Maritime: FG’s lack of interest sparks ISAN concern

Secretary General of the Indigenous Ship-owners Association of Nigeria (ISAN), Capt. Dada Labinjo has expressed concern over federal government’s lack of interest in the fortunes of the maritime operators.

The ISAN boss made this known recently in Abuja, pointed out that while trade facilitation suggests a need for reduced cost for improved service delivery, government’s transaction costs has made this an impossible goal in Nigeria.

He noted that there were two basic costs that operators must contend with, the costs from the side of Government has remained a major stumbling block to growth, since they were arbitrarily fixed and remained most difficult to bend.

According to him, “There are two types of transaction costs. One type is based on Governmental regulations and/ or procedures; and the other type is based on contracts between private companies. Government related transaction costs include Customs duties, customs inspection, port charges and port storage.”

“Transaction cost based on commercial contracts include freight, marine insurance, handling charges, drayage and Letter of Credit (L/C) commission. According to UNCTAD estimates, transport charges are between seven percent and 12 percent of import value.” “Compared with the costs based on contracts between private companies, government related costs are not easy to reduce.

This is because there is no market mechanism involved” he disclosed while highlighting the need for policies that encourage.  He further noted  “How can I effectively compete with foreign ship operators who obtained their loans at two and a half percent, when I have to source for same facility here at 40 percent interest rate? There is no encouragement from the vital quarters.”

“There is no incentive. And it is only in Nigeria that indigenous ship operators still pay for anchoring outside the ports.” he observed.

He also pointing out that it was for this reasons that over 500 ships had taken solace, far away from the prying eyes of security agencies, even at the risk of their becoming vulnerable targets for hoodlums.

Meanwhile, the Comptroller General of Customs, Alhaji Dikko Abdullahi has identified weak legislation and weak penalty as challenges which must be overcome, before the country could expect increased honesty, from importers and the agents, in the operations of the international cargo regime.

The CGC in a paper read by Deputy Comptroller Olalekan Olusegun Dada particularly noted that while cargo facilitation has increased in value and essence, its governing laws have remained unchanging; and thus gradually grown incapable of compelling operators’ obedience.

“Maximum penalty for underpayment is N600. This is what has been in place since 1958” observed the CGC, noting that there was also a seemingly lack of political will to make necessary changes.

Other challenges he also identified were insincere declaration by importers/ agents, which he said ranged from over invoicing, under invoicing, description to concealment; multiplicity of government agencies with direct intervention in the clearance process, particularly as it affects physical examination, undue interference through blackmails to bend the rules, inadequate cargo handling equipment at terminals, inadequate coordination between governmental agencies and the general lack of trust between the private and the public sectors.