By Isaac Anumihe
Even when the economy showed obvious signs of anemia as a result of copious bleeding from moronic looting and plundering of the treasury by those elected or foisted on us to manage our common wealth, the Federal Government still maintained that the economy was healthy.
This denial persisted until July 21, 2016, when it became clear that the economy was going to crash. Consequently, the Minister of Finance, Mrs. Kemi Adeosun, admitted before the National Assembly that Nigeria ‘is ‘technically’ in recession’.
However, one of the sectors of the economy that was badly affected by the recession was the maritime sector which lost over 6000 of its workers and over 5000 of its ancillary workers.
President-General of Maritime Workers Union of Nigeria, (MWUN), Mr. Emmanuel Anthony Nted, disclosed that over 6000 workers in the maritime sector have lost their jobs in the last one year due to the current economic recession. He said that besides the job loss, many companies in the sector had folded up, while several shipping companies had relocated to other countries due to the prevailing economic situation.
He said this at the union’s National Executive Council (NEC) and Special Delegates Conference, in Lagos.
“The economic recession is really affecting and biting the union very hard. I feel sad to say that over 6,000, members of our union have lost their jobs since the recession began and many more are facing job insecurity, thus exposing the lives of their families to serious jeopardy. In fact, Intels alone retrenched over 3000 workers because of harsh operating environment. Many shipping companies have been forced to close shops and have since relocated to other countries, thus compounding the job crisis in the industry. We sincerely implore the government to find urgent solution to recession before things go out of hand,” he said.
Nted’s assertion was corroborated by a data by the Nigerian Ports Authority (NPA) which showed that 341 vessels entered Nigeria in September 2016, the lowest in nine months and a fall from 400 recorded in August 2016. Cargo throughput also dropped from 6.3 million metric tonnes in January this year to 5.6 million in September, which is also the lowest in the year.
The statistics also showed that a total of 3,347 ocean-going vessels have called Nigeria so far this year, estimated at about 100,152,274 metric tons. The breakdown showed that the Lagos Port Complex, Apapa, received 218 vessels in the third quarter as against 301 in the second quarter.
Experts have blamed the drop in cargo volume and huge loss of revenue by port and terminal operators on the anti-trade policies of the Federal Government. These policies which came as a way to boost the economy, have also made the country unattractive to investors.
National President, National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), Mr. Lucky Amiwero said the current hike in import duty on vehicles in 2014/2015 from 10 per cent to 35 per cent with an additional surcharge of 35 per cent, bringing the total tariff to 70 per cent, has negatively impacted operations at the port and led to massive revenue and job loss. He said the arbitrary import duty hike led to the diversion of vessels carrying vehicles to the ports of neighbouring West African countries, thereby boosting operations in those ports – especially the Port of Cotonou – at the expense of Nigerian ports. The development has also negatively affected the operations of dockworkers, licensed customs agents, freight forwarders, truckers and others.
According to him, the reduction of activities by 70 per cent in the operation of terminal operators who pay the Federal Government based on cargo, through earnings and shipping companies, has drastically affected their activities.
“At present, Nigerian ports have lost about 80 per cent of their vehicle cargo as a result of this hike, which has done more harm than good to the economy. It has promoted smuggling and led to huge loss of government and private sector revenue to the advantage of the ports of neighbouring countries. It is estimated that no fewer than 5,000 jobs and about N30 billion is lost annually to the policy” he said.
Investigations also show that break bulk terminals at the ports struggled to pay their bills and meet their financial obligations to the Nigerian Ports Authority (NPA) due to the plethora of banned products and the hike on import duties on others. For instance, the hike in import duty on rice, the restriction imposed on the importation of fish and on cement took a huge toll on the income of the break bulk terminals as their revenue dipped by over 60 per cent. The imposition of 100 per cent import duty on rice and an additional 10 per cent levy have had the most debilitating effect on the break bulk terminals as handling of rice cargo accounted for more than half of their revenue.
The restriction of 41 items from the CBN foreign exchange window has also taken a huge toll on port operations.
Director, Research and Advocacy, Lagos Chamber of Commerce and Industry (LCCI), Vincent Nwani, said: “There must be an urgent review of the CBN’s policy on the restriction of access to foreign exchange placed on 41 items, as about 16 of the total items on the list, serve as critical raw materials for intermediate goods produced in Nigeria, especially as the country lacks the capacity for optimal production of the items.”
LCCI and the Manufacturers Association of Nigeria (MAN) said the decision is hurting the manufacturing sector, having led to the closure of many companies and relocation of others from Nigeria to Ghana and other neighbouring countries. It has also led to drastic reduction in the volume of cargoes handled at Nigerian ports, with affected port terminals losing about 60 per cent of their cargoes to the CBN restriction policy.
The Chairman, Senate Committee on Customs and Excise, Senator Hope Uzodinma recently said the upper legislative chamber would review some of the country’s trade policies including the contentious hike in tariff of some imported goods.
Uzodinma agreed that most of the country’s policies are anti-trade, favouring only neighbouring countries. He said 85 per cent of cargoes landed in Cotonou Port, Benin Republic, find their way into the Nigerian market.
“We have seen that some of the trade policies are skewed and they are favouring more foreigners than Nigerians. We want the opposite to be the case and in doing that, we will change some of the policies that have not helped local empowerment,” Uzodinma told stakeholders in Lagos at a recent parley.
The Director-General, Lagos Chamber of Commerce and Industry (LCCI), Mr. Muda Yusuf, said the drop in imports is directly related to the CBN foreign exchange policy, which he said needs to be reviewed.
A clearing agent and member of the Association of Nigerian Licensed Customs Agents (ANLCA), Mr. Dom Obi, blamed the present government for not reviewing the anti-trade policies of the past administration. He argued that until government revisits the policies, the trend will continue and the impact on the ports would become progressively worse.
President of the Save Nigeria Freight Forwarders Association of Nigeria, Mr. Patrick Osita Chukwu, believes the only way to bring cargo back to Nigerian ports is by reducing the Customs duty payable on imported vehicles and rice and by lifting the foreign exchange restrictions imposed by the apex bank.
“If you reduce tariff, it will create a big incentive for importers. No importer wants to burn his fingers. A lot of them are moving to Cotonou now but if you reduce the tariff by half, they will all come back because the reduction will help them defray the heavy expenses they incur when they import here.
Reducing Nigeria’s customs duties on select items to the level charged by other countries in the West and Central African sub-region will not only help in reducing smuggling through the land borders, it will also return the era of boom at our seaports and boost government revenue through the Nigeria Customs Service (NCS),” he said.
It is equally on record that apart from the 6000 maritime workers who lost their jobs, there are over 5000 ancillary jobs that were lost as a result of the lull in the ports operations.
According to reports, over 50 companies including banks and entertainment outlets located around the ports – who depend on the activities from the wharf closed shop.
On Wharf Road, Apapa Lagos alone, Daily Sun counted over 10 banks and two eateries that have closed their branches because of the lull in the ports.
Unity Bank which used to have four branches, now has two and Ecobank with eight branches had to reduce to four. Access Bank with seven branches also cut down its branches to four.
Eateries like Tetrazini was shut down, while a popular Kingstone Joe that had two outlets at Warehouse Road and Wharf Road closed down completely.
Tantalizer with three outlets now has one while the only Mr Biggs eatery in Apapa on Creek Road closed down.
Major hotels like Rockview, Excelsior and many others groaned for lack of patronage as most of their rooms were empty without any guests. Chains of events that required renting no longer come. A room rate which used to be between N25,000 per night and N30,000 per night can now be negotiated to between N8,000 and N10,000 per night.
Other businesses that collapsed on Burma Road include, grocery shops, shipping companies, haulage outfits, freight forwarding firms, clubs and other recreational outlets. It was gathered that each of the outfits has between 20 and 50 staff while one of the biggest brothels in Apapa which harbours over 200 inmates in the area has equally closed shop and the inmates relocated.
The popular Eleganza complex that used to house over 1000 offices is virtually empty because the tenants have relocated or are out of business. The complex which used to be the centre of activities is now a ghost of itself – empty, deserted dilapidated.
The same with Nnewi Building where over 800 offices were located, is now empty.
However, the situation is not likely to change if drastic steps are not taken. So, a lot lies on President Muhammadu Buhari, to make a difference in 2017.