People & Money

Apapa: Where Ease of Doing Business Means Nothing

But getting goods in and out of Nigerian ports continues to be an arduous and brutish experience and the torture is inflicted on businesses over an exhilaratingly long rather than short time. … the cost of moving a 40ft container truck from Tin Can ports to warehouses in Lagos at between $3,750 to $4,000; the cost of transporting the same truck from Shanghai in China to Tin Can Port, Lagos, Nigeria is only $3,000”. 

“Nigeria has initiated some reforms to simplify business interactions with government, seeing the country rise 15 places in the 2020 World Bank Doing Business ranking.  Yet, the improvement in Nigeria’s ranking seems to support the criticism that the World Bank ranking measures everything except the most serious impediments to doing business. (The World Bank Ease of Doing Business was suspended in August 2020 as a result of controversy over the relevance of what it measures and bias in how the measurements are carried out).  In places like Apapa ports where services to business have the greatest impact on productivity and economic growth, Nigeria’s EoDB improvements remain only on paper. Business is assailed and slowed down as usual by innumerable obstacles.”

One of the key pillars of the World Bank’s Ease of Doing Business index is trading across borders, which measures the time and cost associated with importing and exporting goods. It is hence not surprising that Nigeria’s Enabling Business Environment Secretariat (EBES), the Presidential agency tasked with improving the operating environment of Nigerian businesses,  says on its website that one of its key priorities is easing the entry and exit of goods from Nigeria.  But getting goods in and out of Nigerian ports continues to be an arduous and brutish experience and the torture is inflicted on businesses over an exhilaratingly long rather than short time.

In spite of many announcements to reduce hellish congestion around Apapa and Tin Can seaports that jointly handle over 80 percent of the nation’s sea cargoes, little has really changed. A December 2020 Financial Times story estimates the cost of moving a 40ft container truck from Tin Can ports to warehouses in Lagos at between $3,750 to $4,000; the cost of transporting the same truck from Shanghai in China to Tin Can Port, Lagos, Nigeria is only $3,000.

Also Read: https://arbiterz.com/apapa-gridlock-finding-a-lasting-solution-to-a-55-million-per-diem-problem/

Asides the terrible state of roads around the ports which makes trucks queue for several days to access or exit the ports, the multiplicity of government agencies foraging for bribes make the ports very inefficient and one of the most expensive in the world.  Industry sources say the traffic gridlock around the has led to almost 500 percent increase in costs for importers.

Sam Hart, an Abia State Government official, recently shared his experience clearing goods from Tin Can Port in a Twitter Thread. According to him, his goods arrived Tin Can Port on January 21, 2021 but had not been cleared as of February 17, 2021.

Here are the highlights of the Tin Can experience Mr. Hart’s recounted: 

Accessing the Port

The experience of entering and exiting the Lagos ports has to be one of the worst in the world. Just one entrance serves the busiest seaport in Africa’s largest economy. The major road into the Second Gate is under construction and closed to traffic but the construction is quite leisurely. Hart observed that the contractors often “arbitrarily close a lane and disappear for 2 weeks.”

Also Read: https://arbiterz.com/port-operations-costs-nigeria/

Moving a container in or out of Tin Can is a painfully long process – around 10 containers get out in a day while 1,000 trailers are on the queue to get in. Hart revealed that he had  negotiated with three different trailer drivers. The drivers usually ditch agreements for higher offers as they get closer to gaining entry into the ports complex. It takes weeks for flatbed trailers to get to the front of the queue and so the closer the trailer is to the loading point, the higher the bargain. “Like ticket sales at rush hour,” Hart says. “The driver you negotiated with last week can accept double what you offered & ditch your deal.”

Zero-order or Urgency

There seems to be no one in charge, nobody directing trailers to keep them moving. No semblance of order at the entrance and exit, no sense of urgency. “The entire place could be at a standstill for 2 days and you cannot identify why nobody is moving or why nobody seems to be urging people to move,” Hart says. “Everything is languid.”

Even those operating in the environment – both officials responsible for Port operations and business people who use the ports – have accepted that things move slowly.

There have been futile attempts to automate processes at the ports and install e-payment systems. The “human element” and the discretion and loopholes that come with it still reigns supreme.

“Nobody is expecting or demanding faster service,” Hart observed. “I got a few bemused looks when I sought to enquire why certain processes just couldn’t be expedited. Slow is the norm. Accept it.”

Additional costs

New bills pop up “every day,” Hart says, despite having paid all he was billed. Those bills are aside from the cost of flying into Lagos twice in two weeks to ‘follow up’, accommodation and miscellaneous, opportunity cost, mental cost, etc, he says. “It’s the norm so I’m to chin up and pay. It is the way it is I’m told. Accept it.”

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