How #EndSARS protests rendered Lagos ports unproductive

Nigeria, an import dependent nation relies heavily on external trade through her seaports to sustain her revenue base vis-à-vis collection of levies/charges/taxes on imported goods and exported products. However, more than four days in the previous week (excluding Saturday and Sunday), the ports were inactive due to an End-Sars protest that spiraled out of control and led to a breakdown of law and order which forced the Lagos State government to impose a movement restriction across the state in-order to restore law and order. With the ports closed for operation, the nation lost billions in revenue through various channels of revenue that ought to have accrued into the national coffers.

Halt in Customs revenue

One of the major ways the economy suffers due to inactivity at her seaports is the inability of the Nigeria Customs Service (NCS) to collect revenue (Import /Excise Duties & other Taxes /Levies) on cargoes at the ports. In 2019, the Customs generated N1.34 trillion from Import /Excise Duties & other Taxes /Levies. With the breakdown of law and order, and the grinding of port operations, collection of revenue on cargoes inside the ports was suspended because clearing agents, who represent cargo owners at the ports, were unable to visit the port. Aside the inability of clearing agents to visit the ports due to a movement restriction imposed by the Lagos State government, truck operators who mostly freight cargoes out of the ports joined the protest and barricaded the ports access roads, Wharf road and Creek road with their articulated vehicles, leading to many cargoes getting trapped inside the ports. With no clearing agents in sight, there was no work for Customs officers to do inside the ports for more than four days, a situation that was not the case even during the Covid-19 pandemic lockdown. The port which is meant to be a transit point for cargoes became a warehouse for cargoes, thereby derailing the major objective behind trade facilitation at the ports.

Halt in cargo-throughput revenue

The Nigerian port system, since 2006, metamorphosed into a landlord-tenant mode of port operation, where the Nigerian Ports Authority (NPA) acts as the landlord (representing government) while the private operators (terminal operators) represents the tenants who pay government revenue accruable on cargoes that come into the ports. Under the landlord-tenant port model, one of the charges terminal operators pay to the NPA is called the cargo-throughput fees. This fee is premised on the number of cargoes that come in and exit the ports on a daily basis. With cargoes trapped in the ports as a result of the protests and state imposed curfew, the ports became a storage space for containers, thereby derailing the income accruable into government coffers through the collection of charges on volume of cargoes that should have arrived and exited the ports during the four days period that the ports were shut.

Halt in NIMASA revenue

The Nigerian Maritime Administration and Safety Agency (NIMASA), according to its Act, collects three per cent of gross freight earnings on all international inbound and outbound cargoes from ships or shipping companies operating in Nigeria. The agency also collects 0.5 per cent of stevedoring charges collected by employers of dock-labour at Nigerian ports.

With the ports under lock and key in the last one week due to the EndSars protest and the Lagos State imposed curfew, this has meant that the numbers of vessels that NIMASA would have collected its statutory charges from would have being reduced because no new vessel berthed at the nations ports in the last one week because those waiting to discharge are still help up at the quay side due to the halt in port operations. Also, with no work inside the ports due to the curfew, many of the employees of the stevedoring firms didn’t come to work, meaning less revenue collection for NIMASA in the last one week.

Other revenues halted

Aside the major government agency revenue earners that suffered during the four days port closure, other revenue earners like the Council for the Regulation of Freight Forwarding in Nigeria (CRFFN) and the Lagos State government also suffered a dip in revenue collection. According to the Acts setting up the CRFFN, the agency in October, 2020 just started the collection of the controversial Practitioners Operating Fee (POF), which is N1000 for every 20ft container that leaves the port and N2000 for every 40ft container that leaves the port.

For Lagos State government, it collects N300 for every car that leaves the ports and N500 for every Jeep/Bus/SUV that leaves the ports under the Wharf Landing Fee regulation. With the ports not operating for more than four days, the CRFFN and the Lagos State government lost grounds on revenue collection at the ports through the POF and Wharf Landing fee respectively.

Effect on competitiveness

For years, Nigerian ports have battled with neighbouring ports in the West African sub-region for competitiveness over cargoes. Ports like Lome and Tema in Togo and Ghana respectively have threatened to wrest hub control from Lagos ports in recent years.

According to a 2017 analysis of West African ports by leading Netherlands based maritime consultancy firm, Dynamar, Lomé port now hosts West Africa’s leading container port, snatching the position from Lagos, Nigeria.

”From 311,500 Twenty-foot equivalent (TEU) containers in 2013, the number of containers transiting the Port of Lome has almost tripled reaching 1,193,800 TEU in 2017, while at other ports in the region, it barely rose.

“The surge is due to the commissioning of the Lomé Container terminal (LCT) which handles containers shipped through the port of Lomé. Beyond the LCT’s commissioning, Lomé profited from the congestion hampering activities at the port of Lagos to overtake it. Indeed, congestion issues cost the port of Lagos close to 30 percent of its container traffic over five years, bringing it to 1,050,000 TEU at the end of 2017.

“Tema’s port in Ghana, which used to be second after Lagos’ for years, is now third in the region with 956,400 TEU handled in 2017. The Ghanaian port is ahead of Abidjan (663,600 TEU), Dakar (570,500 TEU) and Cotonou (333,000 TEU),” Dynamar stated in its West African ports survey.

With congestion issue still hampering the ports in Lagos as at 2020, the recent protest and closure of the ports for more than four days have not helped Nigeria’s cause in making her ports more competitive. Prior to the protest and the State imposed curfew in Lagos, Apapa ports had battled congestion woes all through 2020. The inactivity at the ports for the past 96 hours will only end up worsening the situation inside the ports.

The high yard density currently being experienced at the ports will definitely leads to more vessel queues along the nation’s waters. Foreign shipping lines have in recent past lamented that the vessel queue is hitting close to two months on Nigeria’s waters. With no cargo evacuated in the ports in the past four days of last week, and the yards almost filled with import units of cargoes, vessels will spend more time waiting to discharge their contents at Nigerian ports, thereby affecting the nations will to be more competitive in the West African sub-region.

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