Nigeria: Govt agencies cash-strapped

*Dollar on a scale.

*Dollar on a scale.

*Operators renege on Dollar obligations

07 October 2016, Lagos —
Federal government agencies in the maritime sector are struggling for funds to address their core functions as terminal operators and shipping companies fail to meet their dollar obligations to the agencies as a result of the foreign exchange crisis facing the country, investigation has revealed.

The current economic recession officially confirmed recently has taken a big toll on the nation’s maritime industry with the sector suffering 51 percent decline in revenue.
Apart from the foreign exchange crisis and the decline in oil revenue, the Treasury Single Account (TSA) policy of the federal government also plays a major role in the dilemma facing the agencies.

The federal government agencies affected by this crisis include: the Nigerian Maritime Administration and Safety Agency (NIMASA), the Nigerian Ports Authority (NPA) and the Nigerian Shippers Council (NSC).

In a chat, the Chairman, Seaport Terminal Operators Association of Nigeria (STOAN), Dr. Vicky Haastrup said that terminal operators are not able to remit their dollar obligations to the NPA because they do not generate enough dollars because of the government policies that have slowed down activity in the sector.

For instance, he said the decision by the government to exclude 42 items from access to foreign exchange has led to a 57 per cent decline in activity in her company adding that others like APMT are worse hit.

According to her, “Every segment of port operations is being affected by this exchange rate crisis. Ten years ago when the ports were consessioned, the naira was exchanging for N125 to a dollar. Today the exchange rate is N473 or N490 in the parallel market. We just have to use the parallel market because government does not have the capacity to fulfil demands for the dollar so the fall back position is the black market. For terminal operators, we don’t generate enough foreign exchange to sort ourselves out. Don’t forget we have the lease fees to pay, we pay royalties in dollars and at the end of the day we do not generate enough income to be able to pay those dollar obligations to the government.

“What do we do? We go to the black market and at what exchange rate? Our equipment are procured in dollars, there are so many things we do that require the green back. Even our customers whose services are done in dollars, there fall-back position is the black market. Everybody is bleeding, the ports operators, importers the NPA is also bleeding because it is difficult for us to meet our obligation to the NPA now. We have to go to the black market to exchange dollars to be able to pay the NPA. Government indirectly is also bleeding. Government needs to invite all stakeholders for discussions, we need to talk about this and make suggestions to government how it can work.”

The Director-General of NIMASA, Dr.. Dakuku Peterside also confirmed this development recently at a meeting with members of the League of Maritime Editors and Publishers in his office.
Peterside said specifically that NIMASA’s revenue was 51 percent down, a situation attributed to the hard economic times facing country.

Although the DG did not give further explanations on how the economic recession has affected the agency’s revenue, he gave a clear indication that the economic recession did not spare the sector adjudged as next to oil in terms of revenue generation to the national economy.
However, Peterside attributed the economic recession to the way things were done in the past, adding that the effect was beginning to show on the economy.

“We were living in borrowed times and resources in the past, now we are beginning to face the stark reality”, he said, adding that this situation would take time to adjust.

Peterside, however, assured that despite the hard times, the management team of NIMASA would do everything within their powers to ensure that the core functions of the agency do not suffer.

*Eromosele Abiodun – Thisday

About the Author