By Eugene Nweke
The following study and comparisons was undertaken with the aide of artificial intelligence is aimed to guide and provide a clear understanding with respect to our maritime industry performances within the region. This modest is divided under the following subheadings so as to capture and provide requisite information as possible for the understanding of the industry administrators.
Nigeria Ports and the Burden of Cost and Efficiency
■.Nigeria’s ports are often categorized as one of the most unfriendly ports in the continent and the world due to various challenges and inefficiencies, including:
1. Congestion and Delays: Long waiting times for vessels to berth and clear customs, though with improvements, but it is still concerns.
2. Corruption: Widespread bribery and extortion by officials and other stakeholders.
3. Inefficient Processes: Some ports still observe manual and cumbersome procedures, leading to delays and errors.
4. Lack of Infrastructure: Inadequate facilities, equipment, and maintenance.
5. Security Concerns: Theft, pilferage, and damage to cargo.
6. High Costs: Excessive charges, fees, and levies.
7. Bureaucratic Hurdles: Complex and time-consuming regulatory requirements.
8. Lack of Transparency: Unclear and inconsistent application of rules and regulations.
9. Inadequate Technology: Limited use of modern technology for efficient port operations.
10. Poor Management: Ineffective leadership and management structures.
These challenges lead to increased costs, reduced competitiveness and decreased investor confidence, ultimately affecting Nigeria’s economy and trade.
Various reports and indices such as World Bank’s Doing Business Report; World Economic Forum’s Global Competitiveness Index; and the African Development Bank’s African Ports Performance Index have consistently ranked Nigerian ports as among the least efficient and most unfriendly in the world.
2. Effects Of Comparative Higher Total Cargo Clearance Between Nigeria and Other Ports Within The Region
■. Estimates suggest that the total costs of cargo clearance from ports in Nigeria are significantly higher compared to other West African ports. Here is a rough breakdown:
Nigeria:
– Clearance costs: $1,500 – $3,000 per TEU (Twenty-Foot Equivalent Unit)
– Demurrage and storage: $500 – $1,000 per TEU
– Transportation and logistics: $500 – $1,000 per TEU
– Total: $2,500 – $5,000 per TEU
Ghana:
– Clearance costs: $500 – $1,000 per TEU
– Demurrage and storage: $200 – $500 per TEU
– Transportation and logistics: $300 – $600 per TEU
– Total: $1,000 – $2,100 per TEU
Côte d’Ivoire:
– Clearance costs: $400 – $800 per TEU
– Demurrage and storage: $150 – $300 per TEU
– Transportation and logistics: $250 – $500 per TEU
– Total: $800 – $1,600 per TEU
Republic of Benin:
– Clearance costs: $300 – $600 per TEU
– Demurrage and storage: $100 – $200 per TEU
– Transportation and logistics: $200 – $400 per TEU
– Total: $600 – $1,200 per TEU.
3. Factors Promoting High Cargo Clearance Costs in Nigeria Ports:
■. Note that these estimates may vary depending on factors like cargo type, volume and shipping lines. However, they give an indication of the relatively high costs associated with cargo clearance in Nigerian ports compared to other West African ports.
The high costs in Nigeria are largely due to:
1. Higher clearance costs and fees
2. Longer dwell times, leading to increased demurrage and storage costs
3. Inefficient transportation and logistics systems
4. Corruption and unofficial payments
These costs can make Nigerian ports less competitive and may discourage investors and shippers from using them.
4. Breakdown of Comparative Charges to Buttress the Burden of Higher Cargo Clearance Costs in Nigeria Ports:
■. Nigerian port charges are generally considered to be higher compared to other ports in the West African region. Here is a rough breakdown of the charges:
– Ship Dues:
– Nigeria: $15,000 – $30,000 per vessel
– Ghana: $5,000 – $10,000 per vessel
– Côte d’Ivoire: $3,000 – $6,000 per vessel
– Republic of Benin: $2,000 – $4,000 per vessel
– Cargo Dues:
– Nigeria: 5% – 10% of cargo value
– Ghana: 2% – 5% of cargo value
– Côte d’Ivoire: 1.5% – 3% of cargo value
– Republic of Benin: 1% – 2% of cargo value
– Environmental Levies:
– Nigeria: $1,000 – $2,000 per vessel
– Ghana: $500 – $1,000 per vessel
– Côte d’Ivoire: $200 – $500 per vessel
– Republic of Benin: $100 – $200 per vessel
– Wharfages:
– Nigeria: $1,000 – $2,000 per vessel
– Ghana: $500 – $1,000 per vessel
– Côte d’Ivoire: $200 – $500 per vessel
– Republic of Benin: $100 – $200 per vessel
– Pilotage:
– Nigeria: $5,000 – $10,000 per vessel
– Ghana: $2,000 – $5,000 per vessel
– Côte d’Ivoire: $1,000 – $2,000 per vessel
– Republic of Benin: $500 – $1,000 per vessel
Nigeria compared to other West African ports:
Food and Beverages:
– Nigeria: 5% – 10% of cargo value (e.g., NAFDAC, SON)
– Ghana: 2% – 5% of cargo value (e.g., FDA, GSA)
– Côte d’Ivoire: 1.5% – 3% of cargo value (e.g., Codex, Ivorian Standards)
– Republic of Benin: 1% – 2% of cargo value (e.g., Republic of Benin Standards, Health Ministry)
Pharmaceuticals:
– Nigeria: 10% – 15% of cargo value (e.g., NAFDAC)
– Ghana: 5% – 10% of cargo value (e.g., FDA)
– Côte d’Ivoire: 3% – 6% of cargo value (e.g., Ivorian Health Ministry)
– Republic of Benin: 2% – 4% of cargo value (e.g., Benin Health Ministry)
Electronics and Electricals:
– Nigeria: 5% – 10% of cargo value (e.g., SON, NCC)
– Ghana: 2% – 5% of cargo value (e.g., GSA, Energy Commission)
– Côte d’Ivoire: 1.5% – 3% of cargo value (e.g., Ivorian Standards, Energy Ministry)
– Republic of Benin: 1% – 2% of cargo value (e.g., Benin Standards, Energy Ministry)
Note that these estimates may vary depending on the specific product, agency, and circumstances.
9. Why Nigeria Product Regulatory Agencies Tends to Have Higher Levies and Fees.
■. Nigerian ports tend to have higher regulatory fees/levies due to:
1. Multiple agencies involved in product regulation
2. Higher charges by individual agencies
3. Complexity in the regulatory process
4. Additional fees for services like product, sampling, testing and certification
In contrast, other West African ports have implemented reforms to reduce regulatory burdens and costs, making them more competitive.
10. Factors Impeding Trade
Value Added Supply Chain in Nigeria Inland Depots/Dry Ports Operations.
■. Several factors impede trade value-added supply chain in Nigeria, particularly in inland ports. Some key challenges include:
1. Inadequate Infrastructure: Poor road networks, insufficient warehousing, and lack of modern cargo handling equipment.
2. Inefficient Customs Processes: Complex and time-consuming customs procedures, leading to delays and increased costs.
3. Security Concerns: Cargo theft, pilferage, and damage due to inadequate security measures.
4. High Transportation Costs: Inefficient transportation systems, leading to high costs and long transit times.
5. Lack of Intermodal Connectivity: Inadequate linkages between modes of transportation (road, rail, water).
6. Inadequate Information Technology: Limited use of technology for efficient cargo tracking, monitoring, and management.
7. Corruption and Bureaucratic Hurdles: Unofficial payments, complex regulations, and slow decision-making processes.
8. Limited Warehousing and Storage: Inadequate facilities for cargo storage, leading to congestion and damage.
9. Inadequate Skilled Labor: Shortage of trained personnel in cargo handling, logistics, and supply chain management.
10. Policy and Regulatory Framework: Unclear or inconsistent policies, leading to uncertainty and inefficiencies.
11. Additional Challenges:
■. Inland depots/Dry Ports in Nigeria face additional challenges, including:
1. Limited Access to Inland Ports: Poor road networks and inadequate intermodal connectivity.
2. Inadequate Facilities and Equipment: Limited cargo handling capacity and outdated equipment.
3. High Costs and Fees: Excessive charges and fees for services, leading to increased costs.
4. Security Concerns: Cargo theft and pilferage due to inadequate security measures.
Addressing these challenges is crucial to improving trade value-added supply chain efficiency in Nigeria, particularly in inland ports.
12. Comparative Payable Customs Duty Value on Imports within the Region:
■. The payable Customs duty value for imported products can vary significantly between Nigeria Customs ports and other Customs authorities within the region. Here’s a rough estimate of the differences on a TEU (Twenty-Foot Equivalent Unit) basis:
– Nigeria Customs:
– Average duty rate: 20% – 30% of cargo value
– Additional charges (e.g., VAT, CISS, ETLS): 10% – 20% of cargo value
– Total payable duty: 30% – 50% of cargo value
– Ghana Customs:
– Average duty rate: 10% – 20% of cargo value
– Additional charges (e.g., VAT, NHIL): 5% – 10% of cargo value
– Total payable duty: 15% – 30% of cargo value
– Côte d’Ivoire Customs:
– Average duty rate: 10% – 20% of cargo value
– Additional charges (e.g. VAT, statistical tax): 5% – 10% of cargo value
– Total payable duty: 15% – 30% of cargo value
– Republic of Benin Customs:
– Average duty rate: 10% – 20% of cargo value
– Additional charges (e.g., VAT, statistical tax): 5% – 10% of cargo value
– Total payable duty: 15% – 30% of cargo value
Note that these estimates may vary depending on the specific product, cargo value, and other factors.
Nigeria Customs tends to have higher duty rates and additional charges compared to other countries in the region. This can make Nigerian ports less competitive and may encourage importers to use neighboring ports.
Keep in mind that these estimates are rough and may vary depending on specific circumstances.
13. Comparative Minimum Payable Customs Duty Value per TEU within the Region:
■. Based on the estimates provided earlier, here is a comparative minimum payable Customs duty value for a TEU (Twenty-Foot Equivalent Unit) between Nigeria Customs and other Customs authorities within the region:
– Nigeria Customs: $1,500 – $3,000 per TEU (minimum payable duty)
– Ghana Customs: $800 – $1,500 per TEU (minimum payable duty)
– Côte d’Ivoire Customs: $600 – $1,200 per TEU (minimum payable duty)
– Republic of Benin Customs: $500 – $1,000 per TEU (minimum payable duty)
Note that these are rough estimates and can vary depending on the specific product, cargo value, and other factors.
The minimum payable Customs duty value for a TEU in Nigeria is significantly higher compared to other countries in the region. This can make Nigerian ports less competitive and may encourage importers to use neighboring ports.
Keep in mind that these estimates are rough and may vary depending on specific circumstances.
13. Comparative Minimum Payable Customs Duty Value per TEU within the Region:
■. Based on the estimates provided earlier, here is a comparative minimum payable Customs duty value for a TEU (Twenty-Foot Equivalent Unit) between Nigeria Customs and other Customs authorities within the region:
– Nigeria Customs: $1,500 – $3,000 per TEU (minimum payable duty)
– Ghana Customs: $800 – $1,500 per TEU (minimum payable duty)
– Côte d’Ivoire Customs: $600 – $1,200 per TEU (minimum payable duty)
– Republic of Benin Customs: $500 – $1,000 per TEU (minimum payable duty)
Note that these are rough estimates and can vary depending on the specific product, cargo value, and other factors.
The minimum payable Customs duty value for a TEU in Nigeria is significantly higher compared to other countries in the region. This can make Nigerian ports less competitive and may encourage importers to use neighboring ports.
14. Estimated Difference in the Minimum
Payable Duty Value within the Region
■. Here is a rough estimate of the difference in minimum payable duty:
– Nigeria versus Ghana: $700 – $1,500 per TEU
– Nigeria versus Côte d’Ivoire: $900 – $1,800 per TEU
– Nigeria versus Republic of Benin: $1,000 – $2,000 per TEU
Keep in mind that these estimates are rough and may vary depending on specific circumstances.
■. The average comparative cargo dwell or processing time in customs control between Nigeria and other customs within the region is:
– Nigeria: 20-30 days (average dwell time)
– Ghana: 7-14 days (average dwell time)
– Côte d’Ivoire: 5-10 days (average dwell time)
– Republic of Benin: 5-7 days (average dwell time)
Note that these estimates may vary depending on factors like cargo type, customs clearance processes and port efficiency.
15. Comparative Cargo Clearance Dwell Time in the Customs Administration within the Region
■. Nigeria’s average dwell time is significantly longer compared to other countries in the region. This can lead to increased costs, reduced competitiveness and decreased investor confidence.
Here is a rough estimate of the difference in average dwell time:
– Nigeria versus Ghana: 13-16 days
– Nigeria versus Côte d’Ivoire: 15-20 days
– Nigeria versus Republic of Benin: 15-23 days
16. Factors Responsible for the Delays:
■.These delays can be attributed to various factors, including:
1. Inefficient customs processes
2. Lack of automation and technology
3. Insufficient staffing and training
4. Complex regulatory requirements
5. Corruption and bureaucratic hurdles
Reducing dwell times can significantly improve trade facilitation, increase efficiency and enhance Nigeria’s competitiveness in the region.
17. Impacts of Pirates Activities in the Gulf of Guinea – Issues
■. The sponsors of pirate organizations and attacks on commercial ships in the Gulf of Guinea are not explicitly known, as piracy is a complex and often clandestine issue. However, various reports and investigations suggest that:
1. Local Militants and Insurgent Groups: Some Nigerian militant groups like the Movement for the Emancipation of the Niger Delta (MEND) have been linked to piracy in the region.
2. Organized Crime Syndicates: Transnational organized crime groups, possibly with connections to drug trafficking or other illicit activities, may be involved