Imports: Senate wades into exorbitant charges by shipping companies

 

The Senate has waded into the exorbitant increase and unjustifiable shipping fees charged by shipping and cargo companies to Nigeria.

The decision to do was reached on Wednesday during plenary after the upper chamber considered a motion to that effect sponsored by Senator Ifeanyi Patrick Ubah (YPP, Anambra South).

In his presentation, Ubah noted that while Nigeria is an import driven economy with excessive dependence on imports for consumption and capital goods, the shipping sector is key in facilitating the continuity of economic activities by ensuring supply chains to industries, transportation of essential goods, including energy and food supplies, and transportation of vital medical and protective equipment in Nigeria.

According to the lawmaker, “vessels coming to Nigeria Port queue longer when compared to other countries (30 days) before bathing at our Port due to various charges; adding that, “the cost of shipping goods into Nigerian Ports is amongst the highest in the world, with the figure for Apapa Port costing more than thrice of that to Tema, Ghana, and five times higher than that of Durban, South Africa.”

He expressed worry that a report on overseas cargo and freight costs by Mover DB, an online resource for international shipping shows that the cost of shipping both 20-foot and 40-foot containers to Lagos is among the most expensive globally.

Ubah lamented that, “the astronomic and unjustified charges are so high that importers in most cases abandon their cargoes in the Port, thereby making the N PA lose revenue and reducing the efficiency and turnaround of ships to Nigerian Parts.”

He added that, “a close look at charges in other countries shows fees charged by shipping/cargo companies from China: Ghana $3, 200 from China; Cotonou $3, 000 from China; and Nigeria $8, 500 from $3, 200 few months ago.”

The lawmaker said that “this has caused unjust hardship to Nigerians as Importers transfer expenditure to both traders and consumers.”

He noted further that in May 2017, Vice President Yemi Osinbajo, who was Acting President at the time, signed an Executive Order directing 24-hour operations at the Apapa Port and outlawing unofficial charges at the Ports.

Ubah pointed that despite Osinbajo’s order aimed at improving the ease of doing business and reducing the costs at the Ports, available statistics suggest that these unjustifiable charges and extortions by shipping agencies and law enforcement officers at the Ports have continued till date.

According to him, the imposition of these exorbitant charges on Nigerian-bound cargoes from $3 500 to $58,300 by shipping companies was introduced at a time when the nation is still trying to get out of the economic impact of the COVID-19 pandemic.

The lawmaker, while raising alarm that the arbitrary introduction of excessive shipping charges would strangulate Nigerian shippers and importers, warned that if nothing is done to defend Nigeria from such economic sabotage, the  development is capable of causing a spiral inflation rate on the country’s economy.

The Senate, accordingly, mandated its Committee on Marine Transport to engage with the Stakeholders in the Shipping Industry and Nigeria Port Authority with a view to proffer solution to the matter.