Import Disruption Looms as Clearing Agents Threaten to Withdraw Services Over Hike in Port Tariffs

• There are heated tensions over the state of imports in Nigeria once the increased port tariffs take effect
• Nigeria is a highly import-dependent state with up to 80 per cent consumption based on importation
• Stakeholders in the industry say hike in tariffs could increase overall business costs by up to 100 per cent

Legit.ng journalist Ruth Okwumbu-Imafidon has over a decade of experience in business reporting across digital and mainstream media.

Nigeria’s import sector is set to witness major crises due to growing tensions over the 15% hike in port tariffs.

The Nigerian Ports Authority (NPA) recently hiked the port tariffs by 15%, the first in over three decades.

This move triggered a lot of reactions nationwide, with several warnings that it was counterproductive to the government’s plans to drive down inflation.

NPA explains hike in port tariffs

Explaining the recent tariff hike, NPA Managing Director Abubakar Dantsoho said it was necessary due to rising inflation in the country.

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He noted that it would also help fund new technology for the port community system (PCS) and national single window (NSW).

Several expert analysts warned against the move, projecting that it could increase business costs and worsen inflation.

Experts warn NPA against tariff hike

The most recent warning came from the Lagos State Chambers of Commerce, with suggestions on other ways to raise funds for port modernization instead of raising tariffs.

Recall that the Nigeria Customs Service recently suspended the 4% FOB fees, as a way to moderate the costs of imported goods.

Industry players are now calling on the NPA to apply the same logic to its recent move, as there is already a decline in cargoes at the ports, the GUARDIAN reports.

The National Public Relations Officer of the Association of Registered Freight Forwarders of Nigeria (AREFFN), Mr. Taiwo Fatomilola, described the hike as insensitive as it would affect other port charges and levies, and cause a spike in business costs down to local traders and farmers.

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He noted that it was particularly sensitive because Nigeria is largely import-dependent and the end effects of chain reactions will be transferred to the citizens.

Clearing agents may withdraw services

The CEO of Globe Joy Investment Nigeria Limited, Mr. Clinton Ikechukwu Okoro, noted in his response that the move could lead to a 100% increase in duties and worsen economic woes for both businesses and Nigerians.

He explained that for a 40ft container, they formally paid about N13 million as surface duties to clear the containers and it later increased to N16 million. Under the hiked tariffs, the cost could surge past N20 million for a 40ft container, making business unsustainable for them.

He projected that some clearing agents could withdraw their services if the heat became unbearable.

NPA borrows for port rehabilitation

In related news, the NPA secured a $700m facility from Citibank funded by the UK Export Finance (UKEF) to rehabilitate the Apapa and Tin-Can Island ports in Lagos.

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The NPA also announced that it had opened talks with another agency to fund the upgrading of the Eastern Ports.

These include the Calabar, Warri, Onne, and Rivers Ports, and the reconstruction of the Escravos breakwater.

Source: Legit.ng