PROTESTS: Expert Calls on FG to Slash Port Logistics Costs Amidst Economic Crisis

By DAPO OLAWUNI

A freight forwarder and Logistics Supply Chain Expert, Francis Omotosho has highlighted that the economic meltdown and ongoing protests in Nigeria stem from the high cost of logistics expenses and customs duties, driven by the Federal Government’s high revenue targets.

Omotosho stated this in a press release on Wednesday.

To alleviate the current economic crisis in Nigeria, Omotosho who is the Registrar of the National Association of Government Approved Freight Forwarders (NAGAFF) Academy, urged the government to address these high costs as a means to solve the lingering poverty and hunger in the land.

While the government under President Bola Tinubu recently removed import duties on some food items, Omotosho believes more actions are needed, such as reducing port dues and charges and eliminating certain levies, fees, and taxes imposed by non-revenue generating agencies like NAFDAC, SON, NAQS, and NESREA.

“These costs significantly impact every import and export supply chain, compounded by demurrage and the over-reliance on imported goods, which contributes to high dollar exchange rates.
The time to reduce cost is now,” Omotosho emphasized.

He noted that many manufacturers are closing down and relocating out of Nigeria due to the high national logistics costs.

“You could see now that the government had removed import duty on some food items. But I expect the government to also reduce port dues and charges; as well as remove some levies, fees, and taxes by some government agencies who are not revenue-generating agencies but impose high costs of regulation and control on major fast-moving consumer goods (FMCG) such as NAFDAC, SON, NAQS, NESREA etc.”

Omotosho explained that the registration fees and levies for these agencies significantly impact every import and export supply chain cost, coupled with demurrage caused by deliberate delay tactics of terminal operators.

“Our over-dependence on imported goods has brought about an imbalance in our trade system, consequently resulting in a high cost of dollar exchange rate,” he said.

“The major challenge shippers (Importers and Exporters) have in Nigeria is the logistics system costs expenses in their delivery supply chain,” Omotosho explained.

“Shippers can easily negotiate their invoice cost with their buyers or sellers but cannot determine the total logistics expenses to incur at all our international trade entry points (Seaports, Airports, and Land Border Posts).”

Omotosho concluded by reiterating the urgent need for the government to address these issues to prevent further economic decline and the exodus of manufacturers from Nigeria. “Many manufacturers are closing down and moving out of Nigeria because of our High National Logistics Systems,” he warned.

In the recent Logistics Performance Index by the World Bank, Nigeria ranked 95th, falling behind other African countries like South Africa, Egypt, and Benin Republic.