October 26, 2016

Ports: LCCI proposes policy to block N1tr revenue leakages

Yusuf, LCCI DG

Muda-Yusuf, DG LCCI

By Franklin Alli
THE Lagos Chamber of Commerce and Industry (LCCI)has proposed measures that will save the country N1 trillion revenue leakages at the ports within the next 12 to 18 months.

LCCI also said the measures if implemented will generate10, 000 new jobs in the maritime sector, and 800,000 jobs in the industrial sector over 18-24 months.

Vincent Nwani, Director, Research, Advocacy & Entrepreneurial Development LCCI, unfolded the measures on the occasion of Private Dialogue on Port Efficiency and Maritime Sector Roadmap jointly organised by LCCI and Financial Derivatives Company (FDC).

Nwani, who spoke on ‘Nigeria: Reforming the Maritime Ports,’ said: “ We believe that the following short to medium term reforms/policy measures are capable of setting the Nigerian Ports on a new path of progress:

“ Integrated advanced cargo ( Nigeria Customs Service , NCS systems, integrated scanning and tracking including weigh bridges;  establishment of a national valuation database that should be readily accessible to all agencies, operators and stakeholders at all times to eliminate inherent abuses.

Establish and run an efficient Port Community System Window for the reduction of multiplicity of agencies by the creation of a one stop clearance and payment desk. Reduce the number of government departments and agencies at the ports from 14 to 6; promote private sector ports investment to improve ease of port activities as in Japan, Malaysia and Philippines.

He noted ‘“In Japan the private sector is allowed to lease and develope berths for ocean carriers, who equip and manage these berths in line with their own needs.  Philippines in 1988 handed over the management of Manila‘s International Container Terminal to a private holding group. Since then, the private sector has expanded into port financing and management to cover more local ports and maritime transport related services.”

According to him, “Nigerian ports are currently placed at a backward position on global ranking. It contributes 1.0 percent to GDP compared to China where the maritime sector contributes 9.6 percent to GDP, Brazil 5.5percent; Russia 5.3 percent, India 5.2 percent South Africa 1.6 percent.”

He reeled out the current challenges  at the ports to include: “Multiplicity of security agencies such as Police units, State Securities Service, NDLEA, etc, and ethical issues of some MDAs officials that continue to fuel illegal charges and personal demands from port users. This he said is compounding  the already high cost of doing business at the Nigerian ports.

“The port continues to face acute lack of modern or functional technology infrastructures such as process automation, valuation data base, surveillance equipment tracking systems and integrated process systems. This places the Nigerian ports at a backward position in global ranking.

Sustained inefficiencies at the Nigeria ports continue to take its tolls on businesses and the larger economy. As a consequence, businesses are shrinking, closing down or running far below installed capacity with implications on trade flows and GDP.”he said.

Obstacles and  roadblocks

Responding to the issues, Dr. Jumoke Oduwole, Senior Special Assistant to the President on Industry, Trade & Investment (Office of the Vice President),   said: “The Federal Government is, therefore, relentless in its goal of removing the obstacles and roadblocks that have long bedeviled commercial activity in Nigeria.

Our vision is a dramatic improvement in Nigeria’s business environment over the next three years, with increased cross-border trading, increased productivity across key economic sectors and an improved business environment that is attractive to both domestic and foreign investors.

“Under this Administration, our broader goal is to implement reforms that will be visible not merely in our numerical rankings, but in the stories and testimonials of business owners and entrepreneurs across the entire country.

Earlier this year, President Muhammadu Buhari established the Presidential Enabling Business Environment Council (PEBEC), and it’s supporting Enabling Business Environment Secretariat (EBES).

The PEBEC leads the reform project that will help Nigeria achieve our aspiration and is to report to the Federal Executive Council on a monthly basis. PEBEC is chaired by His Excellency, the Vice President, and the Honourable Minister of Industry, Trade and Investment serves as Vice Chair. PEBEC is comprised of 9 Honourable Ministers, the Head of Service and CBN Governor. PEBEC meets frequently to provide coordination across the implementing ministries and debottleneck challenges.

Reform efforts at the Ports is focused on deploying a deliberate, well though through automation strategy that achieves the tripartite objectives of blocking revenue leakages, improving process efficiency and reducing human intervention.

It is noteworthy that since the automation efforts started in 2012, revenue at the ports has grown by over 25%. Actual revenue has increased from N57 billion in 2005 to N184 billion in 2015.

However, the Federal Government is not merely concerned with revenue generation in this area.  We are convinced that thousands of jobs and shared prosperity can be created from a strategic development of the Maritime Sector. Therefore, the government is committed to creating an enabling ecosystem for the various stakeholders in the sector to maximize their potentials and grow their capacities.

One of the key reform areas that have been prioritized by the EBES is trade facilitation and trading across borders.  Ongoing reform initiatives include:  “Implementing an efficient ‘Single Window’ system, and harmonisation of operations at the ports; the resumption of 24-hour port operations is starting with Apapa Port, assignment of dedicated export terminals for the exportation of agriculture produce and comprehensive and accurate capture of tracking information on all goods arriving and departing from Nigeria,” she said.