A Review of the Nigerian Energy Industry

Nigeria ports lose N10.4bn to nationwide labour strike action

*Nigerian Ports Authority.

Vincent Toritseju
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03 October 2018, Sweetcrude, Lagos — The federal government has lost a whopping N10.4 billion to the just concluded warning strike that paralyzed economic activities at the nation’s seaports.

It was gathered that N5.4 billion were revenue that would have accrued to the government through Customs import duty, levies, operators’ charges, fees accrued to Standard Organization of Nigeria (SON), National Agency for Food Drug Administration and Control (NAFDAC), National Agricultural Quarantine Service (NAQS) among others.

Additional N3,6billion were lost by shipping lines, manufacturing companies, haulage/trucking firms, terminal operators, importers, clearing agents totaling an average daily loss of N5 billion.

According to an industry Report by leading financial audit firm, Akintola Williams Deloitte titled: Public-Private Partnership (PPP) as an anchor for diversifying the Nigeria economy: A Case Study of Lagos Container Terminals Concession; Nigerian importers and exporters now save about $800 million (N244 billion) annually, which, hitherto, was paid to shipping companies as congestion surcharge.

The Document further explained that the demurrage payment of about N244bn is saved by importers due to increased ship traffic and throughput, eradication of ship waiting time at the container terminals, reduction of Vessel turnaround time from five days to 41 hours, and reduction of dwell time for cargoes from over 30 days to just 14 days.

However, In the event of the national strike that locked down the seaports, cargoes were trapped inside the ports, leading to congestion and delay of vessels turnaround time, and ultimately jerking up payment of demurrages by importers and exporters.

Recall that the Maritime Workers Union of Nigeria (MWUN), on Thursday complied with the directive of the Nigerian Labour Congress (NLC) and shut down the ports against economic activities after the union last week Wednesday declared strike over the alleged delay of the Federal Government to implement the new minimum wage for workers.

The National Minimum Wage Committee was inaugurated November 2017 but commenced work March this year and drew timelines to deliver a new national minimum wage by August/September.

The NLC had demanded that the tripartite negotiating council should be called back to conclude its assignment on minimum wage.

In a chat with newsmen, the President General of MWUN, Com. Adewale Adeyanju said the maritime union had complied with the directive of the union by calling his members out for a strike.

He said, “We are complying with the national leadership and there won’t be economic activities at the seaports throughout the warning strike.” he told our correspondent.

The MWUN is comprised of four branches which include the Dockworker, NPA, shipping and seamen/NIWA branch.

The strike also paralyzed customs activities as they were barred from accessing the examination bays and denied service of dockworkers for examination of cargoes in containers.

Further findings showed that shipping companies, banks around Apapa were shut down and clearing agents were unable to pay for customs duties and other agencies charges.

However, it was gathered that aside from the Nigeria Customs Service (NCS) who would have lost over N2billion daily for lack of operation at the Apapa and Tin Can Island port, the Nigeria Ports Authority (NPA) would have lost about 200 million Naira daily due to the shutting down of the country’s ports by the just concluded general strike.

The money lost by NPA represented revenue accruable from port charges, and the build-up of vessels waiting to discharge their cargoes.

Speaking on the development, the Deputy President of the Association of Nigerian Licensed Customs Agents, Mr. Kayode Farinto said that he does not care if the government loses N100bn adding that the government will continue to lose money until they do the right thing.

Mr. Kenneth Chukwuma another customs agents also said that importers would be at the receiving end of the strike action as huge demurrage that would have been saved were accrued.

“With the shutdown of the seaports, importers and exporters will pay huge demurrage payments.”

“They (Importers and exporters) they are at the receiving end because their cargoes were trapped. And if cargoes get trapped in the ports as a result of the strike, other vessels waiting to discharge won’t be able to do that since there won’t be space to accommodate newer cargoes inside the ports. And once newer vessels cannot discharge, demurrages begin to mount.

“And who pays the demurrages? It is the importers and the exporters because they are the owners of the cargoes trapped inside the ports. Demurrages is not the business of agents or truckers, it is the responsibility of the cargo owners.

“If newer vessels cannot discharge the cargoes they are carrying within the normal period, then the owners of those cargoes will have to part with congestion surcharges before they will be offloaded. Congestion surcharges are the same thing as demurrages.

“And what does that mean financially, it means importers and exporters will pay N668, 493, 150 every day their cargoes remain trapped inside the port. That’s if we use the Akintola Williams report, even though I strongly believe it could be more than that.

“The seaport is a sensitive area not somewhere people should just think of shutting down, because if shut, port users will suffer

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