Stoppage of fuel subsidy payment, ban on cement dip imports by 7%

on   /   in Finance 12:39 am   /   Comments

By Godwin Oritse

FOLLOWING the stoppage of subsidy payment to importers of petroleum products by Federal Government as a result of the petroleum subsidy scam, and the ban on the importation of cement and rice into the country, the volume of cargo and  number of vessels that sailed into the nation’s seaports in 2012 dropped by 7 percent when compared to 2011. Official figures presented at the mid-year report of the Transport Ministry showed that a total of 77 million tonnes of import was recorded in 2012 as against 82.8million metric in 2011.

According to the report which some government officials are attributing to the success of the current transformation programme of the federal government between 2009 and 2011, there was a steady increase in the volume of imports until 2012 when the graph started nose diving. In 2009, the volume of cargo throughput showed that 66.9metric million tonnes of imports were recorded from ports across the country, while 75million metric tonnes of imports were recorded in 2010. For 2011 and 2012, 82.8 and 77 million metric tonnes of imports, respectively, were also recorded, an indication that the ban on cement and the subsidy scam were responsible for the drop in import volume.

A breakdown of figures sighted by Vanguard in the mid-term report of the transport ministry showed that most of the nation’s imports came through the premier port in Apapa quays with a total volume of 21million metric tonnes in 2012, 23.4million metric tonnes in 2011, 22million metric tonnes in 2010 and 21.1million metric tonnes in 2009. The figures also showed that while a total of 15million metric tonnes came in through the Tin-Can Island port in 2012, 15.4million metric tonnes was recorded at the port in 2011, 13million metric tonnes in 2010 and 14.1 million metric tonnes in 2009. For the oil and gas free zone in Onne in River state, 27million metric tonnes and 26.2 million metric tonnes were recorded in 2012 and 2011 respectively, while 2010 and 2009 saw imports stood at 23.3million metric tonnes and 17.5million metric tonnes.Subsidy-Incorporated

The port in Calabar Cross River state had the lowest records of imports as only a million metric tonnes came into the country through Calabar in 2012 as against 1.9million in 2011, 1.6million in 2010 and 1.7million metric tonnes in 2009. There was also a decline in the imports that came through Delta ports as only 7million metric tonnes came in 2012, 8.5million in 2011, 9.1million in 2010 and 7.3million metric tonnes in 2009. “Drop in 2012 is attributed to the ban on importation of bulk cement and the challenges in the era of subsidy payment for petroleum products importation”. The report stated.

Besides the drop in imports, there was also a drop in the number of vessels that called at the nation’s ports last year. The figures also showed that while 4,868vessels called at the various ports across the country in 2012, the 2011 figure stood at 5,327, as against 4,962 and 4,620 in 2010 and 2009 respectively. Lagos area ports recorded the highest number of vessel call with a total of 1,609 at the Tin-Can Island port, Calabar port again recorded 159 vessel calls in 2012 respectively.

The issue of ship traffic was not left out in the entire statistical data report as there was a steady rise in the number of large vessels that called at the various ports between 2009 and 2011 until 2012 when a decline was experienced with a total Registered Gross Tonnage (GRT) of 121million metric tones as against 122.8 in 2011.

Speaking on what could be responsible for the downward trend of imports into Nigeria, the National President of the Association of Nigerian Licensed Customs Agents (ANLCA) Alhaji Olayiwola Shittu told Vanguard that some factors can be attributed to the current trend noting that government’s economic policies with stringent guidelines is one major reason Nigeria is experiencing the low level of import. Shittu noted that the stringent guideline has made importers to bring contraband with a view to beating the system. He explained that the emergence of some powerful shipping lines is also one factor that led to the situation as these shipping firms now buy mega vessels to carry large volume of imports, to the disadvantage of the smaller shipping firms. These shipping companies, which he says are three in number, determine the pattern of trade and sometimes control the freight rates for shippers.

The ANCLA president said the trend could also be attributed to the large volume of contraband currently stocked at the port, adding that when importers cannot take delivery of whatever imports they have brought into the country, how will they sell and import again. Another stakeholder in the maritime industry, Mr. Lucky Amiwero,  agreed with Shittu, but added the issue of security as another major reason that has affected the rate of importation. He noted that as a result of the current security challenges in Nigeria, ports of neighbouring countries are now taking over trans-shipments that were destined for Nigerian ports.

“Most of our trans-shipments are taken over by other countries due to the security challenges confronting Nigeria” he added. Amiwero also noted that the cost of doing business at the seaports has taken importers to the border posts where duties are cheaper than in the ports. The issue of economic measures that government has put in place is another major factor that has put restriction on importation

“For example, the restriction on rice import has reduced the importation of the commodity and this trend will continue until more import friendly measures are put in place to encourage importation”. The logistics expert also attributed the low level of imports to the undefined import procedure. According to him, the procedure as it is does not encourage trade. He explained that for trade to be facilitated, it must be consistent, predictable but that is not the case in Nigeria.

In his own view, Alhji Mikky Okunola said that the level of downward trend of import can be attributed to the current transformation going on across the country, noting that government departments and agencies are putting in place one form of transformation or another.

“When a country goes through changes, it comes with all sorts of things. One of such things is the reduction in import we are currently experiencing. People who ordinarily take risk before will have to do a rethink before they stake their monies into any business,” Okunola said. He explained that most importers who would ordinarily take the risk of importing anything they like, now sit back to do a rethink before they take the plunge. Even the banks are not left out because they are cautious with the kind of loan they give and to whom they give it.”

Maritime analysts however agreed that the low level of imports can also be attributed to the general downturn of the world’s economy, adding Nigeria is not the only country affected in this. They said that the global economic down turn has affected the global trading system, hoping that it is hoped that the trend will change in the course of the year.

    Print       Email