December 19, 2018

Import license regime, cause of shipping cost differential — Nwokeoji

Import license regime, cause of shipping cost differential  — Nwokeoji

Immediate past Deputy National President of the Association of Nigeria Licensed Customs Agents, ANLCA, Emenike Nwokeoji, in this interview with Godfrey Bivbere before the the current crisis rocking the Association, spoke on the cause of shipping cost differential, port operation in Lagos and the eastern part of the country and other issues in the industry.


Why are importers around the eastern and southern parts of the country channeling the consignments to Lagos instead of the ports in their area?

And Lagos is a bigger market or the biggest market in the country. So it might be wrong to start comparing Lagos to any other market, so if we are looking at it from that angle.

But the market around Port Harcourt market, you have Aba and neighboring states that don’t have ports, are they supposed to access the Warri axis since its closer to get to their market from those ports in those areas. That is the perspective am looking at it when I said the cargo traffic is low.

Well I can say that it is not normal for an importer within this area to route their cargo through ports that are outside these zone having being blassed with kilometers of shore lines around. So looking at it from that angle, I think it is not normal something should be done.

One of the complaints is that it is cheaper to ship to Lagos then to ship through Port Harcourt or Warri or Calabar?

Yes it was something that came by accident before now; we have the same shipping rate all across Nigeria whether you are going to Calabar, Warri, Port Harcourt or Lagos. During the difficult period in the southern part of the country which made it difficult for a shipper to really muster enough cargo to fill a ship to Warri or Calabar or Port Harcourt.

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When you say difficult period, what do you mean sir?

There was a period we had import license, you need license to import goods so during the period as at that time, not everybody had the connection to get import license so cargo traffic into Nigeria dropped drastically. The companies were shutting down because of lack of raw materials, they needed import license to get their raw materials.

So because of that it takes longer time to load enough vessels coming to Nigeria. So during that period, the shipper’s device a means, if you are going to Calabar, Warri or Port Harcourt, they will now; say can we drop this cargo for you in Lagos and then they will say we will discount $300 or $400 for you. You drop the cargo in Lagos and then you can use that to take it to your destination in Nigeria. That was how the trade differential started. If you are going to Lagos they can charge you a thousand dollars but if you are to come to the east they will charge you a $1400.

Now that this problem has been sorted out long ago, who should ensure that it is corrected?

Shippers’ council

During your time as the National Deputy President, did you make any representation to Shippers’ Council on it?

Severally we did that, at a point you know all these is not only about politics it is just not beyond what it has been. The political angle of it is that some ordinary things came up we must admit that, one of them was the insecurity in the Niger Delta.

The vessels now needed to spend more money. Not even all Captains are prepared to come to Niger Delta because of the insecurity, so because of that instead of reducing the list to the minister, it added to it because they (shippers) are now paying for insecurity fees, Navy to escort the vessel in and out which is additional expenditure. So a whole lot of factors are responsible.

So what is the operation in the eastern port like? Is it as cumbersome, because in Lagos it is a bit cumbersome getting to where your cargo is staying, it’s very tough?

No, ours is a modern port.

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When you say ours, are you talking about Onne port or you are talking about Port Harcourt port?

Am talking about Onne port, Onne port is a modern port; almost everything is automated, so you do not need to get to the port. From the comfort of my office, I can make payments, track the cargo and position it without going to the port. You only go to the port to examine the cargo. If you walk into the office at the port, you can know the location of your cargo, you do not need to go and start tracing your cargo physically.

From the comfort of your office?

Yes, from the comfort of my office I can know whether the cargo has discharged in the port, or if it has been transferred to the terminal, I can view it from my office.

So, why is it difficult to do same in Lagos?

The situation in Lagos is just beyond cargo at per import; no doubt Lagos is the biggest market. Then what happened is that, if you remember when Apapa was built, it was built before the independence; have we improved anything. The answer is No, instead of improving; what we have succeeded in doing is encouraging more companies including manufacturers to come and share the little space that is available within the port.

So we now have people manufacturing in the port, that is not what that place was designed for. Even if they are to do that, the rail system by now supposed to have been moving up to 60 per cent of cargo out of the port. But now the rail system is totally collapsed, Tin can is not serviced by any rail system, meanwhile Tin Can is been taken over by manufacturers too.

So you have vessels coming in with all materials, you will have vessels coming to take finished products; you will have vessels coming for containers not to talk of vessels coming for the petroleum product. All these things were not there before now. The petroleum products have no business coming into Apapa or Tin Can; we are blessed with over 100s of kilometers of shore line. In areas like Epe, you can push the tank farm there; let the terminal at Tin Can be only for containers and maybe general cargos. So the space there cannot take the activity. Unless something is done to remove some of these things, the space there cannot take the activities that are coming from that po. The only thing that can save the situation is maybe the rail system.

Talking about the rail system, there was a suggestion made by someone that the current contract with Dangote for the reconstruction of the road from Apapa all the way to the Toll gate, a rail system should be included in it. Do you agree?

If we are serious and we have reached the level of our challenge, why should we give such a road to Dangote. How many roads have they built and commissioned in this country before now. And then why should that road be given to one company considering the urgency that is required. Over a year ago, they have been in Apapa. How many kilometers have they been able to construct.

I think they have completed that road and the road seems to be very solid.

They have completed it, how many kilometers. It is not very long. And how long did it take them to achieve it. So compare how long it will take them to achieve this one. What will it cost federal government to break it into three portions in order to get it delivered within twelve months.

But the agreement is that federal government is not dropping a dime for this work, Dangote will provide the funds or the construction and then whatever he spends will be subtracted from the tax he is supposed to pay to government.

Is that proper? If somebody owes government which means government has lost confidence in themselves that they can longer manage their resources. Why should a man owing you now be the one that will spend your money? Is that the proper thing to do? And apart from their tax, can we not pick other contractors for that very road, the most important economic road in this country with tank farm operations, imports etc. How many billions do Customs, NPA generate in a week from that port or the ports? So I do not know what that means, if they are not paying taxes so you now force them to build, then they will do it at their own pace.

No, is not that they are not paying, they pay tax. You are asking them to use their tax in advance, instead of bringing this money to government; they are using it to build the road.


They are saying if government builds the road. The budgetary provisions, allocations may delay it. So this system will be easy. The work will just continue streamlessly.

Yes, as far as I am concerned, that is not a tidy arrangement.

But sincerely, do you agree that the rail system whether it is Dangote or whosoever that is constructing the road, should rail be included in that reconstruction? To link it to the one going to Ibadan?

We have an existing track that has been out of use from Apapa. That has been worked on.

I am talking about from Tin Can.

My challenge here is that, what are we doing to solve this problem because when you are fixing that long stretch of road which will take so long and you now add rail system to it. Are you talking about 25 -30 years government plan?

The time frame for the completion of that road is less than two years.

Why must it be given to the same company? If you want to achieve it fast why not break it, it will even be in greater competition, so why must it be pushed to one person.

Let us go back to Port Harcourt port sir, what is the operation in Port Harcourt port like?

The Port Harcourt port, is suffering from one or a minor issue, like the channel with the low draft but you can still take some large vessel call at the port. Right now more cargos are coming there but the place is still seriously underutilized. You know it was sold in portions; some manufacturers took some and all the rest of them. But the area for general cargo is still been seriously underutilized but activities are there and it is slow.

We expect that all these ports should benefit from what is happening in Lagos, and gradually I think some people are coming to that realization that this port can be of immense help to them rather than going to get stocks in Lagos where you cannot check when their container will exist the port.

What about the problem of security in the area, we just talked about the extra cost to escort vessels. Is the situation still the same?

There is no place that is 100 per cent safe in the world, once in a while the pirate strike, not just in Nigeria; they strike all over the world. It is everywhere. So the case of piracy is once in a while, I mean nothing to compare to the international level of piracy.  It is an occasional thing, activities in the oil industry and oil field are still going on and all of them use the water way. That’s not a major issue.