By Dr. Eugene Nweke
The following study and comparisons were undertaken with the aid of artificial intelligence to guide and provide a clear understanding with respect to our maritime industry performances within the region. This modest is divided under the following subheadings so as to capture and provide requisite information as possible for the understanding of the industry administrators.
1.Nigerian Ports And The Burden Of Cost And Efficiency
■.Nigeria’s ports are often categorized as one of the most unfriendly ports in the continent and the world due to various challenges and inefficiencies, including:
1. Congestion and Delays: Long waiting times for vessels to berth and clear customs, though with improvements, but it is still concerns.
2. Corruption: Widespread bribery and extortion by officials and other stakeholders.
3. Inefficient Processes: Some ports still observe manual and cumbersome procedures, leading to delays and errors.
4. Lack of Infrastructure: Inadequate facilities, equipment, and maintenance.
5. Security Concerns: Theft, pilferage, and damage to cargo.
6. High Costs: Excessive charges, fees, and levies.
7. Bureaucratic Hurdles: Complex and time-consuming regulatory requirements.
8. Lack of Transparency: Unclear and inconsistent application of rules and regulations.
9. Inadequate Technology: Limited use of modern technology for efficient port operations.
10. Poor Management: Ineffective leadership and management structures.
These challenges lead to increased costs, reduced competitiveness, and decreased investor confidence, ultimately affecting Nigeria’s economy and trade.
Various reports and indices, such as:
1. World Bank’s Doing Business Report
2. World Economic Forum’s Global Competitiveness Index
3. African Development Bank’s African Ports Performance Index
Have consistently ranked Nigerian ports as among the least efficient and most unfriendly in the world.
2.Effects Of Comparative Higher Total Cargo Clearance Between Nigeria and Other Ports Within The Region.
■. Estimates suggest that the total costs of cargo clearance from ports in Nigeria are significantly higher compared to other West African ports. Here’s a rough breakdown:
– Nigeria:
– Clearance costs: $1,500 – $3,000 per TEU (Twenty-Foot Equivalent Unit)
– Demurrage and storage: $500 – $1,000 per TEU
– Transportation and logistics: $500 – $1,000 per TEU
– Total: $2,500 – $5,000 per TEU
– Ghana:
– Clearance costs: $500 – $1,000 per TEU
– Demurrage and storage: $200 – $500 per TEU
– Transportation and logistics: $300 – $600 per TEU
– Total: $1,000 – $2,100 per TEU
– Côte d’Ivoire:
– Clearance costs: $400 – $800 per TEU
– Demurrage and storage: $150 – $300 per TEU
– Transportation and logistics: $250 – $500 per TEU
– Total: $800 – $1,600 per TEU
– Benin:
– Clearance costs: $300 – $600 per TEU
– Demurrage and storage: $100 – $200 per TEU
– Transportation and logistics: $200 – $400 per TEU
– Total: $600 – $1,200 per TEU.
3.Factors Promoting High Cargo Clearance Cost In Nigerian Ports
■. Note that these estimates may vary depending on factors like cargo type, volume, and shipping lines. However, they give an indication of the relatively high costs associated with cargo clearance in Nigerian ports compared to other West African ports.
The high costs in Nigeria are largely due to:
1. Higher clearance costs and fees
2. Longer dwell times, leading to increased demurrage and storage costs
3. Inefficient transportation and logistics systems
4. Corruption and unofficial payments
These costs can make Nigerian ports less competitive and may discourage investors and shippers from using them.
4.Breakdown Of Comparative Charges To Buttress The Burden Of Higher Cargo Clearance Costs In The Nigerian Ports :
■. Nigerian port charges are generally considered to be higher compared to other ports in the West African region. Here’s a rough breakdown of the charges:
– Ship Dues:
– Nigeria: $15,000 – $30,000 per vessel
– Ghana: $5,000 – $10,000 per vessel
– Côte d’Ivoire: $3,000 – $6,000 per vessel
– Benin: $2,000 – $4,000 per vessel
– Cargo Dues:
– Nigeria: 5% – 10% of cargo value
– Ghana: 2% – 5% of cargo value
– Côte d’Ivoire: 1.5% – 3% of cargo value
– Benin: 1% – 2% of cargo value
– Environmental Levies:
– Nigeria: $1,000 – $2,000 per vessel
– Ghana: $500 – $1,000 per vessel
– Côte d’Ivoire: $200 – $500 per vessel
– Benin: $100 – $200 per vessel
– Wharfages:
– Nigeria: $1,000 – $2,000 per vessel
– Ghana: $500 – $1,000 per vessel
– Côte d’Ivoire: $200 – $500 per vessel
– Benin: $100 – $200 per vessel
– Pilotage:
– Nigeria: $5,000 – $10,000 per vessel
– Ghana: $2,000 – $5,000 per vessel
– Côte d’Ivoire: $1,000 – $2,000 per vessel
– Benin: $500 – $1,000 per vessel
Note that these charges are estimates and may vary depending on the specific port, vessel type, and cargo.
5.Why Nigerian Ports Are Considered Less Competitive:
■.Nigerian ports are considered less competitive due to:
1. Higher ship dues and cargo dues
2. Additional charges like environmental levies and wharfages
3. Higher pilotage fees
4. Complexity and uncertainty in the charging system
These higher charges can make Nigerian ports less attractive to shipping lines and cargo owners, potentially diverting trade to neighboring ports.
6.Comparative Estimate In Ports Handling, Delivery And Storage Charges Within The Region.
■. Here’s a rough estimate of port handling, delivery, and storage charges in Nigeria compared to other West African ports:
a).Port Handling Charges:
– Nigeria: $200 – $500 per TEU (Twenty-Foot Equivalent Unit)
– Ghana: $100 – $300 per TEU
– Côte d’Ivoire: $80 – $200 per TEU
– Benin: $60 – $150 per TEU
b).Delivery Charges:
– Nigeria: $150 – $300 per TEU
– Ghana: $80 – $200 per TEU
– Côte d’Ivoire: $60 – $150 per TEU
– Benin: $40 – $100 per TEU
c).Storage Charges (per day):
– Nigeria: $10 – $20 per TEU
– Ghana: $5 – $10 per TEU
– Côte d’Ivoire: $3 – $6 per TEU
– Benin: $2 – $4 per TEU
Note that these estimates may vary depending on factors like cargo type, volume, and shipping lines.
7.Why Nigerian Ports Tend To Have Higher Charges.
■.Nigerian ports tend to have higher charges due to:
1. Inefficient port operations
2. Higher labor and equipment costs
3. Complexity in the charging system
4. Additional fees for services like cargo tracking and monitoring
In contrast, other West African ports have implemented reforms to reduce costs and increase efficiency, making them more competitive.
Keep in mind that these estimates are rough and may vary depending on specific circumstances.
8.Comparative Product Regulatory Fees & Levies Within The Region:
■. Here’s an estimate of product regulatory fees/levies in Nigeria compared to other West African ports:
Food and Beverages:
– Nigeria: 5% – 10% of cargo value (e.g., NAFDAC, SON)
– Ghana: 2% – 5% of cargo value (e.g., FDA, GSA)
– Côte d’Ivoire: 1.5% – 3% of cargo value (e.g., Codex, Ivorian Standards)
– Benin: 1% – 2% of cargo value (e.g., Benin Standards, Health Ministry)
Pharmaceuticals:
– Nigeria: 10% – 15% of cargo value (e.g., NAFDAC)
– Ghana: 5% – 10% of cargo value (e.g., FDA)
– Côte d’Ivoire: 3% – 6% of cargo value (e.g., Ivorian Health Ministry)
– Benin: 2% – 4% of cargo value (e.g., Benin Health Ministry)
Electronics and Electricals:
– Nigeria: 5% – 10% of cargo value (e.g., SON, NCC)
– Ghana: 2% – 5% of cargo value (e.g., GSA, Energy Commission)
– Côte d’Ivoire: 1.5% – 3% of cargo value (e.g., Ivorian Standards, Energy Ministry)
– Benin: 1% – 2% of cargo value (e.g., Benin Standards, Energy Ministry)
Other Products:
– Nigeria: 5% – 10% of cargo value (e.g., SON, NESREA)
– Ghana: 2% – 5% of cargo value (e.g., GSA, EPA)
– Côte d’Ivoire: 1.5% – 3% of cargo value (e.g., Ivorian Standards, Environment Ministry)
– Benin: 1% – 2% of cargo value (e.g., Benin Standards, Environment Ministry)
Note that these estimates may vary depending on the specific product, agency, and circumstances.
9.Why Nigeria Product Regulatory Agencies Tend To Have Highier Levies And Fees
■. Nigerian ports tend to have higher regulatory fees/levies due to:
1. Multiple agencies involved in product regulation
2. Higher charges by individual agencies
3. Complexity in the regulatory process
4. Additional fees for services like product, sampling, testing and certification
In contrast, other West African ports have implemented reforms to reduce regulatory burdens and costs, making them more competitive.
10.Factors Impeding Trade
Value Added Supply Chain In Nigeria Inland Depots/Dry Ports Operations.
■. Several factors impede trade value-added supply chain in Nigeria, particularly in inland ports. Some key challenges include:
1. Inadequate Infrastructure: Poor road networks, insufficient warehousing, and lack of modern cargo handling equipment.
2. Inefficient Customs Processes: Complex and time-consuming customs procedures, leading to delays and increased costs.
3. Security Concerns: Cargo theft, pilferage, and damage due to inadequate security measures.
4. High Transportation Costs: Inefficient transportation systems, leading to high costs and long transit times.
5. Lack of Intermodal Connectivity: Inadequate linkages between modes of transportation (road, rail, water).
6. Inadequate Information Technology: Limited use of technology for efficient cargo tracking, monitoring, and management.
7. Corruption and Bureaucratic Hurdles: Unofficial payments, complex regulations, and slow decision-making processes.
8. Limited Warehousing and Storage: Inadequate facilities for cargo storage, leading to congestion and damage.
9. Inadequate Skilled Labor: Shortage of trained personnel in cargo handling, logistics, and supply chain management.
10. Policy and Regulatory Framework: Unclear or inconsistent policies, leading to uncertainty and inefficiencies.
11. Additional Challenges:
■. Inland depots/Dry Ports in Nigeria face additional challenges, including:
1. Limited Access to Inland Ports: Poor road networks and inadequate intermodal connectivity.
2. Inadequate Facilities and Equipment: Limited cargo handling capacity and outdated equipment.
3. High Costs and Fees: Excessive charges and fees for services, leading to increased costs.
4. Security Concerns: Cargo theft and pilferage due to inadequate security measures.
Addressing these challenges is crucial to improving trade value-added supply chain efficiency in Nigeria, particularly in inland ports.
12.Comparative Payable Customs Duty Value On Imports Within The Region:
■. The payable Customs duty value for imported products can vary significantly between Nigeria Customs ports and other Customs authorities within the region. Here’s a rough estimate of the differences on a TEU (Twenty-Foot Equivalent Unit) basis:
– Nigeria Customs:
– Average duty rate: 20% – 30% of cargo value
– Additional charges (e.g., VAT, CISS, ETLS): 10% – 20% of cargo value
– Total payable duty: 30% – 50% of cargo value
– Ghana Customs:
– Average duty rate: 10% – 20% of cargo value
– Additional charges (e.g., VAT, NHIL): 5% – 10% of cargo value
– Total payable duty: 15% – 30% of cargo value
– Côte d’Ivoire Customs:
– Average duty rate: 10% – 20% of cargo value
– Additional charges (e.g., VAT, statistical tax): 5% – 10% of cargo value
– Total payable duty: 15% – 30% of cargo value
– Benin Customs:
– Average duty rate: 10% – 20% of cargo value
– Additional charges (e.g., VAT, statistical tax): 5% – 10% of cargo value
– Total payable duty: 15% – 30% of cargo value
Note that these estimates may vary depending on the specific product, cargo value, and other factors.
Nigeria Customs tends to have higher duty rates and additional charges compared to other countries in the region. This can make Nigerian ports less competitive and may encourage importers to use neighboring ports.
Keep in mind that these estimates are rough and may vary depending on specific circumstances.
13.Comparative Minimum Payable Customs Duty Value Per TEU Within The Region
■. Based on the estimates provided earlier, here is a comparative minimum payable Customs duty value for a TEU (Twenty-Foot Equivalent Unit) between Nigeria Customs and other Customs authorities within the region:
– Nigeria Customs: $1,500 – $3,000 per TEU (minimum payable duty)
– Ghana Customs: $800 – $1,500 per TEU (minimum payable duty)
– Côte d’Ivoire Customs: $600 – $1,200 per TEU (minimum payable duty)
– Benin Customs: $500 – $1,000 per TEU (minimum payable duty)
Note, that these are rough estimates and can vary depending on the specific product, cargo value, and other factors.
The minimum payable Customs duty value for a TEU in Nigeria is significantly higher compared to other countries in the region. This can make Nigerian ports less competitive and may encourage importers to use neighboring ports.
14.Estimated Difference In The Minimum
Payable Duty Value Within The Region.
■. Here’s a rough estimate of the difference in minimum payable duty:
– Nigeria vs. Ghana: $700 – $1,500 per TEU
– Nigeria vs. Côte d’Ivoire: $900 – $1,800 per TEU
– Nigeria vs. Benin: $1,000 – $2,000 per TEU
Keep in mind that these estimates are rough and may vary depending on specific circumstances.
■. The average comparative Cargo dwell or processing time in customs control between Nigeria and other customs within the region is:
– Nigeria: 20-30 days (average dwell time)
– Ghana: 7-14 days (average dwell time)
– Côte d’Ivoire: 5-10 days (average dwell time)
– Benin: 5-7 days (average dwell time)
Note that these estimates may vary depending on factors like cargo type, customs clearance processes, and port efficiency.
15.COMPARATIVE CARGO CLEARANCE DWELL TIME IN THE CUSTOMS ADMINISTRATION WITHIN THE REGION:
■. Nigeria’s average dwell time is significantly longer compared to other countries in the region. This can lead to increased costs, reduced competitiveness, and decreased investor confidence.
Here’s a rough estimate of the difference in average dwell time:
– Nigeria vs. Ghana: 13-16 days
– Nigeria vs. Côte d’Ivoire: 15-20 days
– Nigeria vs. Benin: 15-23 days
16.FACTORS RESPONSIBLE FOR THE DELAYS:
■.These delays can be attributed to various factors, including:
1. Inefficient customs processes
2. Lack of automation and technology
3. Insufficient staffing and training
4. Complex regulatory requirements
5. Corruption and bureaucratic hurdles
Reducing dwell times can significantly improve trade facilitation, increase efficiency, and enhance Nigeria’s competitiveness in the region.
17.IMPACTS OF PIRATES ACTIVITIES IN THE GULF OF GUINEA – ISSUES.
■. The sponsors of pirate organizations and attacks on commercial ships in the Gulf of Guinea are not explicitly known, as piracy is a complex and often clandestine issue. However, various reports and investigations suggest that:
1. Local Militants and Insurgent Groups: Some Nigerian militant groups, like the Movement for the Emancipation of the Niger Delta (MEND), have been linked to piracy in the region.
2. Organized Crime Syndicates: Transnational organized crime groups, possibly with connections to drug trafficking or other illicit activities, may be involved in sponsoring piracy.
3. Corrupt Government Officials: In some cases, corrupt government officials or security personnel might be complicit in or profit from piracy.
4. Business Interests: Some companies or individuals might be benefiting from the instability and piracy in the region, potentially sponsoring or tolerating these activities.
5. International Terrorist o
6. Organizations: There are concerns that international terrorist groups, like Al-Qaeda or ISIS, might be linked to piracy in the Gulf of Guinea, but concrete evidence is scarce.
It’s essential to note that these are suspicions and allegations, and the exact sponsors of piracy in the Gulf of Guinea remain unclear. International efforts to combat piracy and improve maritime security in the region are ongoing.
18.CONNECTIONS BETWEEN INTERNATIONAL SHIPPING CARTELS AND OIL BUNKERING CARTELS IN NIGERIAN WATERS:
■ .There are allegations of a connection between international shipping cartels and oil bunkering cartels in Nigerian waters, including:
1. Collusion in Oil Theft: International shipping companies or their agents might be complicit in oil theft by transporting stolen oil or providing logistical support to oil bunkering cartels.
2. Ship-to-Ship Transfers: International shipping vessels might be involved in illegal ship-to-ship transfers of stolen oil in Nigerian waters.
3. Fake Documentation: International shipping companies might provide fake documentation or assist in creating false papers to facilitate the transportation and sale of stolen oil.
4. Money Laundering: International shipping companies or their affiliates might be used to launder proceeds from oil bunkering activities.
5. Protection and Escort Services_: International shipping companies might offer protection or escort services to oil bunkering cartels, ensuring safe passage for stolen oil.
6. Bribes and Corruption: International shipping companies or their agents might bribe Nigerian officials or provide other forms of corruption to facilitate oil bunkering activities.
Please note that these are allegations and not all international shipping companies are involved in such activities. However, there have been reports and investigations suggesting connections between international shipping and oil bunkering cartels in Nigerian waters.
19.ESTIMATED REVENUE IMPLICATIONS OF PIRACY AND OIL BUNKERING:
■. Yes, it is estimated that both piracy activities in the Gulf of Guinea and bunkering activities in Nigeria generate significant revenues, potentially exceeding $1 million weekly.
Piracy in the Gulf of Guinea:
– A 2020 report by the International Maritime Bureau (IMB) estimated that piracy in the Gulf of Guinea generates around $1.4 million to $2.2 million per week.
– Another report by the Maritime Domain Awareness for Trade – Gulf of Guinea (MDAT-GoG) estimated that piracy in the region generates around $1 million to $1.5 million per week.
Bunkering activities in Nigeria:
– A 2019 report by the Nigerian Navy estimated that oil bunkering activities in Nigerian waters generate around $1.4 million to $2.5 million per day, which translates to around $9.8 million to $17.5 million per week.
– Another report by the International Energy Agency (IEA) estimated that oil theft in Nigeria generates around $1 billion to $2 billion annually, which translates to around $19 million to $38 million per week.
Please note that these estimates vary and should be used as a rough guide only. The actual figures might be higher or lower, as the illicit nature of these activities makes accurate tracking challenging.
20.REFLECTIONS ON THE 2020 REPORTS ON THE MINIMUM REVENUE GENERATION OF THE NPA AND NIMASA:
■.The minimum annual revenue generated by NIMASA and NPA varies, but here are some estimates based on recent data:
NIMASA:
– 2020: ₦47.6 billion (approximately $123 million USD)
– 2019: ₦44.6 billion (approximately $115 million USD)
– 2018: ₦38.6 billion (approximately $100 million USD)
Contribution to GDP: NIMASA’s revenue is approximately 0.05-0.07% of Nigeria’s GDP.
NPA:
– 2020: ₦289.9 billion (approximately $750 million USD)
– 2019: ₦256.8 billion (approximately $670 million USD)
– 2018: ₦230.8 billion (approximately $600 million USD)
Contribution to GDP: NPA’s revenue is approximately 0.3-0.4% of Nigeria’s GDP.
Note: These figures are estimates and may vary depending on various factors, such as fluctuations in global trade, oil prices, and exchange rates.
GDP percentage calculations are based on Nigeria’s 2020 GDP estimate of approximately $248 billion USD.
Keep in mind that these figures are subject to change and might not reflect the current revenue and GDP contributions. For the most up-to-date information, please refer to the agencies’ official reports or recent news sources.
21.REFLECTIONS ON THE 2020 REPORTS ON THE MINIMUM REVENUE GENERATION OF THE SON AND NAFDAC:
■. The minimum annual revenue generated by NAFDAC and SON varies, but here are some estimates based on recent data:
NAFDAC:
– 2020: ₦13.4 billion (approximately $34 million USD)
– 2019: ₦12.3 billion (approximately $31 million USD)
– 2018: ₦11.2 billion (approximately $28 million USD)
Contribution to GDP: NAFDAC’s revenue is approximately 0.01-0.02% of Nigeria’s GDP.
SON:
– 2020: ₦9.5 billion (approximately $24 million USD)
– 2019: ₦8.5 billion (approximately $22 million USD)
– 2018: ₦7.8 billion (approximately $20 million USD)
Contribution to GDP: SON’s revenue is approximately 0.008-0.012% of Nigeria’s GDP.
Note: These figures are estimates and may vary depending on various factors, such as regulatory activities, fines, and fees.
GDP percentage calculations are based on Nigeria’s 2020 GDP estimate of approximately $248 billion USD.
Please note that these figures might not reflect the current revenue and GDP contributions, as they may have changed since the last public update. For the most up-to-date information, refer to the agencies’ official reports or recent news sources..
22.ALLEGATIONS OF UNDER DECLARATION OWING TO UNRECIEPTABLE FEES, CHARGES AND SETTLEMENTS AT THE OPERATIONAL AREAS:
■. Allegations of unreceipted fees, charges and settlement around the operational activities of both NIMASA, NPA, NAFDAC SON, etc, it has been argued that the agencies under declare their real annual revenue generation to the government, as compromises is said to thrives unabated. It is alleged that money that goes into personal pockets in a year, are often twice the official declaration.
There is need to investigate this allegations under the marine and blue economy ministry.
23. SUMMARY:
The essence of this operational retrospect is to draw the attention of the Minister and the Ministry of Marine And Blue Economy on the reality of our port industry and the need to look inwards on the followings:
a). Take deliberate steps to correct the wrong image on the internet cum global perception that, Nigerian Ports are highly business unfriendly and expensive.
b). Take adequate measure to strike a balance between cost function charges on cargo and illogical charges which constitutes an exploitation of the shipping lines who in turn escalate such charges to the Nigerian Shippers, thus, multiplying the effects of the hyper inflation rate in the country.
c). Pursue a deliberate Ministry actions to engender competitiveness of our ports.
d). Review the present international shipping laws with a view to reform some sectors of the maritime (shipping) industry, especially, the need to review our incorterms application can not be over emphasized.
e). The Minister and Ministry of marine and blue economy must understand that, that the inherent potentials of our brown economy has not being fully tapped to a possible extents as possible, which would naturally open the curtains for a blue economy.
f). The Centre strongly believes that, if certain wrongs are corrected in the ports system, especially amongst the agencies, better revenue generation is sure.
g). In this regards, the Centre hereby offers doable suggestions to the Ministry in its part 2 of this 3rd quarter bulletin, as a guide.
Thank you for your attention.
Fwdr Dr Eugene Nweke Rff Fnis Fptm Ksm.
@ Head of Research, Sea Empowerment Research Center RGT
