ports revenue

N538bn ports revenue shows private sector can generate more for govt

by with No Comment Business

N538bn ports revenue shows private sector can generate more for govt

The Nigerian government is in dire need of money, and while it remains uncomfortable with letting the private sector run its business interests, evidence points to the need to let go.

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Allowing private capital to stimulate the economy as seen in recent developments from concessioned ports can generate more money for the government than it can do on its own.

Last week, the Bureau of Public Enterprise (BPE) said that private sector fiscal contribution to the port and the Federal Government increased to over N538 billion within 11 years of port concession from 2006 to 2017.

These were monies collected from commencement fees, lease fees, throughput fees, tax payments by the concessionaires as well as revenue put into infrastructure development, and investment on equipment.

A breakdown of the revenue shows that the Federal Government collected N5.68 billion as commencement fees, N196.48 billion as lease fees, N61.45 billion as throughput fees, N67.77 billion as tax payment while the private entities investment in infrastructure and equipment stood at N66.6 billion and N139.9 billion, respectively.

Jonathan Nicol, president of the Shippers Association of Lagos State, reiterated the need for the private sector to take the lead in various sectors of the economy.

He called on the government to take advantage of private sector financing in building infrastructure, especially at this time when the financial capability of the government is dwindling due to unstable prices of crude oil, Nigeria’s mainstay.

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Nigerian exports

Businesses to lose over N55bn as ports halt exports

by with No Comment BusinessNews

Nigeria is desperate for foreign exchange, yet businesses that should be contributing towards earning dollars, in particular, will be losing at least N55 billion ($142m) within the two weeks the country’s seaports in Lagos will not be allowing exports trucks.

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While the country’s non-oil exports for 2020 stood at N1.43 trillion, it averaged N27.5 billion on a weekly basis; in a year trade was significantly down, according to data from the National Bureau of Statistics (NBS). For two weeks, it comes to N55 billion.

However, trade is expected to recover this year as economies recover from the COVID-19 pandemic and N55 billion is at best a conservative estimate that is likely far from what the economy, and in particular, businesses would lose.

In 2019, when trade was better, non-oil exports had a value of N2.51 trillion and if trade this year, as the global economy is gradually rebounding, is as good as 2019, then the losses over the two-week period could even be starting at N96.8 billion ($251m).

“It was abrupt,” said Ibukunoluwa Akinrinde, technical anchor of the NESG Trade, Investment and Competitiveness Policy Commission. “If prior to now, the NPA for reasons best known to it, did not sound the alarm it wanted to halt exports.”

One month to that time, the NPA should have created awareness, with a date it was going to embark on this action, he explained, saying, “Arbitrariness of decisions is part of what affects investors’ confidence.”

Arbitrariness like this see businesses getting their fingers burnt. Those prepared for exports such as through the Sea Link Project could do short cargo movement within two weeks to arrive the destination. Those required for use within a month after which they may no longer be in conditions suitable for what they are needed will now get hurt, leading to colossal losses.

Suspension of export trucks by the ports authority, apart from the value of export goods now stranded, would also see exporters incurring demurrage and detention fees.

Those who had dispatched trucks laden with goods would have to pay the cost of those trucks staying put till delivery can be done at the cargo exports terminals.

To have the shipments returned till the NPA gets its acts right would also mean paying for the goods to be returned to wherever they may have come from in Nigeria.

Anyway it is seen, businesses are bound to lose, and big too.

“In export, once you sign an agreement with the buyer abroad and it takes you two weeks or months to access the port and there is rejection, it becomes double tragedy,” John Isemede, a consultant on Export Value Chain to United Nations Industrial Development Organisation (UNIDO), told BusinessDay. “This is because those goods still have to be brought back to Nigeria. It is like collecting a corpse from the mortuary.”

This indicates yet another casualty of this decision as previously highlighted by BusinessDay. The sanctity of contracts will be broken by many exporters, not of their own doing, but because the port administrators decided to truncate their sources of livelihoods on the back of poor planning.

From different parts of Nigeria, trucks carrying products in export containers are on their way to the Lagos ports. Those who have paid for goods to be transported on those trucks will now have to bear additional costs and shipping lines are expected to charge the export demurrage and detention fees, respectively.

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SON Ports

AfCFTA: SON seeks return to port

by with No Comment BusinessNews

The Director General of Standards Organisation of Nigeria (SON), Malam Farouk Salim, has urged the Federal Government to allow the agency return to the nation’s ports. Salim made the call in an interview with the News Agency of Nigeria (NAN) on Thursday in Abuja.

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He explained that the move would help the organisation to effectively check the influx of substandard products into the country as trading progresses under the African Continental Free Trade Area (AfCFTA). The DG’s call is coming after a decade of the eviction of several government agencies from the ports, following what was seen as ‘a proliferation of agencies at the ports.’ NAN recalls that Dr Ngozi Okonjo-Iweala, the then Minister of Finance and Coordinating Ministers of the Economy, had in 2011 announced the eviction of the agencies. She said the decision was to fast-track port processes at a time the ports were battling congestion, delays in cargo clearing, which were hindering the ease of doing business policy. However, Salim said for Nigeria to effectively curb the influx of substandard goods, especially as trading under the AfCFTA continues, the SON workforce should be allowed to return to the ports. “We are supposed to ensure that the borders and the ports are monitored properly, and in doing this we protect the country from substandard goods. “One of such ways is to make sure that the employees of SON are in the port of entries in the country, especially the Lagos port where majority of goods comes into this country. “Our people can be efficient if we are allowed to work at the point of entry of these goods, but right now we are not allowed at the ports. “They allow us once in a while to check goods but that should not be the way, because SON as an organisation should not depend on the kindness of other organisations to do its work. “The 2015 Act, Section 7(30b) says the Standard organisation must be at the port of entry into this country,” he said. The DG noted that although there were other agencies of government at the ports, SON has the statutory obligation and the knowledge to identify substandard products. He said if SON was given a permanent access for inspection and enforcement of standards at the ports, the menace of substandard goods in Nigerian market would be greatly reduced. He however noted that the organisation was currently enjoying cordial working relationship with the Nigerian Customs Service and other sister agencies at the ports. “What NAFDAC and the Customs are doing at the ports are totally different from what SON does. “We get along with them very well but we don’t need to depend on them because we are supposed to be in the ports by right, except if the law is changed.

“One of the problems we are having for not being officially allowed into the ports is the inability to provide ordinary offices for our employees. “A typical example is in Port Harcourt where our officers are now squatting with various offices, and every now and then the persons they are squatting with have asked them to leave. “We requested for a space to build our office but we were told we will not be allowed, so we could not build a property befitting of our organisation for our staff,” he said. Salim explained that the SON currently has 42 offices across Nigeria, with 1,700 employees. (NAN)

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