•Laments foreigners’ take over of 90% of freight forwarding jobs
By Steve Agbota [email protected] 08033302331
The Director General of the Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, has restated the need to resuscitate the nation’s national carrier to reduce capital flight with the death of the Nigerian National Shipping Line (NNSL).
The MAN boss noted that with the absence of a national carrier, Nigeria loses about $17 billion annually to foreigners even as he lamented that foreigners have taken over 90 per cent of freight forwarding jobs meant for indigenes.
Ajayi-Kadir who revealed this in a International Maritime Digest, said that the benefits of a national shipping line far outweigh the associated challenges, adding that Nigeria needs not to continue to hold back a vital decision of reviving the line, albeit with enhanced initiatives and infusion of private sector incentivised participation.
He recalled that Nigeria which used to play active role in the shipping business when the NNSL was in business, now depends on foreign owned or registered vessels to carry wet and dry imports and exports cargoes.
The MAN DG also regretted that the country’s dependence on foreign vessels to lift cargoes often leaves it with huge economic losses, including tax revenues and job losses that would have been created back home.
“While it is commendable that the Ministry of Transportation had set up two committees to work on the establishment of a national fleet and ensure the reformation of Nigerian Maritime Administration and Safety Agency (NIMASA), we must find out what countries like Kuwait, Greece, US and China with the sustainable national fleet are doing differently.
“For instance, Kuwait has over 100 supertankers and no buyer will procure and transport the crude oil from that country unless it uses ships owned by its public and private sectors. Of course, inward looking policies like this have a way of positively impacting employment, wealth creation and the socio-economic of citizens,” he said.
According to him, the major difference between Nigeria and countries that are doing well in the shipping business is the tax regime.
“The host country gives you a tax holiday of about five years because they recognise how capital-intensive the business is. Value Added Tax (VAT) and tonnage taxes are reduced. What the country will lose in not collecting taxes from the new ship, they gain in job creation. The Nigerian situation, however, is a different ball game. Government policies, in most cases, tend to limit the capacity of economic operators to compete effectively,” he added.
Speaking on the change MAN needs from the present management of the Nigerian Ports Authority (NPA), he said that efficient port management depends largely on the use of appropriate technology, saying reducing the level of human interference would lead to greater efficiency.
“I would suggest that the present NPA management should accelerate its ongoing efforts to effectively deploy technology in the management of the port. This will reduce ship turnaround and save users the hardship they currently face.
“In addition, the influx of several revenue agencies from the Lagos State Government is very disturbing. State Government interference should be removes and our members should be removed and our members should be answerable to NPA as far as far as port operations is involved. NPA should put in place measures to regulate the activities. We also expect that NPA will join hands with other Port’s Economic Regulators to ensure that foreign shippers do not exploit Nigerian importers,” he said.
Meanwhile, Ajayi-Kadir said the Lekki Deep Seaport will address the issues of congestion importers and exporters are usually experienced at the Apapa and Tin-Can Island Ports. “As you aware, one of the major challenges facing businesses in Nigeria is the issue of port congestion, which most times leads to payment of huge dumurrage by importers. I believe that the Lekki Deep Seaport will be able to reduce the congestions at the seaports.
“It is important, however, for government to take immediate action to ensure that the impending astronomical increase in human and vehicular movement. Our experience with the Apapa and Tin-Island should guide us in taking proactive steps with a view to ensuring ease of passage and smooth operation of the users of the Lekki Deep Seaport,” he stated.
However, he lamented that the manufacturing sector is overburdened by the incidences of multiple taxes/levies and fees occasioned by the excessive drive of Government inland revenue.
“As we speak, manufacturers pay over 30 different taxes, levies and fees to agencies of the Federal, State and Local Governments. MAN over the year has expressed dissatisfaction over continuous increases in taxes, excise duties, VAT and others because we are believe that multiple taxes/levies/fees depress production in the manufacturing sector,” he lamented.
He said, however, raher than getting respite, Government has consistently increased taxes, especially those payable by manufacturers.
He said how in the world will one imagine that shortly after increasing excise duty on beverages and tobacco for three years, the same tax head will again be increased before the expiration of the tenure of the increase, without considering the long-term impact on sustainability of the concerned businesses and unemployment.