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Nigeria: Reforming the Maritime Ports

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Nigeria: Reforming the Maritime Ports October 2016 Nigeria: Reforming the Maritime Ports Table Of Contents Lists of Aberrations 4 Executive Summary 5 Background 9 Current Realities in the Maritime Ports Sector 10 Gap Analysis 12 Stakeholder’s Survey - Evaluating the Impact of a challenging Port landscape 15 Port Governance Models 23 Reforms enacted by other countries to Enhance Ports Efficiency 25 Port Reform Roadmap 27 Conclusion 31 Appendix 32 Acknowledgements 38 References 39 About LCCI 39 Nigeria: Reforming the maritime ports 3 Lists Of Abbreviations AEO Authorized Economic Operator NAGAFF National Association of Government Approved APMT APM Terminal Apapa Freight Forwarders ASYCUDA Automated System for Customs Data NARTO Nigerian Association of Road Transport Owners BoL Bill of Lading NCS Nigerian Customs Service BOT Build-Operate-Transfer NDLEA National Drug Law Enforcement Agency BPE Bureau of Public Enterprises NEPC Nigerian Export Promotion Council BTDP British Transport Docks Board NESS Nigerian Export Supervision Scheme CBN Central Bank of Nigeria NEXT Nigeria Expanded Trade and Transport CCI Clean Certificate of Inspection NIMASA Nigerian Maritime Administration and Safety CIF Cost, Insurance, and Freight Agency CISS Comprehensive Import Supervision Scheme NIWA Nigerian Inland Waterways Authority (NIWA) CMG Corridor Management Group NPA Nigerian Ports Authority CRFFN Council for the Regulation of Freight NAQ National Quarantine Service Forwarding in Nigeria NRC Nigerian Railway Corporation DHC Destination Handling Charge NSC Nigerian Shippers Council ECD Exchange Control Documents NSW Nigerian Single Window EU European Union PAAR Pre-Arrival Assessment Report FAAN Federal Airport Authority of Nigeria PID Port Inspection Directorate FDC Financial Derivatives Company PTML Ports and Terminal Multiservices Ltd. FGN Federal Government of Nigeria RAR Risk Assessment Report FIRS Federal Inland Revenue Service Ro-Ro Roll-On, Roll-Off FMF Federal Ministry of Finance FSSFGT Framework of Standards to Secure and Facilitate FMOT Federal Ministry of Transportation Global Trade FOU Federal Operations Unit SLPA Sri Lankan Port Authority FMTI Federal Ministry of Trade and Investment SON Standards Organization of Nigeria FOB Free on Board SOP Standard Operation procedure GON Government of Nigeria SSS State Security Service GT Gross Tonnage TCC Tax Clearance Certificate ICC International Chamber of Commerce TCICT Tin Can Island Container Terminal ICD Inland Container Depot TDO Terminal Delivery Order ICPC Independent Corrupt TEU Twenty-Foot Equivalent Unit ICRC Infrastructure Construction Regulatory THC Terminal Handling Charge Commission UNCTAD United Nations Conference on Trade and LAKAJI LAGOS-KANO-JIBIYA Development LCCI Lagos Chamber of Commerce and Industry USAID United States Agency for International Development L/C Letter of Credit UCP Uniform Customs and Practice for Documentary MAN Manufacturers Association of Nigeria Credits MARKETS Maximizing Agricultural Revenues and Key USD United States Dollars Enterprises in Targeted States WCO World Customs Organization MDA Ministries, Departments and Agencies WTO World Trade Organization MOWCA Maritime Organization for West and Central Africa MPA Ministries, Departments and Agencies MT Metric Ton NAFDAC National Agency for Food and Drug Administration and Control 4 Nigeria: Reforming the maritime ports Executive Summary An examination of successful reforms across the world reveals the importance of an appropriate regulatory framework to support the transition process and ensure satisfactory levels of efficiency while upholding public interest. The efficiency of port operation is a major to infrastructure inadequacies, or the driver of trade and economic activities moral misgivings of a few errant MDAs across countries. Unfortunately, over officials. Impediments occur at every level of the years, users and operators at the Nigerian society involving both public and Nigerian Ports have been facing lingering private sector actors. While the MDAs and challenges and bottlenecks namely, their officials are most often associated with infrastructure shortcomings, policy and creating artificial barriers and demanding regulatory inconsistencies, overlapping unofficial payments for personal gain, the functions and duplication of roles among private sector players are not without blame. the Ministries, Departments and Agencies Users of the ports and their agents represent (MDAs) operating at Nigerian Ports, high the “supply side” of undocumented incidence of infractions of the MDAs. payments, often in the form of inducements, conflicts of interest, illegal dealings and lack To take advantage of the present of knowledge of port processes (especially opportunity presented by the imperative the Customs rules and regulations). Thus, to diversify the economy, LCCI in the causes of barriers, disruptions at the partnership with FDC, is riding on Nigerian Ports and preventing or reducing the present research to identify and to such impediments - are largely the result of propose solutions to the key challenges institutional, operational failures, legal and presently inhibiting the Nigerian Port administrative gaps. system. This is in line with business policy advocacy mandate of the Chamber An examination of successful reforms of coordinating private-sector efforts across the world reveals the importance for governance reform in the Nigerian of an appropriate regulatory framework maritime transport sector. to support the transition process and ensure satisfactory levels of efficiency while The research shows that distortions in upholding public interest. port operations is by no means limited In countries with reform impacts, maritime Nigeria: Reforming the maritime ports 5 Estimates from the research show that trillions of Naira in revenue lost annually within the port and business community due to inefficiencies and inherent shortcomings of the nation’s maritime ports. port reforms usually have the general productivity within the Nigerian Maritime objective of promoting global trade Ports the following short and medium term through: reforms and policy measures are essential: • Faster clearance of goods • Shorter waiting times for ships • Technology and Innovations: Adopt awaiting berth an Integrated Advance Cargo and • Eliminating redundancies in the customs clearance system, with functions of the several regulatory scanning, sealing and tracking (SST) government agencies in the ports capabilities. Estimates from the research show that • Establish National Trade Data trillions of Naira in revenue lost annually Centre: The National Trade within the port and business community Data Centre should be readily due to inefficiencies and inherent accessible to all agencies, operators shortcomings of the nation’s maritime and stakeholders at all times and ports. It is evident that recommended everywhere to eliminate inherent reform measures if implemented can abuses reverse this leakage within in the near term. Moreover, about 10,000 new jobs in • Establish and Implementation of a the maritime port sector and approximately Single Window Platform: Reduction/ 800,000 jobs in the industry can be elimination of multiplicity of agencies generated over the same period giving by the creation of a single clearance a more efficient and productive port in and payment desk as a vital reform Nigeria. These estimates are potentially measure with an immediate cross- feasible under the assumption that the port cutting positive impact in the port. can double its 2014 non-oil volume of 1.1 million TEUs within a period of 24months • Private Sector Ports Investment: and from that point, grow consistently at Public private partnership 15-25% annually. infrastructural participation in To achieve the much needed efficiency and 6 Nigeria: Reforming the maritime ports funding access routes to the will go a long way to resolve inclusive and consistent ports (roads and rails), truck delay issues at the ports. implementation of the short/ parks with online call-up medium term policy measures systems. This would improve • Pass the Pending Bills at termed “Low Hanging Fruits” efficiency and better use on the National Assembly: The illustrated in the figure below manpower. National Transport Bill (NTB), will surely set the Nigerian ports especially for road and rail, and on the path of productivity and • Reduce The Number of the Port & Harbour Bill (PHB). growth. It is widely acknowledged Public Sector Agencies/ that coordinating the reforms in Departments at The Ports: • Increased partnership and the maritime port is predicated Cutting the number of public collaboration with advocacy on the buy-in of the Presidency sector agencies/departments platforms: At the regional and National Economic Team. at the ports from present 14 to level, LCCI and its members Public authorities and the private 6 is highly advised. For a start, should engage with the sector have come to a convergent this is in line with best global Borderless Alliance in the realization that one of the practices and will go a long implementation of these key starting points for activating the way to reduce the overlapping recommendations. It would also diversification objective of the functions of public agencies, be useful for the port reforms present government is fixing the costs of doing business at the to be pursued in the context of ease of doing business at the nation’s ports and artificial barriers and the implementation of the WTO ports. Overall, political will that flow intimidation of port users.
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