Shipping agencies urge tax reduction to halt cargo diversion
BY TEMITOPE ADEBAYO
The Shipping Agencies, Clearing and Forwarding Employers Association (SACFEA) has called on the federal government to reduce port charges and operating costs to prevent the continued diversion of cargo from Nigeria’s seaports to neighbouring countries.
SACFEA Chairman, Boma Alabi, warned that Nigeria’s high port charges have made its seaports uncompetitive, pushing shippers to ports in Cotonou, Lome, and Ghana, where costs are significantly lower. She cited the example of Tema Port in Ghana, which handles 1.9 million Twenty-foot Equivalent Units (TEUs) annually, compared to Nigeria’s 1.2 million TEUs, despite Nigeria’s larger economy and trade volume.
Alabi highlighted that vessel berthing charges at Tema Port are approximately $15,000, while Nigerian ports charge as much as $150,000—now nearing $200,000 following a recent 15 per cent increase in port and marine fees by the Nigerian Ports Authority (NPA).
She also noted that the cost of clearing a 20-foot container in Nigeria had risen from N55,000 to N145,000, while a 40-foot container now costs N290,000, up from N100,000.
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Comparing these figures to other regional ports, Alabi stated that clearing a 40-foot container costs $26,000 in Lome, $27,000 in Cotonou, and $21,000 in Shanghai—rates significantly lower than in Nigeria. She argued that the current cost structure discourages investment, forcing importers and exporters to use alternative ports and smuggle goods back into Nigeria, further harming the economy.
“We were not informed before the government implemented these charges. Reducing port fees will increase cargo throughput, generate more revenue, and create jobs for young Nigerians,” Alabi said. She also criticised excessive indirect taxation, decaying port infrastructure, long truck queues, poor road conditions, and multiple government agencies imposing levies that ultimately inflate transportation costs.
She further warned that Nigeria’s Blue Economy Project risks failure if the government continues to adopt policies that discourage business. “The 15 per cent increase in shipping charges has effectively tripled our costs. Like the suspended 4 per cent customs charge, we urge the government to reconsider this hike,” she pleaded.
Echoing her concerns, CMA/CGM Nigeria Deputy Managing Director, Ramesh Saraf, pointed out that despite international investments in the Lekki Free Trade Zone, port infrastructure remains underutilised. “Lekki Deep Sea Port began operations in April 2023 but is running at less than half capacity. With the new 15 per cent port fee increase, transshipment costs are now three times higher than at competing ports,” he said.
Saraf lamented that Nigerian importers and exporters are opting for Ghanaian and Beninese ports due to Nigeria’s excessive charges. “We must not destroy the cargo business under the guise of increasing revenue,” he warned.
However, the Nigerian Ports Authority (NPA) dismissed SACFEA’s claims, arguing that several factors determine port costs, including vessel gross tonnage, cargo origin, terminal type, and overall vessel length.
A source within the NPA, speaking anonymously, refuted the association’s cost calculations, questioning how a 15 per cent fee increase could result in a 263 per cent rise in container costs. “A 20-foot container that previously cost N55,000 should now cost about N63,240, not N145,000. Similarly, a 40-foot container should be N115,000, not N209,000. These figures are exaggerated,” the source asserted.
