As We Move Into 2019

 This year is unique, because it is an election year. It elicits anxiety as to what happens after the elections in February and March. It also offers an opportunity to appraise how the nation’s maritime industry has fared; not just in 2018, but also since the emergence of the present administration in 2015.

If 2015 was for exploration or experimentation by the  then-new All Progressives Congress (APC), what do we say about the years after it?

The party didn’t prepare the 2015 budget, but it did for 2016, 2017 and 2018. So it must be held accountable for the inadequacies therein, especially for the dashed hopes for the nation’s maritime industry.

We recall the economic  pains and near melt down  which characterized  2015 and  2016, during which importers groaned over  the unexpected fall in the value of Naira against major global currencies; especially US Dollars, Pound Sterling and Euro. Certainly, 2016 gave a lot of hurting punches to the Nigerian maritime industry.

 Even though the value of Naira eventually stabilized marginally in 2017, when compared with what obtained in 2016, it was still difficult for importers.

From the importers, to clearing agents, to ship owners, haulage operators, stevedoring companies, the story is the same. It is perhaps worse for those who either work or live in the port city of Apapa and its environs.

For the importers, the agony of 2018 was about accessibility and cost of foreign exchange, for the customs licensed agents, it was the usually cumbersome and high cost of cargo clearance, for the ship owners it was the same old story of lack of patronage and dominance of foreign ship owners.  For the owners/drivers of articulated vehicles that are used for dry and wet cargo haulage, 2018 was worse. For residents, port users and all who either work or have businesses in Apapa, 2018 was full of pains.

Just like in 2017 when government mounted pressure on the maritime sector for revenue, owing to the drop in earnings from crude oil, attention was on the sector for revenue for the government in 2018.

We recall that, from an exchange rate of about N280 to 1$ in 2015, the Naira was plummeted to as high as N480 by end of 2016. But, it stabilized at N360 to a Dollar in 2017. The same ratio applies to Euro and Pound Sterling which navigated around N400 and N450 respectively in 2017. But, in 2018, it went higher.

For an import-dependent economy, the Nigerian importer was confronted with a terribly-unfriendly import policy, especially the continued shut-out of 41 items from the official foreign exchange window. 

In response to these policies, the ports started experiencing down turn in vessel and cargo traffic.  But, the Nigerian Ports Authourity said all was well in 2018, and that more ships came into Nigeria than  in the previous years.

Although, final figures of cargo throughput at various ports for 2018 were still being compiled by the NPA, various stakeholders confirmed that importation dwindled last year. 

Even though it is beating its chest, the more-than N1trillion that the Nigeria Customs Service collected in 2017 and in 2018 has been attributed to arm-twisting of importers and clearing agents by its officers and high duty collected on all imports. They also attributed this to the fall in Naira value.

Of course, the ban on importation of vehicles through land borders also aided the high revenue collected by the terminal operators, the NPA, Customs and others.

At the risk of being called a pessimist, it is unlikely that 2019 will be any better for the industry than 2018. This however does not indicate that agencies of government will not generate revenue; they will. But the state of infrastructure decay may continue.

The unfriendly nature of the industry didn’t start last year; in fact it began in 2014 when the price of crude oil started dropping.  Since that year, the price of oil has been falling unprecedentedly. The 2015 budget was predicated on crude oil price of $73 per barrel, 2016 was lower, while 2017 is far lower, and 2018 is predicated on $45 per barrel of crude oil, 2019 is a little higher.

It is not likely that compared to 2018, there would be much different in the fiscal policies of the Government. Even though it is not our prayers, all these are signs that 2019 may not be any better than the year before it.  

No doubt, this year will further test the staying power of maritime industry stakeholders.

Apart from the fiscal policies and their effect, a critical area that will grossly affect the industry in 2019 is the state of the roads leading into Lagos ports.

The approaches to Lagos ports have been bad for years. They only assumed a dangerous dimension in 2017, such that the Vice President had to embark on a discreet chopper ride over the port city of Apapa. The result was that he convoked a stakeholders meeting to find a lasting solution to the problem. The result of the meeting is yet to be seen.

Most certainly, the issues of 2018 will largely remain the issues of 2019. From the access roads to the terminals and jetties, to the channels, on to the creeks of Niger Delta; we may not experience significant changes.

One good sad of 2018 is the coming into life of the Council for the Regulation of Freight Forwarding in Nigeria (CRFFN). It now has a governing council and we hope that in 2019, it will fully get back to life.

It is also our hope that the issues that made the President not to assent the National Transport Commission (NTC) Bill as passed by the National Assembly will be resolved.

Happy New Year!