Last week, it was reported that the Nigerian Ports Authority (NPA) had directed that export processing for exporters be put on hold until the backlog of exporters currently waiting to be attended to are cleared.
According to the NPA, there are over 600 trucks trapped in the port corridor of Lagos, for which their owners are yet to complete certification from supervisory agencies like the Nigeria Customs Service (NCS) and the Central Bank of Nigeria (CBN) for the type of export goods they are carrying. It added that until the necessary documentations were completed, those exporters intending to transport their goods to the ports will have to wait.
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Expectedly, this has generated a lot of comments and concern, not just from exporters but from industrialists, economists and supply chain experts.
In their views expressed separately, considering the enormity of the backlog of documentation and clearance involved, the two week period given by the NPA might not be enough. And this will most likely affect not just the revenue of exporters but the export business in the country as a whole.
With no certainty that the backlog of those under consideration can be cleared within the two weeks period, there is the likelihood that another lengthy queue will be added to those already waiting to begin the process of exporting their goods, thereby exacerbating the situation.
Bringing home the implication of the situation, John Isemede, a consultant on export value chain to the United Nation Industrial Development Organisation (UNIDO) reasons that once exporters sign an agreement with a buyer abroad and there is delay in getting the goods, this results in rejection, which inevitably leads to severe losses in both monetary and reputational terms to the exporter and the country where the goods are coming from.
The issue of congestion at the ports has been an unfortunate recurring decimal in the country. We have not forgotten how Nigeria gained notoriety with the so-called ‘’cement armada’’ in the seventies, when ships laden with cement imported into the country formed long queue, well into the nation’s seaward limits with the attendant consequences of demurrage and massive port charges.
Although a lot of development has taken place mainly towards building new ports and diversifying their locations, the problem still persists in many dimensions.
It is either, as in this case, issues of delay in processing of papers for export, or conversely, of imports into the country.
Invariably, the Apapa area of Lagos suffers the worst from the traffic of trucks clogging up the roads into and out, resulting in health and environmental hazards.
The measures put up by the NPA can only be a temporary one with cosmetic effect. Beyond that, it is an opportunity for government to muster the political will to undertake a holistic review and reform of ports operation in the country in view of their centrality to the economy of the country. In this regard, the authorities concerned should find out why ports in neighbouring countries seem to have near seamless operations while ours do not.
Such a review should also tackle the complaints by exporters and importers of over centralisation of the documentation process. There is also every need to look into the issues of alleged corruption, both at the ports where goods are processed for import and exports, and at the supervising offices for the necessary documentation.
The unnecessary congestion at the ports has the corollary effect of adding to the high cost of doing business in Nigeria, thereby resulting in negative economic growth. Whatever economic reforms the government hopes to implement in the country cannot be attainable if the ports do not function optimally. A nation that is import dependent like Nigeria and in dire need to boost its export profile cannot afford the current situation at the ports.