When Donald Trump threatened the world, during his campaign for the US top job , especially China, Candada and Mexico that they should prepare for a barrage of tariff increases once he wins the election, only a few took him seriously. Even though our Nigerian born headmistress of the World Trade Organization, Dr Ngozi Okonji-Iweala, promptly cautioned against the threats which she warned might be catastrophic, she underestimated the swiftness with which Donald Trump struck once he won the November elections.
A tariff is a tax on imported goods and services . Tariffs are typically a percentage of the value of the goods. The purpose of tariffs is to raise revenue for government and to protect domestic industries from foreign competition. About a fortnight ago, the Nigerian Ports Authority, NPA, joined the global tariff “war” when it announced an upward review of its rates and charges by 15 per cent. It was the first time the NPA would do so in 32 years. Expectedly, the action has raised mixed reactions from stakeholders and the business community. While the organised private sector described the move as the highest level of insensitivity given the rise in inflation which according to National Bureau of Statistics is around 37 per cent, NPA officials insist the increases have been long over due and should be taken in good fate. Said Mr Sylvester Egede, an Assistant General Manager at Nigerian Ports: ” About 32 years ago, the least paid worker in NPA earned about N1000, but today the same worker earns at least N250,000 . This is certainly an indication that the cost of our overhead has risen astronomically”, he said. Justifying the increases during a stakeholders’ engagement in Lagos recently, a former General Manager at Nigerian Ports Authority, Mr Joshua Effanga ,said in 1993 when NPA last increased its tariffs, the naira exchanged for 4.7 usd but that as at today, 1usd exchanges for N1,550. Said Assanga: ” The Port concession process of 2006 provided a mechanism of annual increases of rates that were to be charged by Terminal Operators which were on the changes on the consumer price index of the USD. Stevedoring contractors and Terminal Operators also have an arrangement for the periodic review of their rates” he said. Mr Assanga also listed other critical parties in the ports ecosystem like the Nigeria Customs Service, the Nigerian Maritime Administration and Safety Agency, Shipping Companies, Freight Forwarders, Ship Chandeliers, Stevedoring Companies, Truckers ,etc who have severally reviewed their charges over the years while the NPA tariffs have been stagnant for 32 years. The former NPA Chief also drew a comparison from the global Freight rates on imports which he said had increased between 28per cent and 96 per cent from 2018 to 2022. Conversely, while other port Operators were smiling to their banks and benefiting from the over 32 years of non increase in tariffs by the NPA, the Agency was reeling from the burden of creating an enabling environment for an upgrade of Ports Infrastructure, dredging and channel management, which are all capital intensive ,without a corresponding increase in tariifs . “With not a single koko subvention from government for over 32 years, it is miracle that the Nigerian Ports Authority , have not gone bankrupt “, said Prince Olayiwola Shittu, a former President of the Association of Nigerian Licensed Customs AGENTS, and a former Staff of the Nigerian Ports Authority.
For the NPA under the leadership of Dr Abubakar Dantsoho, the ports functions and activities are not just limited to Infrastructure, operational cost and welfare of workers, it includes complying with International standards, protocols and conventions for environmental care and Safety , training and retraining of Staff, a living wage and juicy welfare program for all staff. Currently, the Management of the NPA requires about $700m usd to accomplish the urgent upgrade of its infrastructures in the various ports. And there can be no better time for this tariff review than now if the NPA must achieve its long desire to be the hub in the West and Central African sub region.