Arbitrary charges make Nigerian ports world's most expensive: importers

NIGERIA importers are calling for regulation of terminal operators to police the increasing number of arbitrary charges from concessionaires resulting in the high cost of goods and services.

This has made Nigerian ports the most expensive in the world as fees reap NGN817.2 million annually (US$5.17 million) from seaports with last year's containers reaching 817,246 TEU. Charges will raise NGN115.7 million on automobile transactions fees based on the rate of 231,423 cars imported in 2011. Dry bulk cargo is expected to produce NGN46.5 million to NGN12.9 million in annual revenue.

Before licensing concessions, importers paid a seven per cent port levy for infrastructure improvements, said National Association of Government Approved Freight Forwarders president Eugene Nweke. Now this is paid as a pay valued added tax (VAT) to Nigerian Customs Service, shipping companies and in some cases banks.

"To make matters worse, freight forwarders and importers are compelled to pay demurrage on containers for the numbers of days containers remain at the port, even when there is system breakdown caused by the service providers," Mr Nweke said.

Importers used to pay for terminal handling charges, container cleaning charges, manifest amendment upon request by an importer, container deposit (refundable) and container demurrage. But now this encompasses scanning fees, logistics for scanning to customs examination fees, labour charges, terminal handling charges, import delivery and shipping agency fees to documentation fees.

Port regulations should be established by a separate agency such as the telecommunication sector's National Communication Commission (NCC) to prevent tariff headings outside of approved charges, said Mr Nweke.

The problem is not new, said Nigerian Shippers' Council (NSC) executive secretary Adamu Biu, who said charges have been "spiralling since 1997" creating a skewered system where terms of tariffs are rarely abided by. Adding that a review was needed to devise a "harmonised tariff regime".

The Council for the Regulation of Freight Forwarding in Nigeria (CRFFN) hope to create NGN1 billion from cargo at seaports, airports and land borders. The CRFFN officers are to be dispatched to the ports in Lagos of Apapa, Tin Can Island and Lily Pond ports in Lagos to collect charges.

Nigerian federal government has given the green light to collection at charges of NGN0.15 kobo (Nigerian cent) per kilo for air cargo, NGN1,000 per TEU and NGN2,000 per FEU. The rates also include cars/jeeps, NGN500; trucks or a TEU, NGN1,000; trucks or a FEU, NGN2,000; general cargo, NGN3.50 per ton; and dry bulk cargo, NGN1 per ton.

CRFFN chief executive officer Mike Jukwe said use of cargo manifests will track compliance: "Only registered and inducted freight forwarders and accredited institutions are allowed to practice forthwith, or else, the hands of the law will grip and prosecute offenders."

Untaxed goods without necessary tariffs has flooded the market through land borders because of the cost to Nigerian importers, preferring to ship through neighbouring ports for goods such as cars, clothes, rice and frozen chicken.

A commercial regulator is a must, said Nigerian Ports Consultative Council chairman Otunba Kunle Folarin in order to avoid over-priced goods and services, but the job will not be easy.

"In a single invoice you find 20 activities listed and charged-discharging and offloading; offloading and loading; equipment charge; labour positioning for Customs examination; so many administrative charges; whereas all these charges can be articulated, they are related to a function."