Stakeholders in the nation’s maritime industry have lamented inadequate Gross Domestic Product (GDP) data representation of the maritime sector.
The stakeholders, while speaking during the Maritime Reporters Association of Nigeria (MARAN) breakfast meeting titled “Trade Facilitation and President Tinubu’s Economic Agenda: Matters Arising”, emphasized the critical yet under-appreciated impact of trade and the international trade ecosystem on Nigeria’s economy.
Dr. Muda Yussuf of the Center for Promotion of Public Enterprises (CPPE), who was the keynote speaker underscored the significant but inadequately captured contribution of the maritime sector to Nigeria’s GDP.
He noted that the trade sector accounted for 16% of Nigeria’s GDP in 2023, amounting to over N27 trillion, driven largely by domestic trade. However, he pointed out that the contribution of international trade and the broader maritime sector is not adequately reflected in the GDP data.
“The maritime sector, or the blue economy, represents far more than water transportation,” Dr. Yusuf explained, adding that “in 2023, water transport contributed a mere N12.6 billion to the GDP, a figure that grossly under-represents the sector’s true value. The maritime sector handles over 95% of our international merchandise trade, with the total trade value reaching N71.9 trillion in 2023.”
Speaking further, Yusuf linked trade facilitation with the administration’s eight-point agenda: food security, poverty eradication, economic growth, job creation, access to capital, inclusion, rule of law, and anti-corruption measures.
“Trade facilitation is integral to achieving the administration’s goals,” Dr. Yusuf stated. “Every pillar of the agenda has an import or export component, making seamless international trade processes vital for the desired outcomes.
“President Tinubu, in his inaugural address, emphasized the need for an improved internal trade process, highlighting trade facilitation as a driver of the renewed hope agenda.”
Yusuf elaborated on the concept of trade facilitation, which aims to minimize impediments and costs in the international trade process. He identified various dimensions of trade costs, including shipping, demurrage, storage fees, interest, insurance, haulage, container costs, import duty, regulatory fees, levies, taxes, and corruption.
“The discussion on trade facilitation should focus on reducing these costs to enhance our economy’s competitiveness,” he emphasized. He then outlined essential pillars and reform imperatives for achieving this goal.
He said a critical component of trade facilitation is the role of the Nigeria Customs Service (NCS). Yusuf acknowledged the significant strides made by the NCS, highlighting the recent launch of the Time Release Study (TRS) to track delays and bottlenecks in the cargo clearance process.
He noted that the initiative which is part of a World Customs Organization framework, aims to streamline cargo clearance and improve efficiency.
Yusuf also praised the Authorized Economic Operators (AEO) program, designed to incentivize and reward compliance in cargo declaration processes.
He said the risk-based approach facilitates speedy release of cargo for compliant operators, thereby boosting trade facilitation and encouraging adherence to regulations.
In conclusion, Dr. Yusuf called for a concerted effort to address the challenges and leverage the opportunities in trade facilitation. “We must focus on the critical pillars of trade facilitation and implement necessary reforms to drive economic transformation. The maritime sector’s potential is vast, and with the right policies and practices, we can unlock significant benefits for our economy.”
The breakfast meeting ended with a call to action for stakeholders to collaborate in advancing trade facilitation initiatives, ensuring Nigeria’s trade processes are efficient, competitive, and conducive to economic growth.
Speaking earlier, Barr. Pius Ukeyima Akutah, Executive Secretary of the Nigerian Shippers’ Council, reiterated the importance of aligning with the Federal Government’s Renewed Hope Agenda.
Ukeyima who was represented by Mrs Ogbonaya Austina highlighted President Tinubu’s eight-point agenda aimed at revamping Nigeria’s economy, including the separation of the Ministry of Transportation into two ministries for effective service delivery and revenue expansion.
“In consonance with government aspirations, the Nigerian Shippers Council continues to promote and advocate the digitalization of Nigerian port processes and operations,” Akutah said. “We are happy to report that over 90% of port processes and operations are now automated, significantly reducing human interactions and their negative attributes.”
He also noted the operational status of inland dry ports in Kano, Katsina, and Kaduna, which are designated as ports of origin and final destination for cargo. Furthermore, he discussed efforts to develop Vehicle Transit Areas (VTAs) and Border Information Centres (BICs) to facilitate trade and ensure cargo security.
Speaking also at the event, Mr. Alban Igwe a member of the Importers Association of Nigeria (IMAN) of the United Nations Advisory Group on Trade and Transport Locations, emphasized the strategic importance of trade facilitation for Nigeria’s economic recovery.
“Trade facilitation refers to the simplification, standardization, and harmonization of procedures and associated information flows required to move goods from seller to buyer and to make payment,” Igwe stated. He outlined the four strategic pillars of trade facilitation: transparency, simplification, harmonization, and standardization.
He underscored the importance of reducing complexities and costs associated with border procedures while maintaining efficient compliance controls. Igwe highlighted six parameters of logistics performance crucial for Nigeria’s trade facilitation policy: customs metric, infrastructure metric, international shipments metric, logistics competence metric, tracking and tracing metric, and timeliness metric.
“The capacity of developing countries to efficiently move goods and connect manufacturers and consumers with international markets is a strong measure of the efficiency of our trade facilitation policy,” Igwe noted. “IMAN remains committed to collaborating with MARAN towards continuously improving Nigeria’s trade competitiveness.”
In his welcome address, Mr. Godfrey Bivbere, President of MARAN, highlighted the significance of the breakfast meeting’s theme and the need for honest appraisals of President Tinubu’s economic agenda in relation to trade facilitation.
“Port inefficiency is a factor in trade facilitation,” Bivbere remarked. “The Lagos Chamber of Commerce and Industry (LCCI) in 2023 reported that the Nigerian maritime sector is in crisis, with the country ranked near the bottom of the World Bank Ease of Doing Business indicators. MARAN found it disturbing that Togo topped the subregion in areas of modernization, efficient port trade cost, and vessels turnaround time.”
Bivbere emphasized the importance of addressing the inefficiencies in Nigeria’s ports, which often lead to cargo being diverted to neighboring ports with more efficient services. He called for a balanced approach to the administration’s policy direction, cautioning against disruptive short-term measures that could destabilize the fiscal and macroeconomic system.
“MARAN advises that the desire to rejig the national revenue system and jumpstart critical fiscal measures should not be compressed into a too-tight short-term template because of its disruptive reactions,” he stated. “A realistic middle-of-the-way approach will be the best, especially considering that our export base is still very weak, making us largely import-dependent.”
