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Terminal operators lose N75bn to naira fall



The continuous adjustment in exchange rates, loss in the value of the naira against major foreign currencies and forex scarcity have all combined to bring about loss of revenue for terminal operators, who since the 2006 concession agreement have been paying their dues in dollars.

Terminal operators at the nation’s seaports have lost N75bn to currency adjustments due to the loss in value of the naira against major foreign currencies.

This is due to the fact that the operators pay their concession dues and meet other obligations in dollars.

It was gathered that the loss in the value of the naira coupled with the scarcity of dollars had overtime led to an increase in expenses and put a huge pressure on the income of the operators.

According to a 2017 report by Akintola Williams Deloitte, the foreign exchange challenges that Nigeria is facing as a result of the fall in global oil prices are further pronounced for terminal operators as a large part of their costs, including equipment and maintenance costs, lease fees to the Nigerian Ports Authority and operational costs are in dollars.

The report noted that in order to take care of their costs and dues, the terminal operators had to constantly source for dollars from the parallel market at very high rates.

Confirming this, the spokesperson for the Seaport Terminal Operators Association of Nigeria, Mr. Bolaji Akinola, who spoke to our correspondent on behalf of the operators, said that they were currently spending three times the amount they paid 10 years ago as dues owing to the continued fall in the value of the naira.

“In 2006 when we took over operation at the various terminals in the port, the exchange rate was N125 to the dollar. Now, it is about N400,” he stated.

He added that for every one dollar paid out, an operator lost N275.

“About 85 per cent of our commitments are in dollars. The tenure of the concession agreements ranged from 15 to 25 years and the estimated revenue to government is $6.54bn (N2.6tn) over the period,” Akinola stated.

Due to the challenges, the concessionaires have made several appeals to the government, asking to be allowed to pay their dues in naira.

In response to their pleas, the Managing Director, NPA, Ms. Hadiza Usman, said that the agency would take a second look at the dollar payment policy during a general review of the concession agreement.

She said, “We will look into the dollarisation of payments. This will not be clear until we do a realistic review of the concession agreements.

“Some of our obligations that we pay in dollars, we are looking to see how we can stop paying for everything in dollars. As we review the inflow of dollars, we will also review the outflow of dollars.”

Meanwhile, 83 per cent of port revenues are said to be received in naira from clearing agents; these include terminal handling charges, storage charges, customs examination fees, and others, while the remainder of the revenue is received in dollars, including stevedoring charges from shipping companies.

In addition to exchange rate fluctuations, the Central Bank of Nigeria’s restriction of importers of 41 select items from accessing foreign exchange through the official foreign exchange window as well as the 2014 hike in the import duty of vehicles affected the volume of cargo at the ports, resulting in further revenue loss to operators and government.

According to analysts at Deloitte, between 2006 and 2016, the port business was adversely impacted by the rise in Consumer Price Index or inflation, with the CPI rising to over 177 per cent since 2006, adding that foreign exchange fluctuations also impacted the value of the terminal handling charges with over 224 per cent forex depreciation between 2006 and 2016.

They argued that although the naira value of the THC increased from N31,850 in 2006 to N80,000 in 2016, the THC dollar value equivalent decreased from $232 in 2006 to $180 in 2016.

A maritime expert with the Lagos Chamber of Commerce and Industry, Mr. Vincent Nwani,   suggested that since the terminal operators were earning part of their revenue in dollars, they should pay the appropriate dues in dollars to the proportion of that revenue, while settling other obligations in naira.

He said in order to do that, they had to go back to the original agreements that they signed with the Federal Government, adding, “In some of those agreements, there may be clauses that the price of foreign exchange should determine the dues.

“They collect some fees in dollars; they don’t have to pay all their fees to the government in dollars.



Reps Demand Restructuring Of Terminal Operators, NPA Licensed Agents



Reps Demand Restructuring Of Terminal Operators, NPA Licensed Agents

 ..Says “Our goal is to effect changes that will restructure and position it to compete in the global space

The House of Representatives Committee on Ports and Harbour has demanded the restructuring of Terminal Operators and Nigeria Ports Authority (NPA) Licensed Agents in the country.

Rep. Nnolin Nnaji, Chairman of the committee, disclosed this at the interactive session with terminal operators and NPA licensed agents in Abuja on Thursday.

“Our goal is to effect changes that will restructure the unique and high-tech sector and position it to strategically compete in the global space.

“This sector is very dynamic and we must constantly review the standards, facilities and operational guidelines to keep pace with its obtainable global best practices,” he said.

The lawmaker reiterated the committee’s readiness to ensure that the sector remained one of the best through appropriate legislation and oversight.

“This is to bequeath to Nigerians, ports and harbours that are properly regulated and better managed for greater efficiency.

“It is important to harmoniously promote the objective of professionalising the modus operandi of this sector to improve our country’s Gross Domestic Product and revenue generation.

“We intend to collaborate with relevant stakeholders in the industry to ensure that appropriate avenues are created for economic development,” he said.

He said the committee was poised to make the ports a hub for better non-oil revenue generation, adding that the house would continue to support total rehabilitation and upgrading of ports, harbours and allied services.

In her contribution, the Registrar and Chief Executive Officer, Council for the Registration of Freight Forwarders of Nigeria, Urunta Chinyere, advised terminal operators to adopt electronic mode of payment.

“This is to reduce human interface in their operations,” the officer said.

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SOAN Inaugurates New Leadership, Boosting Hopes Of Crushable Inflation



SOAN Inaugurates New Leadership, Boosting Hopes Of Crushable Inflation

…Sonny Eja is President, Ekere is 1st Vice President; Iroghama Ogbeifun is Chairman, Technical Committee

When Air Peace made its innocent maiden flight from Nigeria to London on March 30, 2024, the symbolical flight achieved two things: first, it broke the unholy equilibrium fare price amongst available airlines.

Secondly, the gesture sent some powerful signals to the entrenched operators, that a determined indigenous operator has finally berthed; and momentarily, the extortionate fare crashed…! Now, if we should replicate this very gesture in the maritime, with a provision of a ‘national’, but privately run vessels/ carriers, how far or fast would carriage charges crash?

The Air Peace has silently made a deafening statement: no amount of plea would crash prices, except the nation can assertively provide a functional alternative.

SOAN Inaugurates New Leadership, Boosting Hopes Of Crushable Inflation
SOAN President, Sonny Eja.

The distance between Lagos and London by flight is about 6 hours and 40 minutes. The distance between London and New York by flight duration is 7h 30m. So, how come the cost of flight from Lagos to London is always twice as much, compared to the cost of flight from London to New York…? 

The answer is simple: Nigeria is an orphan, and there is no effective competition to mitigate arbitrariness. In the maritime sector, however, the country’s fate is worse: shippers are paying twice for cargo freight. Same for handling charges. There was even a time they were paying for as ridiculous a charge as the ‘Weekend’ levy, in the event that you are unlucky to come for clearing by weekends!

 The growing inflation, the poor masses albatross is both artificial and conspiratorial!

First, government’s understanding of the industry is warped and its support, insignificant. The Government functionaries who should assist both the shippers and stakeholders were often either insincere, ignorant or easily cave in under politicians’ pressure. 

No one is as hopeful as the hunter’s wife: she knows her husband did not keep any beast in the forest, yet, she joyfully sings lullaby for the baby on the mat, as she washes the soup pot and grinds the pepper, as she awaits the husband’s return! And the hunter never disappoints.

It is in the same spirit, that shippers would tomorrow, celebrate the inauguration of the incoming President of the Ship Owners Association of Nigeria SOAN, Sonny Eja.

Those who know him at close range described him as a highly focused, truly inspired and totally committed investor, who never disappoints. He is sold to the cause of the shipping industry development. 

Unarguably, he is acknowledged as a resourceful long runner, who often is not only self-motivating, but equally enjoys the special ability to motivate others  Some said it is for this reason that he is so treasured, by the SOAN maiden Arrowhead and Nigeria’s foremost shipping magnate, Engr. Greg Utomwen Ogbeifun.

The President, fortunately, will be fully assisted by tested and trusted ship owners, with enviable skills and technical know-how.. promoters 

These include Dr Louis Ekere as SOAN’s 1st Vice President; Mr. Gbolahan Shaba, the 2nd Vice President; Mr.Babalola Adefariti – Financial Secretary/ Treasurer; Mr. Bem Garba –  Chairman, Training & Capacity building Committee; the shipping industry Amazon, Ms.  Iroghama Ogbeifun as Chairman Technical Committee; Ms. Bassey Adie -Chairman, Ethics & Privileges Committee; and finally, Mr. Emmanuel Okene, who is the Chairman, Finance and membership Committee.

The Doyen of the Maritime industry, High Chief Adebayo Babatunde Sarumi once congratulated SOAN for lifting Nigeria off the lackluster club of 10-Percenters. 

Now, the whole nation would probably look up to SOAN, to midwife a ‘national carrier’ and permanently crash the menace of intractable inflation!

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Smugglers Altering Vehicles’ Chassis Numbers–Customs



Smugglers Altering Vehicles’ Chassis Numbers–Customs

Mr Chedi Wada, the outgoing Comptroller of the Federal Operations Units (FOU) Zone “B”, Kaduna says smugglers are now altering vehicles’ chassis numbers in the bid to perpetuate their nefarious activities.

Wada spoke to newsmen on Wednesday in Kaduna after handing over the leadership of the unit to his successor, Mr  Ahmadu Shuaibu.

He, therefore, underscored the importance of public awareness and compliance with government policies.

Wada reflected on the myriad of achievements and challenges encountered during his tenure.

He commended the resilience of his team in tackling the hurdles posed by nationwide border closures.

According to him, with unwavering support from the Comptroller-General  (CGC), Mr Bashir Adewale, saying that they have successfully curbed smuggling activities within the zone.

He said,  “FOU Zone ‘B’ Kaduna is now well-equipped and effectively managed, marking significant strides during my six-month stewardship.”

Wada acknowledged the pivotal role of the media in showcasing the unit’s efforts while urging the officers to prioritize knowledge acquisition and diligent execution of duties.

He said, “Total commitment and dedication have been the cornerstone of my successes.”

Wada also urged  his colleagues to follow suit,  disclosing that with his redeployment to the NCS Headquarters in Abuja, he will work under the Enforcement, Investigation, and Inspectorate Unit

He also assured of his continued dedication to service, WARING smugglers that his successor is an enforcement expert who is prepared to take charge.

Wada expressed confidence in the incoming comptroller’s abilities to build upon the foundation laid, signalling tough times ahead for the smugglers.

Wada’s redeployment marked the end of his duty of combating smuggling and fostering organizational commitment within FOU Zone “B” Kaduna.

It was reported that until his redeployment, Shuaibu was the Comptroller, Ogun I Area Command, Idi-Iroko. 

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