How NPA’s N50 Million Bond Requirement Is Stifling Our Operations, Barge Operators Report to Shippers Council

By DAPO OLAWUNI

Apparently taking its regulatory functions very seriously, the Nigerian Shippers Council on Wednesday embarked on a strategic visit to the National Secretariat of the Barge Operators Association of Nigeria (BOAN) in Apapa Lagos, even as the Council sought to find out the challenges confronting the operators in breaking-even with their business.

The Shippers Council team was led on the visit by the Deputy Director, Inland Transport Services Department, Mr Nanbol Nanle, Deputy Director and other officials of the department.

Speaking at the strategic meeting, National President of BOAN, Hon Olubunmi Olumekun said that the major challenge confronting barge operations in Nigeria is the N50million registration slammed on the practitioners by the Nigerian Ports Authority (NPA)

He said that due to these charges and other unfriendly policies of the Federal Government, many indigenous barge operators have given up on the profession and venturing into other businesses.

According to him, BOAN as an association has contributed immensely to the growth of the Nigerian maritime sector, especially as regards cargo evacuation from the ports and transportation of export cargoes.
In terms of employment generation, he noted that the association members control more than 2,000 barges, with 13 crew onboard each of the barges

“The truth is, some government policies are killing the business. Good policies can drive an industry, while bad policies will destroy it. The issue isn’t necessarily the revenue generation, but the way it’s done. Revenue is essential for the nation, but it has to be balanced to promote growth.

“We have about 82 companies in this association, many of which have several boats and tugboats, each employing numerous crew members. You can see the sheer number of people and businesses affected by these policies. But despite our efforts, the government hasn’t heeded our calls.

“We’ve suggested improvements and even proposed legislation to fix these issues.
For example, policies like the requirement for a 50 million Naira bond just to get a license are crippling. In more advanced countries, they use insurance bonds, not cash. But here, we have to lock down millions in a bank, doing nothing for an entire year. If that money were invested in the business, it would make a huge difference.

“We’ve talked to the government, proposing solutions such as making the movement of export cargo and empty containers more efficient. If that happens, we can move containers quickly and reduce the number of trucks congesting the roads.

“This would help decongest the ports and create a more efficient system.
The current situation is unsustainable. We need policies that will help save the business and make things easier for everyone involved” he said

The Director of Finance of BOAN, Hajia Bola Muse stressed the need for NPA to take a cue from the Nigeria Customs Service in registration of its licenses. According to her, the imposition of the N50million bank bond by NPA has presented many barge operators from registration of their businesses.

“I believe that barge operators could be the solution to many challenges we face in the maritime industry, especially with the issues we encounter on the roads while transporting goods to the port. The key takeaway here is that as barge operators, we need the assistance and collaboration of the Shippers Council.

“My President has already highlighted a pressing issue—the N50 million bond that the NPA has imposed on us. I believe that when it comes to obtaining a Nigerian customs license, there was a time when customs required a bank cheque, but after negotiations, they reduced it to an insurance bond, which we proposed to the NPA. However, this N50 million bond is still a major hindrance for many of our members.

“Submitting an application to process the bond and license with the NPA is incredibly costly. This is one of the main barriers preventing our members from registering and obtaining their licenses.

“Meanwhile, we are seeing many foreigners take over our business activities because they have the financial means to do so.

“Many of us feel powerless, watching as these foreigners dominate. We are asking for collaboration and support, especially regarding the insurance bond, similar to how customs now operates.

“We’ve also discussed the high costs we are paying for license renewals and processing, but they (NPA) have made it clear that there will be no changes.

“For instance, a customs license costs only N250,000, while with the NPA, we’re paying nearly N2 million, along with various loans. We need your help to address this issue. If we can use the insurance bond, it would greatly benefit our members and encourage more of them to apply for their licenses” Bola Muse stated

Also speaking, Alhaji Nura Wagani, BOAN Director of Enforcement and Operations, urged the Shippers Council to allow barge operators to be registered as an association, rather than registering individually.
“This is necessary so we can provide you with updated data on our members. Instead of individual companies doing everything on their own, some of which also operate in trucking and shipping, we need a collective registry for barge operators. This way, you will know exactly where to find us.

Wagani also lamented activities of port terminal operators, saying that moving containers from the seaport to the inland is a nightmare because of the high operational costs.

According to him, these concessionaires seem to encourage imports while discouraging exports, which goes against the government’s desire to promote the non-oil sector and boost exports.

“For some reason, they impose higher tariffs on exports compared to imports. In some cases, they charge three, four, or even five times more for exports than imports, even though the operations are the same.

“For example, some terminals charge N190,000 per container for exports but only N50,000 for imports. This discrepancy is something we need to address by calling the terminal operators to order and working towards a more balanced approach, maybe even a 50-50 split, to reduce the burden on exporters”

Wagani also called on the Shippers Council to assist barge operators in getting collaboration and support from the financial institutions in Nigeria for easy access to loans.

“Banks don’t honor requests for funding, and even if you’re lucky enough to access a loan, the interest rates are crippling. Meanwhile, foreigners have easy access to offshore loans with much lower interest rates, making it impossible to compete” he lamented

Speaking in the same vein, General Sanni Saheed, Director of Compliance for BOAN lamented that the charges by terminal operators is severely impacting the profits of barge operators and making it difficult for them to stay afloat.

Apart from paying N50million NPA registration, he said the NPA requires operators to pay N80,000 for movement clearance on each voyage, and terminal operators collect N170,000 per unit, plus terminal charges. Meanwhile, barge operators do not charge more than N400,000 from importers.
These according to him is making port users embrace road transportation more than barge evacuation of cargoes.

“With all these expenses, it’s challenging to cover asset renewals, staff payments, and other operational costs, especially since banks in this country offer little support. If you’re using your own capital for business, these tariffs could drive you out of business.

“Regarding imports, if the cost for a box is only 50,000, why are export charges so high? We are contributing to federal revenue through exports, yet these high charges erode our profits and add to our logistical costs. It doesn’t make sense” he said

Speaking earlier, the Nigerian Shippers Council Deputy Director, Inland Transport Services Department, Mr Nanbol Nanle noted that a critical agency that the barge operators need to be closely related to is the Nigerian Shippers Council.

“When you mention high charges and fees, it’s clear that these issues are a barrier. We need to address these challenges to make inland transport and barge operations more efficient and to reduce congestion.

“This engagement is just the beginning. We plan to further discuss these issues and will need a list and addresses of your members to facilitate this. Our goal is to address these concerns through formal meetings and ongoing discussions.

“We have recently held meetings with the Nigerian Railway Corporation and the Federal Road Safety Corps to discuss cargo movement and safety. Now, we need to address inland waterways and barge operations.

“Your input on these issues is crucial. We are committed to pushing for improvements, although some challenges may be beyond our immediate control. Political will and executive determination are essential for meaningful progress.

“We are aware of the significant cargo loss to neighboring ports and the need for improvements in our own ports. We will issue a letter to formally articulate these issues and work towards solutions” he assured

The Shippers Council Deputy Director noted that as economic regulator of the ports, the Executive Secretary of the Council, Barr Pius Ukeyima Akutah is determined and striving to ensure seamless cargo evacuation from the ports.

“There needs to be functional integration of all modes of transport—road, rail, and barge. This is what we are striving for at the Nigerian Shippers Council.

“So, what is the objective of our visit today? Our goal is to meet with the Council’s Board on Economic Regulation and to discuss with the association for a better understanding of your operations, especially regarding cargo evacuation.

“We are here to explore possible areas of collaboration to ensure the smooth movement of cargo through the waterways. We are also interested in understanding the current policies around cargo container evacuation, safety, and other related issues.

“Cargo evacuation is a key issue for us, and it is something we need to address collectively.
We aim to take this discussion beyond just meetings at the Council. At some point, we need a national forum where the government, private sector, and other stakeholders can come together to discuss these issues comprehensively and find solutions to ensure seamless cargo movement.

“We would also appreciate it if the association could share information regarding your members’ contacts and activities. It is essential to have accurate data on the movement of cargo, especially by barge, as this will allow us to plan and regulate effectively” he said