Mr Johnpaul Ejiogu, a clearing agent in his late 30s, stood at the entrance gate of the Ports and Terminal Multipurpose Limited Port with confusion written over his face, on a sunny Monday.

His headache was how to clear a 2008 Mercedez Benz that just arrived in the country through the terminal for one of his clients.

Before the arrival of the car, Ejiogu had budgeted a certain amount for clearance of the car but he was disappointed that that same budget couldn’t get his car out of the port because the cost of clearing had gone up by a whopping 200 per cent.

Ejiogu lamented, “I am confused right now, I don’t know where to start, I had already charged the client to clear the car and now the duty is higher than what I bargained for. Now,  I don’t know how to convince him to add to the money.”

His case is further compounded by the demurrage he will have to pay if he fails to clear the car on schedule.  Ejiogu would then blame his misfortune on the weakening power of the naira against the dollar, which has significantly impacted the cost of clearing goods in the ports.

His case is not peculiar to him as many other freight forwarders and licensed customs agents operating in the nation’s maritime domain are struggling to survive under the forex unification and other stringent policies that have redefined the landscape.

A document obtained by The PUNCH from the Council for the Regulation of Freight Forwarding in Nigeria, an umbrella body for all the freight forwarders and licensed customs agents in Nigeria, showed that as of 31st December 2012, there were 1,924 registered agents, 516 registered corporate bodies and five registered associations with CRFFN.

Meanwhile, recent findings by The PUNCH, including information obtained from practising custom licensed agents showed that as of December 2023, the number of licensed agents and freight forwarders has reduced to about 7,000.

The challenges

The Nigerian maritime industry is estimated to be worth about $8trn, according to information from the nation’s Ministry of Transport. This is largely due to the high volume of cargo imported into the country, Nigeria being an import-dependent economy.

However, the country has failed to harness the potential of its maritime sector, which could be a major revenue source for the country that is in dire need of foreign exchange. Experts say the sector has continued to underperform due to unfavourable policies on the part of the government.

Despite the proximity of ports to their warehouses and factories, many local importers still ship their cargo to neighbouring ports to bypass bottlenecks created by some policies of the government at ports, reducing the revenue accruable to the nation.

The Head of research, of the Sea Empowerment Research Centre, Eugene Nweke, blamed inadequate physical development in the Nigerian Ports as the reason they are not attracting the needed revenues and cargoes.

He said, “You see, it is not as if the NPA is the one causing the problem. The problem is that we have not considered any physical development plans. Ports are not what you would build and abandon, it is what comes with changes. As far as shipbuilding comes with changes, ports also come with changes the same way product manufacturers repackage. That is why if you go to other parts of the world, they have what we call a clean port, that is a port that has not been developed, waiting for expansion.’’

A shipowner who doesn’t want his name in print believed that the potential of the country’s shipping sector has not been fully harnessed.

He said, “If the over $350m Cabotage Vessels Financing Fund contributed by ship owners to develop the sector is appropriately disbursed, the sector could be a major source of non-oil revenue.”

‘’However, the sector seems to be stagnant as the government has failed to disburse the funds, starving indigenous vessel owners the finance they need to be able to compete with their foreign counterparts.’’

Practitioners who are familiar with the operations in the nation’s maritime domain would attest to the fact that there has been a constant and steady drop in importation into the country occasioned by these challenges.

The immediate past president of the Shipowners Association of Nigeria, MkGeorge Onyung, said, “The maritime industry is all about talk and no action, everybody just wants to talk. Do you ask any question about IMO, you know that they met this year and nobody is talking about it. Nigeria is still not on the white list of IMO and no one is talking about it.’’

For some agents, these challenges could be traced back to the concession era where a lot of things like holding bays among others were not considered by the government before the concession agreements were signed with the concessionaires.

‘’This is the reason the issue of traffic gridlock on the port axis seems to have defiled all measures taken by the government to stem the ugly tide,’’  the concerned agents noted.

A licensed customs agent, Mr Decland Dinaobi, said, “We concessioned without taking into consideration the pitfalls of port concession. So, with that, the people are only money-conscious, they are less concerned about the developmental objectives of the ports. So, because of that, we see a situation where we have a port where you see only the structures but no efficiency and effectiveness. Any port that has not achieved effectiveness and efficiency is not moving forward.”

Dinaobi disclosed that a major cause of the low importation of vehicles through the nation’s ports to the introduction of the Vehicle Identification Number for the valuation of imported used vehicles in 2022.

“This move intended to ensure uniformity in duty payment especially for the clearance of imported cars of the same model, year, and make irrespective of the port it came in through. But sadly, the platform didn’t turn out the way it was expected as many imported vehicles were left un-cleared at the port due to a hike in duty occasioned by the platform,” he explained.

Importers of used vehicles were asked to pay a minimum duty for a 2013 model even when the vehicle was older than that, and the duty should be cheaper.

A resultant effect of the policy was the abandonment of imported vehicles by importers. On June 23rd 2023, when the Permanent Secretary, Federal Ministry of Transportation, Dr. Magdalene Ajani, led an inter-agency team comprising the Nigerian Ports Authority, Nigerian Customs and the Nigerian Shippers’ Council on an assessment tour of overtime cargoes littering the Ports, it was reported that there were about 7, 451 abandoned cargoes at Apapa, Tincan Ports and other terminals within the state and eastern port.

Data obtained by our correspondent showed that as of the reviewed period, there were 3,200 units of overtime cars and about 3,295 units of overtime containers respectively, while the eastern ports had a total of 956 overtime containers.

Now, aside from the fact that these cargoes were trapped at the ports and may eventually be forfeited if the importers fail to meet the conditions attached, the country lost revenue as duties that were supposed to be paid were not paid.

In May 2023, the Nigerian Shippers Council, which is the ports’ economic regulator, said that the sum of N2.7bn was saved in demurrages between 2020 and 2022.

The council in its newsletter called ‘Complaint Newsletter’, a periodic publication, said the fund could have been lost to shipping companies and terminal operators through demurrages, among others.

The NSC in the publication, said during the period under review, it recorded a total of 1,727 complaints.

Giving a breakdown of the figures, NSC said that 2021 had the highest figure of complaints by shippers with 666 cases handled and N2.5bn recovered on behalf of the trading public in the year.

“Similarly, a total of 648 cases of complaints were recorded in the year 2020 despite the coronavirus pandemic, with N57m recovered. In 2022, a total of 413 cases was recorded, which was a clear indication of a sharp drop in complaints by the trading public, with a sum of N204m recovered on behalf of shippers and freight forwarders. Some of them are excessive charges while some are demurrage or container deposit refunds among others. Some are also on damages of cargo,” the report stated.

In 2022, precisely, the first quarter, the National Bureau of Statistics, said that Nigeria witnessed a decline in total capital importation, dropping to $1.03bn from $1.5bn in Q2 2022, marking a 32.90 per cent decrease.