of Industry and Bank of Agriculture, which is a major issue for us, the pending Petroleum Industry Bill (PIB) and the budget that was signed very late.”

Mr Lawal, giving a rundown of institutional issues that affected the economy, further listed issues like the “cargo clearing at the ports, the Pre Assessment Report (PAR) that is issued by the Nigeria Customs Service, issues of logistics, particularly by small businesses” as “major issues affecting virtually almost every business in the country” adding that above all “we have security issues”.

While noting that all the aforementioned have impacted on the economy in different ways, Mr Lawal noted that some macroeconomics variables were favourable as they trended during the 2nd quarter, adding that “the exchange rate, particularly in the official market, is still stable relatively, and that has given some level of comfort to investors.

“In the Inter-bank and the parallel markets, there was even a slight appreciation between what we had in the first quarter and the second.

Mr Lawal, however, berated what he said was a gap that exists between the official exchange rates and what is obtainable in the Bureau de Change, noting that “that in itself is an indication of a kind of a distortion in the market”. He warned that “it could become an incentive for round tripping and sharp practices within the foreign exchange market.”

Mr Lawal also shed more light on the inflation issues that have affected the economy, “Inflation rate at eight per cent is still tolerable because it is still a single digit threshold, although there was a slight increase of 0.1 per cent when you relate what you had in May to what you had in April”, adding that “generally in terms of inflation we are not doing very badly”.

LCCI Asks CBN To Focus On Unemployment

web_prog_businessmorningThe Lagos Chamber of Commerce and industry, LCCI has asked the Central Bank of Nigeria to focus on unemployment rate as one of the key variables considered for its monetary policy decisions, among other issues.

The Director General of LCCI, Mr Muda Yusuf, a guest on this edition of Business Morning, wants the CBN governor, Mr Godwin Emefiele to quickly unveil the implementation guidelines on his new policy direction to allow for a more robust conversation and engagement.

He urged Mr Emefiele to come up with a roadmap that will ensure that the nation’s financial system contributes more to real sector growth.

Remi Bello Speaks On Lagos Chamber of Commerce And Industry

Question timeThe Lagos Chamber of Commerce and Industry, LCCI, was founded in 1888 and was incorporated as a non-profit organisation in 1950.

On this edition of the programme, the newly installed President of the institution, Mr Remi Bello speaks on his vision for the LCCI and speaks on related matters.

LCCI Advocates rail System To Speed Up Cargo Clearance

The Lagos Chamber Of Commerce and Industry has called on the Federal Government to accelerate the resuscitation of the rail system to evacuate cargo from the Lagos ports.

The chamber described the menace of trucks and trailers on the roads as unbearable.

In a statement signed by the President of the chamber, Remi Bello, the 48 hours cargo clearance target set by government is far from being achieved at this time.

Major problem areas identified by the chamber were delays in the positioning of cargo at the port terminals and inadequate equipment for cargo handling, among others.

According to the chamber, the implication of these challenges include high demurrage charges arising from delays in clearing of cargo, disruption of production schedules of manufacturers as raw materials are not delivered in good time to factories and high cost of fund on borrowed funds by importers.

Destination Inspection Scheme Has Yielded Results-Customs

The Nigeria Customs Service (NCS) have admitted that they have faced challenges in a bid to take over the Destination Inspection Service from contracted Scanning Service Providers (SSPs) as directed by President Goodluck Jonathan.

The Spokesman of the Service, Wale Adeniyi, who appeared on Channels Television’s Business Morning, however said that the Service was “coping very well and very adequately.”

He explained that having taken over the responsibility towards December, an “upbeat period” and considering the volume of “importation for Christmas and New Year”, they “were able to cope with all the challenges in volume, challenges of putting a new system in place and challenges of mobilising the stakeholders behind the new scheme”.

Also speaking on the programme, a member of the Freight Forwarders Group at the Lagos Chamber of Commerce and Industry, Ikenna Nwosu, lauded the decision by the Federal Government to implement the policy, adding that the “organised private sector is fully in support of it” and are “partnering the customs to see it work.”

He commended the Nigeria Customs Service for taking over the scheme, which used to be handled by three agencies, admitting that “that is a lot of responsibility”.

He however berated the deluge of applications, noting that it forms a major part of the challenges the Customs Service faces in executing the project.

Due to the cumbersome nature of signing the application for the release of containers, Mr Nwosu joined other members of the organised private sector to call for an electronic application.

“As a key enabler of the process, rather than have importers accrue demurrage to their cargo, the Customs have proved that importers can take pre-release of their cargo by paying  duty based on their invoices; which is what is on now.

“They made some complains that that process is a bit drawn out, sometimes there are delays because the Area Commander is one man; he has to sign these papers”, adding that “the recommendations is that perhaps the Customs should think of making that application process electronic.”

Reacting, Mr Adeniyi, who was joining from the Abuja studios of Channels Television, explained that the Service has already implemented the electronic application process in the PAL System, insisting that “there is no point trying to replicate what we have done in PAL, which is the short gap measures that we have taken to address an emergency situation of congestion.”

He further noted that people carrying invoices to be checked and getting duties paid is a practical measure the Service has taken, revealing that those can be rectified later, if it is higher or lower.

2013 Economic Review: Analysts Advocate Support For Local Industry

Experts in Nigeria’s banking and commerce industries have emphasized the need for Nigeria to develop infrastructure if its dream of building local industry would be fulfilled in the year 2014.

A Member of the Chartered Institute of Bankers of Nigeria, CIBN, Alex Ananeje, made this statement while appearing on the breakfast programme, Sunrise on Channels Television.

A Director of the Lagos Chamber of Commerce and Industry, LCCI, Dele Alimi, who was also a guest on the programme, added that there is no way the Nigerian economy can grow if the government does not provide an enabling environment for local businesses to thrive.

On its final edition for the year 2013, the programme sought to do a review of Nigeria’s performance during the year, and according to Alimi, “If we solve the problem of power in Nigeria, you will be shocked at the level of growth that will follow.”

While making his case for the Small and Medium Enterprises, SMEs, Mr Alimi noted that statistics have shown that SMEs are responsible for over 30 million jobs in Nigeria. A figure he said means that they actually drive the economy. Therefore the country cannot afford to let the sector suffer.

Although, he agreed that the structure of many SMEs in Nigeria is not good enough, especially when the need to access funding is concerned, as only few lenders would want to release money to some of these small businesses considering the way they are run, but because the country needs that sector to thrive, then it must do all things to help business owners restructure their ventures; a role he said the Lagos Chamber of Commerce and Industry, LCCI, has been taking seriously.

Looking back at 2013, Mr Ananeje said that we (Nigeria) “could have done better as far as our economy is concerned”

Mr Alimi however added a different perspective to how much below par Nigeria’s economic performance had been during the year. He said that the cost of governance in Nigeria is too high, and there have been no real efforts to bring it down.

He alleged that the efforts made by the government, claiming to have reduced the salaries of government officials are deceptive, arguing that they only reduced their basic salaries while the large allowances are still being paid.

He asked for renewed policies to drive the economy, starting with developing programmes that will affect the people directly; from the farmers to the barbershop owners. He said that we need to build an economy where a barber can start his business without first bothering about acquiring a power generator.

Looking ahead, Alex Ananeje warned that the country is going to have some serious challenges in 2014, especially for the Central Bank of Nigeria, CBN: “We are entering the election year and more money will be pumped into the system, there has to be a stronger monetary policy put in place”

 

LCCI Decries FG’s planned importation of 100 Rice Mill

The Lagos Chamber of Commerce and Industry (LCCI) has faulted the plan by the federal government to import 100 rice mills from China for distribution to states.

In a press release on Tuesday, the president of the chamber Mr Goodie Ibru said the acquisition of the mills should be done by the private sector with the support of government.

According to him, the plan negates the policy thrust in economic management that government would concentrate on the provision of enabling environment and institutions to support the growth of private enterprises.

The Ministry of Agriculture and Rural Development, had recently announced that with the federal government’s determination to meet its target of making the country self-sufficient in rice production by 2015, the Ministry will be importing 100 large-scale mills to boost rice production in the country.

The rice mills are expected to put in place the capacity to produce 2.1 million tonnes of rice.