LEKKI PORT: Stakeholders Canvass Tax Rebate for Terminal Operators, Predict Stiff Competition

By DAPO OLAWUNI

Stakeholders in the Nigerian maritime sector have called on the Federal Ministry of Transportation and Nigerian Ports Authority (NPA) to consider creating a tax rebate for terminal operators who are controlling the existing ports in Lagos and eastern Nigeria.

At a consultative meeting prompted by the former National President of Association of Nigerian Licensed Customs Agents (ANLCA) Prince Olayiwola Shittu, former Chairman of Council for the Regulation of Freight Forwarding in Nigeria (CRFFN) and the former National President of National Association of Government Approved Freight Forwarders (NAGAFF) Dr Eugene Nweke recently in Lagos, it was noted that with the completion of the Lekki Deep Seaport, the existing ports might start losing cargoes due to competition.

In a statement issued at the end of the consultative meeting which was sent to DAILY TREND, the stakeholders noted that Lagos ports would now face stiff competition with the Lekki Deep Seaport, and that if care is not taken, the existing ports will become feeder ports.

The stakeholders have therefore called on the government to consider these challenges, especially as the review of port concession agreement is currently ongoing.

The statement reads in part “With the increase in the volume of world trading activities on the sea ( imports and exports), it is considerate to posit that, the size and efficiency of a Port is an indication of how successful the surrounding regions are, as such ports are vital components of shipping business.

“Unfortunately, with noticeable port congestion and traffic gridlock in and along our port corridor, the economic benefits of port concession of 1996 seems to be an uphill tasks, and the core objective almost a mirage. This situation has thrown up new industry sections like Barge operations, increasingly bonded terminal operational activities, unfortunately regulatory function is not promptly coordinated, leading to the high costs of shipping and port business in Nigeria, unfriendly and uncompetitive.

“The meeting noted that with the commissioning of the first deep Seaport, even as it sets for full operations, it has become necessary and also advisable that the crop of brown ports managed by private operators has to square up for competition to avoid serving as a mere feeder ports.

“In this regards, the on going negotiations for port concession renewals, should consider such critical industry components ranging from the right definitions of operational activities and phrases and operational rebates and lax tax regime. The meeting resolved to further its consultation with the concerned agency (s), with the aim to genuinely brainstorm”

According to the statement, the stakeholders consultative meeting also touched on other professional issues captured below

“The evolution of the SMART BORDERS Concept, which is in support of the Sustainable Development Goal ( SDG) of the United Nations ( UN) Agenda 2030. It recalled that, the Concept makes room for Customs to ensure:
i. Timely delivery of raw materials to industries.
ii. Reduce unfair business competition.
iii. Open opportunities for all business interests to access Raw Materials.
iv. Creates a transparent, conducive and predictable conditions for trade/passengers.
v. Facilitate legitimate trade that will in turn contribute positively to economic growth , as well as boosting job creation.
■. In this direction, the meeting resolve to carry out a robust review on the level of compliance to the SGD from the Nigeria freight forwarders perspective, and document same for a global representation. Equally, the meeting took a holistic review of the present clearance process and procedures within the Customs Ports, with deep reservation even though, commending its efforts at reinstalling mobile scanner machines at some ports. It therefore, resolve to further its professional consult and engagement

“Afterwards, the consultative meeting narrow its reflection for the day on the following global concerns :
a). Today Freight Forwarding practices revolves around a Growing E-Commerce Logistics Solution – where information communication technology drives the international trade security and value adding supply chain.
Notably, both the World Trade Organization and World Customs Organization now focuses attention on “Exploring the Integrated E-commerce Logistics Solutions “.

b). Revisit the current annual growth rate in the thriving: Business to Customer ( B2C), Business to Business (B2B) and the Producer to Consumer (P2C). It noted the grappling challenges inherent in this increasingly demanding innovative logistics solutions. Wherefore, it posited that, there will be need to chant a course towards the growing need to choose the right kind of Customs procedures that will open new potential for improvement and advancement of the evolving new markets concepts.

c). Reconsider the update and possibly outcome of the WTO treatise consideration to E-commerce, especially as it relates to the ‘plurilaterals’ discussion following the proposals submitted by the ‘plurilaterals’ members, among the developing countries, including Nigeria, expressing their discomfort with the US model of digital trade rules centered around “Free Data Flows”.

d). Expresses serious concerns on the E-commerce Moratorium. Though the WTO’s Customs Duties E-commerce Moratorium has been halted since 2019. However, the increasingly globalization disruption points to the fact that, trading goods electronically may not be easy to abate. As such this Moratorium if continued may mean a continuation of Zero customs duties on goods which are traded via electronic transmissions. Above all there will be tariff revenue losses as well as the loss of policy space for those who may try to support their domestic industries in electronic traded goods.
In view of this, the meeting resolved to further its strategic consultative goals with the management team of the Nigeria Customs Service, as it stands, without mincing words the Customs can not boast of deploying requisite energy in this aspect of trade model and inherent revenue generation thereof.

e). The meeting as well contemplated on the options to discuss and kick start a domestication process for the FIATA newly introduced two (2) globally approved and applicable imports clearance documents across the WTO signatory countries.
However, the meeting resolved to stare action for a while, with a convince that the man made crisis in the CRFFN will fizzle out soonest, so as to prompt the essence and effectiveness of the freight forwarders consultative forum obligations”