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Nigeria loses over N5 trillion revenue to corruption, foreigners at ports

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The losses have been attributed to the lack of regulation of the sector by the appropriate agencies

The Federal Government is losing over N5 trillion revenue yearly, based on the inability of the Federal Executive Council (FEC) to find solutions to the highly corrupt business environment at the port.

The Federal Government, it was gathered, loses over $1.95 billion in government revenue and $8.15 billion in private sector revenue annually due to corruption at the nation’s sea ports.

Speaking over the weekend, the Vice-Chairman, Association of Nigerian Licensed Customs Agents (ANLCA), Dr Kayode Farinto said the government needed to beam its searchlight on its agencies at port to fix the economy, invest on infrastructure and create jobs for millions of Nigerians.

The agencies, to be focused on, according to Farinto, include the Nigerian Ports Authority (NPA), the Nigeria Customs Service (NCS), the Nigerian Maritime administration and Safety Agency (NIMASA), the Nigerian Shippers Council (NSC) and the Standard Organisations of Nigeria (SON).

“The Federal Government is losing over N5trillion to corrupt officials and foreigners operating at the port. There is no iota of doubt that money lost based on the high level of corruption at ports weighs very heavily on the economy of the country, forcing the government to borrow several billions of dollars to finance our budget.

“As part of previous efforts to find solutions to the highly corrupt business environment at the port, stakeholders including the Technical Unit on Governance and Anti-Corruption Reform (TUGAR), the United Nations Development Program (UNDP), the Bureau of Public Procurement (BPP), the Independent Corrupt Practices and other Related Offences Commission (ICPC), NPA, NSC, and the Maritime Anti-Corruption Network (MACN) carried out a corruption risk assessment with a particular focus on maritime operations. The risk assessment identified major areas where corruption was a prevalent risk in the business ecosystem, which MACN addressed through collective action efforts in collaboration with the NSC and all government agencies operating in the maritime sector.

‘The collaboration resulted in the introduction of Standard Operating Procedures (SOPs) for port operators and a Grievance Reporting Mechanism (GRM) to uphold the standards set by the SOPs. Following the establishment of the GRM, the Port Service Support Portal (PSSP) was created as a web portal to administer the complaint collection and communication process under the management and coordination of the NSC. The web portal was created as a one stop shop to resolve complaints in the port industry professionally, confidentially, and efficiently and to increase the levels of accountability of port officials in their adherence to the SOPs. “

But Farito said it was disheartening the web portal when evaluated on its own, is totally unable to achieve its goals of reducing corruption and increasing efficiency.

Farinto said if the NCS could generated over N1 trillion between January and June this year despite the 100 per cent physical examination being carried out by the service on over 90 per cent of containers coming to the port which gives room for corruption, that means the Service alone can generate over N3 trillion by the end of the year if the port is automated. If you calculate the amount that goes into private pickets through the other agencies, you will understand the huge amount the government is losing to corrupt officials and foreigners operating at the port,” he said.

Investigation, however, showed that the cash generated by the Customs Service in the first half of the year, represents an increase of N290. 20 billion compared to the N713.54 billion it recorded within the same period in 2020.

The Public Relations Officer of NCS, Joseph Attah said hitting the trillion-naira mark within six months was unprecedented in the service and that it was based on the corruption free initiatives put in place by the Comptroller-General of the Service, Col. Hamed Ali (rtd)and his management team.

But investigation has revealed that the huge revenue was going into private pockets of foreign shipping firms operating at the seaports.

A top Federal Ministry of Transportation (FMoT) official, who asked not to be named, urged the Federal Executive Council (FEC) to focus its attention on Floating Production Storage Offshore Vessels (FPSOVs) and supply boats because of the dwindling oil revenue.

“As part of efforts to boost the economy, there is an urgent need for the government to empower the Nigerian Content Development and Monitoring Board (NCDMB) to implement the Nigerian Oil and Gas Industry Content Development Act 2010 to boost the economy.”There are more than 10,000 ships, oil platforms, rigs and barges operating in the oil gas and port sectors every year that need essential provisions and services to maintain their crew on board the ships,” the official said.

The senior official said the Local Content Act was meant to address issues of this nature, noting that the National Content Monitoring Board (NCMB) was yet to understand the dynamics of local content in ship chandling.

The Federal Government, he said, was losing a huge revenue to the low level in ship chandling business because foreigners are dominating trade.

The senior official said ship chandling needs a lot of funds to meet the demands of the crew.

“For instance, a crew of a ship of 5,000 Gross Registered Tonnage (GRT) would require about $50,000 monthly to buy foods, pharmaceuticals, oil, lubricants and other things for its trip,’’ he said.

Stakeholders in the maritime industry, he said, were worried that the law guiding ship chandling was not effective, adding that Section 24 of the Customs and Excise Management Act (CEMA), which regulates the business, has not been reviewed since 1968 to reflect new trends.

He said the Nigeria Customs Service (NCS) has the power to provide the requisite training to understand the dynamics of how the business is run.

A member of Association of Chandlers and Ship Suppliers of Nigeria (ACSSN), Felix Anthony said that the Federal Government can raise over N2 trillion revenue from over 10,000 vessels carrying out their business at the port.

He said the government should empower the Nigerian Content Development and Monitoring Board (NCDMB) in carrying our its implement core responsibilities.

He berated a situation where foreigners are supplying 90 percent of essential commodities to Floating Production Storage Offshore Vessels (FPSOVs), oil rigs, platforms, supply boats, LNG vessels, and bonga flow stations, saying that if the NCDMB was fully empowered by the government to enforce its Act, the reverse would be the case since only local were permitted to supply provisions to vessels in other countries.

He stressed that the lack of regulation of the sector by the appropriate agencies of the government was partly responsible for the criminal activities on the territorial waters.

He said the country had been losing between $3.5billion and $4billion to foreigners for over 15 years in the sector, stressing that the illegal practice was causing capital flight in the country, noting that the money that was supposed to be in the country was being repatriated by foreigners.

Source: economicconfidential.com

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