By Joshua Yousouph
Findings by Shipping Position Daily have revealed that Maritime corruption in Nigeria’s ports is costing the industry a staggering $162 million annually, significantly inflating transport and logistics expenses by nearly 15 percent.
A recent comprehensive report by the Maritime Anti-Corruption Network (MACN) which was made available to our correspondent, highlighted pervasive corrupt practices, including hefty fines and cash demands of bribes, demurrages and Police checkpoints which have become a substantial financial burden on companies involved in the importation of food and bulk products.
The report indicates that maritime corruption results in an annual reduction in GDP of $204 million, and more than 235,000 fewer FullTime Equivalent (FTE) jobs due to less sales and economic activity
Giving further details, MACN noted that the average corrupt demand per port call between 2019 and 2023 is approximately $20,600. This includes about $17,600 in fines and $3,000 in cash demands, translating to about $0.8 per metric ton (MT) of cargo.
According to the report, despite efforts to reduce settlement times for these demands, the size has gradually increased since an initial drop between 2020 and 2021, adding an unpredictable element to the cost structure for shipping companies.
The MACN noted that the number of corruption incidents reported at Nigerian ports has risen sharply, from just three in 2019 to 38 in 2023. These incidents, reported by 135 shipping companies, highlight the pervasive nature of corruption at ports.
Additionally, corruption at police checkpoints remains a persistent issue, particularly around the Apapa and Tin Can terminals. It noted that trucking companies report encountering 15 to 19 checkpoints, with corrupt demands totaling around N50,000 ($63 USD) for Apapa and N31,000 ($39 USD) for Tin Can.
The report also stated that the time required to resolve corrupt demands often leads to longer demurrage periods and higher safety stock levels. These delays contribute to additional import costs of around $1.6 per MT for demurrage and $1.3 per MT for safety stock, further inflating logistics expenses.
Comparatively, the report noted that Nigerian ports rank among the highest in port time in West Africa. Statistics indicate that Nigeria has the second highest port time for both dry and liquid bulk categories. The average port time for dry bulk carriers from 2020 to 2023 is around 7.3 days, with an average of 3.5 demurrage days.
MACN stressed that the extended port times reflect inefficiencies in terminal operations and other external factors such as weather and equipment breakdowns.
The report read in part: “According to interviews with local trucking companies, there are currently around 15-19 checkpoints to and from the Apapa and Tin Can terminals. While the Apapa checkpoints are assessed to ask for a total of around 50,000 NGN, the Tin Can checkpoints are assessed to ask for around 31,000 NGN. At a 2023 USD/NGN currency exchange rate, this corresponds to an average of 63 USD of corrupt demands for crossing the checkpoints, or an average of around 2.2 USD/MT.
“In 2020-2023, the average demurrage days were around 3.5, indicating that port time depends on factors other than the discharge rate such as the weather, terminal efficiency and equipment breakdown. In addition, MACN members report an average of 2.7 days to resolve corrupt demands with various government agencies involved in the berthing and clearance of a vessel calling Nigeria.
“Port time in Nigeria is among the highest of neighboring West African countries such as Gabon, Cameroon, Benin, Togo, Ghana, and Côte d’Ivoire. According to UNCTAD’s 2021 port call and performance statistics, Nigeria has the second highest port time for dry bulk and the second highest port time for liquid bulk. In addition to being relatively high, Nigeria’s port time appears to be increasing. Combining UNCTAD statistics for 2018-2021 and interviews with shipping companies for 2023, port time for bulk carriers has consistently increased since 2018.
“In 2020-2023, the average port time is estimated to be around 7.3 days for dry bulk and around 4.2 days for liquid bulk. With a laytime of around 3.5-3.8 days, this corresponds to an average of around 3.5 demurrage days for dry bulk and around 0.7 days for liquid bulk”.
