Our MD/CEO, Former National Secretary, Association of Nigerian Licensed Customs Agent (ANLCA) Otunba Babatunde Mukaila had an interview with Assistant Editor Oluyinka Onigbinde of Shipping Position Online says terminal operators and shipping lines account for major cost leakages in cargo clearance. He also calls for transparency in port charges, processes and infrastructure development.
Absolutely. It will reduce the cargo congestion and pressure on
the Western ports. Just as you mentioned, this has been put on the
table more than 10 times. I want to believe that this time,
because of the election fever and the fact that the government has
a lot of resources at its disposal, they may want to match what
they have been saying with action.
If that eventually happens, it will reduce the pressure on the
Western ports. I find that there is easy access from the Eastern
ports towards the northern part of the country. A lot of
containers and export cargo that I handle move from Abuja to Port
Harcourt.
So, I see a lot of pressure being reduced from this part of the
country. The Eastern ports will become very busy hubs if they are
properly developed. You can see that some activities are already
picking up there.
In a nutshell, it is going to be a game changer. The pressure on
Lagos can be reduced significantly.
I still want to believe that it is about the political will of the
government. The structure of the Eastern ports is not something
that was created recently. Even the main ports have become
obsolete, and there is little or nothing happening in some of
them. The problem is basically the deficit in port infrastructure.
That infrastructure deficit is affecting the performance of the
Eastern ports.
The last time I visited, I saw some changes, but much more needs
to be done, especially with the access roads and the truck call-up
system. The call-up system has become a protracted issue. For
reasons known to the practitioners there, it has not worked
properly as it does in Lagos.
But, all in all, I believe it comes down to the willingness of
government to put its foot down and ensure that the necessary
things are done.
Look at Calabar. It is open to other countries. We also have
superstructures and oil-related industries around Calabar. I am
not sure they are functioning optimally because of the
infrastructure deficit at Calabar Port.
A whole lot needs to be done. The Eastern ports need to be opened
up and developed. Healthy competition between the Eastern and
Western ports will, in the long run, give Nigeria a better
performance index and better value.
The most important thing people are not taking note of is that the
leakages revolve around terminal operations and shipping lines.
Our focus is always on Customs.
Customs has been able to stabilise and modernise its processes. If
you are ready to comply, you will find it relatively easy to go
through the Customs process.
The real challenge is the lack of capacity within the terminals
and the port environment. A lot of inland activities are also
contributing to the problem.
The modern port system is still not efficient, and we have a whole
lot of inland container terminals whose priority appears to be how
to collect charges and make money, rather than service delivery.
That is where the real problem lies.
Cargo delivery has been segmented into different processes. You
have the pre-arrival processes, arrival processes, cargo delivery
and exit processes, and then post-clearance processes. These were
all meant to facilitate trade.
But you cannot complete the arrival process with Customs when the
shipping line has not completed its own part of the process.
There is a lot of confusion. In some cases, shipping lines change
their charges several times. You cannot plan with the importer or
trucker anymore.
All these are leakages and wastefulness, and eventually, the cost
is passed on to the consumer.
For instance, you need a cargo manifest before you can generate
your pre-arrival assessment report. But shipping lines are
sometimes not ready to provide the necessary information because
of their own arrival protocols.
Then you have the terminal operator, who is expected to position
the container for Customs examination. When the importer is ready,
the terminal should also be ready.
There are so many processes involved, including examination and
withdrawal of cargo. If you are not careful, a container can be
moved from one location to another before the importer eventually
clears it. All these things add to the cost.
Let me give you an example. If my container landed at a terminal
located within the port premises and I am told the charge is about
N790,000, you then discover that moving the same cargo from one
point within the port to another can attract another significant
charge.
Sometimes, it is practically as if you are taking the container
from the vessel, dropping it somewhere and then paying again to
move it to another location. There are a lot of issues around
pricing.
Even for small cargoes, say two or three cubic metres, what we
call less-than-container-load cargo, you have different charges
from the shipping line, terminal and other service providers.
Nobody really knows the full cost line.
You can have different charges from terminal to terminal and
different charges for the same type of container. That is why we
need transparency in the entire cost structure.
Customs will tell you that Nigerian shippers are not truthful. But
Customs now has, ( I believe it has), the capacity to determine
the correct value using the five valuation principles recognised
globally. The problem still persists.
I believe the present crop of Customs administration we have in
Nigeria is one of the most capable we have had. I may be wrong,
but from my experience, they remain capable of helping us advance
towards a best-practice environment.
I believe the leadership is showing that it really wants to help
the Nigeria Customs Service compete globally and is willing to do
its best to achieve that.
I don’t see why we should still have a Customs officer telling an
importer to simply take a particular price and use it when the
Nigeria Customs Service has the capacity to determine the correct
value.
First and foremost, all associations need to be strong. It is in
the interest of those who want to take advantage of the processes
in the port environment that the associations remain weak.
What is the purpose of an association? Simply put, to me, as a
student of advocacy, there is nothing more important than
advocacy.
Advocacy on behalf of members, advocacy on behalf of Nigerian
shippers who are supposed to be our principals, and advocacy on
behalf of the country itself. We need to learn how to represent
our image properly.
If we have people who lack the requisite knowledge leading an
association, then the advocacy is lost. I have said in the past
that ANLCA has been the lead agent. We need to do more. I want to
see an ANLCA that operates the way it used – to going in and out
of the National Assembly and tackling bills before they become
Acts.
In the last three years, I am not sure I have seen sufficient
representation, whether from ANLCA or other freight forwarding
associations.
Too often, it is when the soup is already cooked that the
associations want to raise their hands and say, “Let’s discuss
it.” We have gone past that level.
I will leave that for posterity to judge.
Just as you said, ANLCA that I knew and served was deeply involved
in advocacy. I have already told you that the purpose of any
association is advocacy.
None of the associations appears to have the level of
communication presence that the Nigeria Customs Service now has.
Customs is updating information every day and responding quickly
to issues in the online media.
How many times have you seen an advocacy issue where an
association invites journalists to come and cover it?
There is no more advocacy.
Suddenly, they invite you to parties. They invite you to press
conferences and issue press releases. Where is the advocacy? Where
do you see the exchange of ideas?
I don’t want to say it should become an argument between an
association and a government representative, but there must be
engagement.
All associations need to think backwards and understand that an
association is more than carrying a name. It is about service and,
importantly, advocacy.
ANLCA or any other association should not just be about being
close to the port, going into the port and coming out of the port.
There are too many things an association can do to improve the
trade.
I was in Uganda for a conference and I saw something interesting.
Uganda Customs has a laboratory. They have chemists, physicists
and other professionals working there.
It is not just about arguments from an air-conditioned office. If
there is a dispute over a product, they can take it straight to
the laboratory and conduct the necessary analysis.
I don’t know where there is a Customs laboratory in Nigeria that I
can simply drive into and say, “I want a critical analysis of this
product.”
A lot of money is being wasted because of this.
I would like to see a standard laboratory established, preferably
within or accessible through the Nigeria Customs Service, where
disputes can be resolved through scientific analysis.
That would help to separate issues when arguments arise.
Where is the go-to institution when I have a dispute?
For instance, if Customs says I should pay $10 million and then
changes the assessment to $15 million, where is the mechanism that
protects me while the dispute is being resolved?
At present, I may be required to raise the $15 million and lodge
it with a bank as a guarantee while the argument continues.
If I cannot raise that $15 million, then the Customs position
becomes very difficult to challenge.
There has to be a better mechanism for resolving such disputes
without putting the importer under unnecessary financial pressure.
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