Nigeria losses N150bn yearly to foreign shipping companies surcharges

Abiola Seun

Nigeria economy losses a whopping N150 Billion yearly to multiple surcharges slammed on Nigeria bound cargoes by foreign shipping companies.

This was disclosed yesterday at a three Day Sub-regional Summit tagged, “Unfair Shipping surcharges and High Local Shipping Charges At the Ports of West and Central Africa,’’ organised by the Nigerian Shippers’ Council (NSC) under the auspices of the Union of African Shippers’ Council (UASC).

According to a study on Impact of Unfair Surcharges and High Local Shipping Charges on National Economies of West and Central African States, Nigeria as a Case study, on the Europe-Nigeria trade route, the number of multiple surcharges on Nigeria bound cargo and the estimated loss to the Nigerian economy due to additional ‘Local Shipping Charges’ on imports exceeded N150 Billion in a year, a report on ”

Theses surcharges are Bunker Adjustment Factor, Currency Adjustment Factor, War Risk Surcharge, Congestion Surcharge Peak Season Surcharge.

Others are, Extra Risk Insurance Surcharge, Freight Rates Surcharge, Port Operations Recovery Surcharge among others.

However, vice president, Prof. Yemi Osinbajo has rued the slamming of surcharges on Nigerian bound cargoes by foreign shipping companies.

The vice president who was represented by the Minister of Transportation, Rotimi Amaechi bemoaned the process of the introduction of the surcharges which he said lacks transparency and not based on verifiable and available resources.

According to him, the surcharges amount to huge sums of illegal capital flight from Nigeria and the other West and Central Africa countries.

He said, “These surcharges amount to huge sums of illegal capital flight from the countries of the sub-region depleting their limited foreign exchange/reserves.

For instance, data obtained from Nigerian Shippers Council (NSC), confirmation of reasonableness of demurrage charges for Central Bank of Nigeria (CBN) revealed that more than 2 Billion is repatriated by multinational shipping companies in a quarter of a year.”

The vice president further stated that the introduction of surcharges without consultation contradicts the norms and ethic of maritime transportation.

“The process of introduction of theses surcharges lack transparency and are not based on verifiable and available statistics.

“In addition, the unilateral and arbitrary imposition of such surcharges on West and Central Africa bound cargo contradicts the norms and ethics of maritime transport.”

He however advised that the sub-region must at the summit adopt a common position on reduction of incidences of unfair surcharges and related issues.

“The federal government of Nigeria through the Nigerian Shippers’ Council has put I place a machinery to address some of the challenges posed by high cost of doing business in Nigeria.”

“For instance, in 2018, NSC harmonised the tariff nomenclature for local shipping charges in Nigeria, established a sustainable framework for future review of tariffs and established standards of service for all container terminals in Nigeria.”

Speaking earlier, the executive secretary of the the council, Barr. Hassan Bello argued that according to United Nations Conference on Trade and Development (UNCTAD), surcharges are supposed to be a temporary measure to address a peculiar challenges.

Bello however regretted that a temporary measure has assumed a permanence basis and stated that arbitrary and unilateral increase in charges wouldn’t benefit operations or general procedures in the country.

His words, “According to UNCTAD, surcharges are supposed to be temporary measures by shipping lines involved in the shipment of goods worldwide to address peculiar challenges at destination and are subject to removal when the situation normalizes. Regrettably, some of these charges have assumed a permanence without justification or basis for negotiation.”

“In conclusion, it is important to state that in the long run, arbitrary and unilateral increase in charges would not benefit operations or general procedures in our countries. A chaotic, unbridled situation of sporadic sometimes astronomical pricing regime is adverse to the development of shipping. It is a lose-lose situation.”

“Transport should be scientifically, fairly and appropriately priced with the aim of providing balance and equilibrium. A fair and level playing field for all parties,” he said.

He also charged other member nations of Union of Africa Shippers’ Council (UASC) to collaborate to end the capital flight through illegal surcharges.

“The UASC member states must collaborate to remove unfriendly policies or circumstances that provides the opportunities for arbitrary increase of surcharges and local shipping charges.”