Connect with us

Business

Economic Crisis: Slump In Port Operations Puts 40,000 Jobs At Risk — Investigation

Published

on

Spread the love

 

A drastic drop in vessel calls into the nation’s ports has plunged operations in the maritime sector into a major crisis as businesses continue to nosedive, following the forex crisis and inflation currently militating against the economy.

Those affected are terminal operators, shipping companies, truckers, licensed Customs agents, and freight forwarders, among others.

Consequently, the volume of vessel calls (the number of vessels coming into the country) has reduced so drastically that terminal operators and shipping companies are struggling to remain afloat.

According to checks, there has been a drop of 4.5 per cent in the number of vessel calls into Nigerian ports, from 3,957 in 2022 to 3,778 in 2023.

Reports from the Nigerian Ports Consultative Council, NPCC, in its quarterly meeting, showed that container traffic declined by 6.8 per cent to 1.56mn 20 Feet Equivalent Units, TEUs, from 1.68mn TEUs in 2023.

For instance, cargo imports dropped by 20 per cent, containerized goods by 30 per cent, and vehicle imports 55 per cent.

It was also learned that a vessel that previously came into the country with 4,000 containers now comes with just 300.

Acknowledging the drop, the Comptroller-General of the Nigeria Customs Service, NCS, Mr. Adewale Adeniyi, said there had been a drastic drop in cargo traffic and encouraged Nigerians to engage in more exports to boost the naira.

Adeniyi, who visited some of the terminals in Lagos, lamented that most of the terminals were empty, noting that import trade has dropped.

Also lamenting the situation, the President of the Association of Nigerian Licensed Agents, ANLCA, Mr Emenike Nwokeji, said: “It is not surprising that last week, it was in the news that SHOPRITE would be closing an outlet in Abuja due to economic crisis currently being experienced in the country.

That is an indication of where the economic pendulum is swinging. Even the man on the street knows that the economy is bad. The government has also acknowledged that the volume of vessel calls has dropped too.

“If any terminal operator is making plans to reduce staff strength, do not blame such operator because the bottom line of any business is profit, so they must have their reasons for their proposed action.

Similarly, a former Vice President of the ANLCA, Mr Kayode Farinto, said: “the unstable exchange rate set by the Central Bank of Nigeria, CBN, for payment of import duty, will continue to lead to further drops in cargo volume at the nation’s seaports if the government fails to take prompt action to address the problem.”

Farinto also said the nation’s seaports had been experiencing a decline in cargo volume in recent months, with many importers and clearing agents struggling to cope with the fluctuating exchange rate.

He lamented that “many importers are currently unable to import due to the unpredictable exchange rate, resulting in a significant drop in import with bulk cargo imports dropping by 20 per cent, containerized goods 30 per cent, and vehicle imports 55 per cent.

“The situation has also been difficult for freight forwarders, with many losing their jobs and some even losing their lives.

“Last Wednesday, the exchange rate was N1,474, by Thursday and Friday morning, it had increased. A cent is important to every businessman because if you are using a bank loan you have to put all these into consideration. We had a week where we had more than five exchange rates. That is not too good for our economy.

“We have three levels of importation. We have bulk cargo, containerized goods and vehicles. The level of import on vehicles has dropped to about 55 per cent, the level of import on containers has dropped to about 30 per cent, and on bulk cargo it is about 20 per cent. So, we are not winning the war.

“The situation has not been very rosy for us in the industry, particularly the freight forwarders. We are not faring well. We have some people who have left the job, some remain thinking tomorrow will be a better day and we have some who have died. I can tell you that we lost a lot of members this year.

“My prediction is that the volume of imports will continue to nosedive if nothing is done. I’m also an importer. If you want to appreciate what I’m saying, go to the Manufacturers’ Association and ask them what they have imported in the last few months.”

Farinto, lampooned the CBN governor for refusing to listen to the concerns of stakeholders, stating that a predictive exchange rate is necessary to enable importers to predict and plan their costs.

“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.

“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.

“The only solution is for us to have a predictive exchange rate for Customs purposes alone. It’s not too much to ask. We pegged the exchange rate for pilgrims going to Saudi Arabia and Jerusalem during Buhari’s era. Why can’t we do the same for importers?

“If they have pegged the exchange rate for import purposes alone at N1,000 since January, importers will be able to predict. We have a lot of importers that are not importing now because they cannot predict the foreign exchange, FX, rate.”

In his remarks, Asconio Russo, Managing Director of Port and Multi-Purpose Terminal Limited, PTML, confirmed that the last two years had been very challenging for the terminals and the country generally.

‘Blame inflation, naira devaluation’

Russo blamed the situation on the devaluation of the naira and the trending inflationary rate.

He said: “This is a very difficult moment; we cannot shy away from the fact that in the last two years, our company and Nigeria, it has been very challenging, the rate of the devaluation of the Naira, the high rate of inflation and the cost of living has gone through the roof.

“The situation has had an impact on our port activities. Just to give you an idea, our port is the largest Roll-On-Roll-Off, RORO, port in West Africa which means our mainstay is the car business.

“We do containers, we do a lot of export, the export figure has improved a lot and we are pleased about it but the car business for which we are known has collapsed in the last two years.

“So, the volume of vehicle import is down by 80 per cent and of course, this has put a huge strain on our finances but that does not mean we will shy away from responsibilities.

Investigation revealed that if urgent measures are not taken to address the issue of high exchange rate, over 40,000 jobs will be at risk across port formations in the country.

This includes direct and indirect staff, comprising employees of terminal operators, shipping companies, dockworkers, truckers, and clearing and forwarding agents, among others.

Sources disclosed that no fewer than 25,000 direct jobs and over 15,000 indirect jobs, including support staff, might be jeopardised should the trend continue.

The President-General of the Maritime Workers Union of Nigeria, MWUN, Prince Adewale Adeyanju, said in his reaction: “Since the past year, when the new government came in, things have been tough. The exchange rate has made things so tough.

‘’Investors in the maritime sector have grounded operations. In some companies, there have been redundancies.

“You know we have four branches, it is when the port is in full swing you talk of membership. If the port is not operating well or booming and the harsh economy is affecting everyone, things are tough with all our management.

“A vessel that used to come with about 4,000 containers has been reduced to 300 containers.

Can you see the gap? It is affecting the dockworkers, and shipping workers because we work daily, on payment by tonnage. The economy has dealt with all the workers in the maritime sector.

“Already, redundancies have started taking place. I can’t tell you the figure now, I can only cite a terminal for now where almost 200 to 300 workers have been pencilled down for redundancy.

‘’That is Tin-Can Island Container Terminal, TICT, one of the prominent terminals.

It used to have 1,000 workers and above. Hardly do you see three vessels in one terminal in a month. So, it is as bad as that.

‘’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.”

Meanwhile, while private sector operators in the ports are lamenting, the Nigerian Ports Authority, NPA, in the first quarter of 2024, recorded a total of 20.1 million metric tons of cargo, compared to 17.4 million metric tons in the last quarter of 2023, representing an increase of 15.04 per cent.

Cargo throughput is a measure of the volume of cargo handled at a port or terminal over some time. It provides insight into the volume of the goods being transported and traded through a particular port.

Data from the NPA showed that the inward cargo throughput recorded for the first quarter of 2024 was 12,105,390 as against 17,476,212 between October and December of 2023.

A breakdown of the figure also showed that a total of seven ports were examined across the country, they include Apapa, Tin-Can Island, Calabar, Warri, Port-Harcourt, Onne and Lekki Ports.

The breakdown further showed that Apapa port recorded the highest figure with a total of 4.960,359 million metric tons of cargo indicating that inward cargo (imports) throughput recorded was 4.329,339 in 2024 while the last quarter of 2023 recorded 630,873 (exports).

For Lekki Port, which was in the second position with a total of 2.629,178 metric tons of cargo throughput recorded inward cargo throughput of 2,006,626, (imports) in the first quarter of 2024 as against 622,553 outward cargo throughput of the last quarter of the preceding year.

Tin-Can Island port took the third position with an inward cargo throughput of 2.627,369 metric tons, (imports) in 2024 while outward (export) cargo throughput recorded 330,369 metric tons in the fourth quarter of 2023.

Onne Port in Rivers State, because of peculiar operations in oil and gas, recorded the highest volume of cargo throughput as a total of 5.565, 398 million metric tons was recorded for the first quarter of 2024 just as the same figure was also recorded in the last quarter of 2023.

A breakdown of the figures at Onne Port showed that a lot more export was recorded as a total of 4.712,298 million metric tons were moved out of the country against 873,100 metric tons within the period under review. The same was also recorded for the last quarter of last year.

Meanwhile, Calabar port recorded the lowest tonnage of cargo as only 493,802 metric tons of cargo was handled in the port in the first three months of 2024. The record also showed that a total of 491,773 metric tons of cargo came in through the port while a paltry 2,029 metric tons was recorded as outward cargo.

Speaking on the revenue milestone recorded by the NCS, Farinto stated that the high revenue is merely a result of the increased exchange rate, noting that it is not a cause for celebration.

He said “If you look at my analysis of the Customs C-G, Adewale Adeniyi, I scored him 55 per cent on revenue. Nobody has deemed it fit to ask me why. If you generate revenue at an exchange rate of N1,900, it is obvious that your revenue will increase. It’s simple arithmetic.

“You need somebody with the technical know-how to tell you that you are not supposed to celebrate and that’s why I scored him 55 per cent. It’s a very technical thing.

“Of course, you should expect that the revenue will increase because if you have 40 cargo last year within this period and now let us even assume that you have 20 cargoes, but you are generating at N1,700 per dollar your revenue will increase. That’s why I said we are not supposed to celebrate.”


Spread the love
Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Copyright © 2023 Instant News Naija

× How can I help you?