- Reduction in the number of vessels coming into the country is putting around 40,000 jobs at stake
- The proposed solution is to establish a predictive exchange rate specifically for Customs purposes
- However, the Cenral Bank of Nigeria is reportedly ignoring the concerns of stakeholders
Terminal operators and shipping companies are facing immense challenges to stay afloat due to a sharp reduction in the number of vessels coming into the country, putting around 40,000 jobs in danger.
The Comptroller-General of the Nigeria Customs Service (NCS), Mr Adewale Adeniyi, acknowledged the decline in import trade and lamented the empty state of most terminals during his visit to several terminals in Lagos.
The President of the Association of Nigerian Licensed Agents (ANLCA), Mr. Emenike Nwokeji, also speaking on this challenge, stated that if any terminal operator plans to reduce staff, they should not be blamed because the primary goal of any business is profit and they must have their reasons for such an action.
Factors contributing to maritime crisis
Expressing his concerns, the President of the Association of Nigerian Licensed Agents (ANLCA), Mr Emenike Nwokeji, remarked that it was unsurprising to hear last week that Shoprite would be closing an outlet in Abuja due to the country's current economic crisis.
Similarly, a former vice president of the ANLCA, Mr Kayode Farinto, stated that the unstable exchange rate set by the Central Bank of Nigeria (CBN) for import duty payments will keep causing declines in cargo volume at the nation’s seaports unless the government takes swift action to resolve the issue.
Farinto also mentioned that the nation’s seaports have been seeing a decline in cargo volume over recent months, with many importers and clearing agents struggling to manage the fluctuating exchange rate.
He lamented that the unpredictable exchange rate is currently hindering many importers from importing, causing a marked decline in imports: bulk cargo has decreased by 20%, containerized goods by 30%, and vehicle imports by 55%.
Asconio Russo, Managing Director of Port and Multi-Purpose Terminal Limited (PTML) acknowledged in his comments that the past two years had posed significant challenges for both the terminals and the country as a whole.
Russo identified the devaluation of the naira and the current inflation rate as contributing factors to the situation.
Impact of the ongoing maritime crisis
According to Russo, there are three levels of importation: bulk cargo, containerised goods, and vehicles. Imports of vehicles have decreased by approximately 55%, containerised goods by about 30%, and bulk cargo by around 20%. We are not prevailing in this challenge.
He further said the industry hasn't had an easy time, especially for freight forwarders.
"It's been a struggle. Some have left their jobs, others are holding on with optimism for better times ahead, and sadly, we've lost members. We've lost a significant number of members this year," he added.
Relatedly, the President-General of the Maritime Workers Union of Nigeria, (MWUN), Prince Adewale Adeyanju, said operations in the maritime sector have been suspended by investors, leading to layoffs in several companies.
"The number of containers arriving on a vessel has drastically dropped from 4,000 to only 300. This significant gap is affecting dockworkers and shipping personnel who depend on daily wages based on tonnage. The economy has had a profound impact on all workers in the maritime sector.
Layoffs have already commenced. While I don't have specific numbers currently, I can highlight one terminal where approximately 200 to 300 workers are facing potential redundancy.
He added that Tin-Can Island Container Terminal (TICT), one of the leading terminals, previously employed over 1,000 workers but now struggles to get three vessels in a single month.
‘’If we tell you 200, 500 workers or this is the number that has been pencilled down for redundancy, we don’t know what other people are planning. All I know is that some of the terminals and some of the shipping companies have placed our members on red alert. That means, if this thing continues, there is no way they will continue to be paid salary,” Prince Adewale stated.
Proposed solution to maritime crisis
Farinto criticised the Central Bank of Nigeria (CBN) governor for ignoring the concerns of stakeholders, arguing that a stable exchange rate is crucial for importers to forecast and manage their costs effectively.
“I keep saying we have a CBN that is so arrogant they believe because of their new law that has been amended they can do whatever they like. I told the Comptroller-General of Customs that he is not helping issues. Negotiate with the CBN, draw them to the Minister of Finance, sit at a round table and involve us,” the former Vice President of the ANLCA stated.
He further said, “I also suggested a tripartite meeting between CBN, Customs and Ministry of Finance or CBN, Customs and freight forwarders and we will tell the CBN that what they are doing is not helping the economy and if we continue like this, the economy will just go in shambles. Perhaps they will listen to us but till now nothing has been done about it.”
Farinto noted that the solution is straightforward. What needs to be done is to establish a predictive exchange rate specifically for Customs purposes.
Lagos State to transform its transport sector
Meanwhile, TheRadar earlier reported that the Lagos State Government plans to transform its transportation sector by installing CCTV cameras, introducing transport police, and other measures.
According to the report, the policy would be implemented in phases: within two years, two to five years, five to ten years, and up to 15 years.