Port Concessionaires Seek Tariff Hike Amid Rising Operational Costs

• The NPA recently announced a 15% increase in charges across ports to enhance service quality and infrastructure, while Customs has sought to implement a 4% Free On Board (FOB) levy to finance its operations in accordance with the Nigeria Customs Service Act (NCSA) 2023.
• Jayeola Ogamode, Managing Director of Skeptre Consult Limited and a cargo consolidator, explained that manufacturers will likely pass on the additional costs to end-users.

In response to increasing operational costs and efforts to align with service providers across various economic sectors, shipping agencies and port concessionaires are seeking to raise tariffs on annual imports and exports valued at N197 trillion.

Eko Hot Blog reports that this move comes in the wake of proposed tariff increases by the Nigerian Ports Authority (NPA) and a new levy by the Nigeria Customs Service (NCS).

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Industry stakeholders cited numerous challenges, including rising operational costs, unstable foreign exchange rates, and high energy costs, as the primary drivers behind their push for higher tariffs.

The NPA recently announced a 15% increase in charges across ports to enhance service quality and infrastructure, while Customs has sought to implement a 4% Free On Board (FOB) levy to finance its operations in accordance with the Nigeria Customs Service Act (NCSA) 2023.

As a result of these proposed changes, consumers may face rising prices for goods and services.

Jayeola Ogamode, Managing Director of Skeptre Consult Limited and a cargo consolidator, explained that manufacturers will likely pass on the additional costs to end-users.

This comes at a time when the NCS processed 15.35 billion kilogrammes of imported goods, valued at N60.29 trillion, at ports in 2024.

He advised government agencies to cut operational costs across board, block leakages at the ports and stop arbitrary charges by shipping lines. Ogamode stressed: “Nigeria spends about $9.2 billion annually on freight charges paid to foreign shipping companies.

The Federal Government should be thinking of how this money could be earned by Nigerian ship owners directly instead of imposing tariffs.

These payments constitute a significant outflow of foreign exchange, contributing to the weakening of the naira.”

Also, the President, Association of Chandlers and Ship Suppliers of Nigeria (ACSSN), Mr. Vickson Aghanenu, said that it would be more difficult for chandlers to supply essential provisions and services needed to shipping line because of high costs, tariffs from NPA, Customs and other government agencies, saying that the country was already losing between $300 million and $360 million to Ghana and Republic of Benin, where the liners were sourcing food supplies and spare parts for their crew and ships due to high cost of doing business in the ports.

He urged government to reduce their tariffs and other charges, saying that this was the essence of good governance. Meanwhile, importers have been paying arbitrary tariffs such as delay and diversion surcharges, bunker adjustment, currency adjustment, war risk, extra risk insurance surcharge, freight rates surcharge and port operations recovery surcharge.

Others are Basic Service Rate Additional (BSRA), Bunker Ad – justment Factor (BAF), Currency Adjustment Factor (CAF), Terminal Handling Charge (THC), Full Container Load shipments, Heavy Weight Charge (HWC), Overweight Surcharge (OWS) Port Congestion Surcharge, Peak Season Surcharge (PSS) and Winter Surcharge (WS) among others.

Recall that the Comptroller General of Customs, Adewale Adeniyi noted that the country’s export trade performance was impressive, with the total CIF value rising significantly to N136.65 trillion in 2024 from N42.77 trillion in 2023, marking a 219.5 per cent increase.

While the number of export transactions remained relatively stable at 38,199 compared to 38,294 in 2023 witnessed a substantial increase in export volume, processing 12.35 billion kilogrammes in 2024 compared to 3.70 billion kilogrammes in 2023.

He explained: “This 234 per cent increase in export mass, coupled with the higher value, indicates a robust growth of export trade and suggests increasing competitiveness of Nigerian products in the international market.

“The total trade value handled by the service in 2024 amounted to N196.94 trillion, compared to N70.50 trillion in 2023, representing a 179.3 per cent increase.

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This substantial growth in trade value, achieved with fewer but more valuable transactions, is evident of the increasing sophistication of Nigeria’s international trade and the effectiveness of our trade facilitation measures.