Finance Ministry Bows To Stakeholders’ Pressure, Halts Palletisation

Finance Ministry Bows To Stakeholders’ Pressure, Halts Palletisation

The federal government has bowed to the pressure of shippers who warned of cargo diversion if the cargo palletisation policy is implemented.

Recall that LEADERSHIP had reported that president, Shippers Association Lagos State (SALS), Rev. Jonathan Nicol , said palletisation would increase cost of importing raw materials into the country.

He said instead of shippers to increase the cost, they would rather divert to a more attractive and cost efficient seaports in neighbouring countries.

Nicol said, “A lot of cargo will go to seaport of Cotonou because of the palletisation policy.

Having very difficult import adjustment policy in Nigeria is what we don’t understand how and why at this time.

But the federal government on Tuesday announced that the implementation of the controversial palletisation policy, which was to have commenced on January 1, 2018 has been halted.

Executive secretary of Nigerian Shippers’ Council, Mr Hassan Bello,  while delivering a paper on Ease of Doing Business and Strengthening Investors’ Confidence  at the second edition of Multimodal West Africa Conference said that the palletisation policy has been suspended.

Responding to a question from one of the participants on palletisation, Bello confirmed that the suspension was spearheaded by the Nigerian Shippers’ Council because of the opposition it generated after the minister of finance, Mrs Kemi Adeosun , announced the policy last year.

The Shippers’ Council boss stated that the suspension was to allow room for more discussions on the policy, even as he confirmed that the Central Bank of Nigeria(CBN) has been directed  to stop its implementation.

He however hinted that the suspension was a temporary one, saying that nothing has been concluded yet. According to him, palletisation has its own disadvantages, which could not be overlooked and which its opponents have vehemently brought to the attention of government.

The Shippers’ Council boss also argued that to ensure ease of doing business in the nation’s seaports, they must be equipped with scanning machines. As Media Firm Host Town Hall Meeting On Policy Ships & Ports, a maritime media firm  has concluded plans to hold a one-day Town Hall Meeting on the federal government’s policy on the palletization of imported cargoes in the country.

Coordinator of the event, Mrs. Shulammite Olowofoyeku said the event has been scheduled to hold in Lagos on February 6, 2017.

The implementation of the cargo palletization policy, which officially commenced on January 1, 2018, has been received with mixed reactions since it was announced by the federal government.

Some stakeholders argue that the new policy would add to the cost of shipment into Nigeria as well as delay cargo clearance at the ports. The federal government, on the other hand, is of the view that the policy will allow for secured shipment and better inspection of imported consignments at the nation’s seaport.

Olowofoyeku said, “It is against the backdrop of the various arguments on the merits and demerits of the policy that the Town Hall Meeting is being spearheaded by Ships & Ports.

“We intend to examine the issue from diverse perspectives and benchmark it against the importation polices in developed countries and international best practice.

“The idea is to proffer solution that works in the best interest of Nigeria, Nigerians and the trading community.”

Olowofoyeku said the minister of finance, Mrs. Kemi Adeosun,  would open the meeting with a keynote address.

The gathering is expected to draw participants from critical stakeholders along the importation value chain. These include government Ministries, Departments and Agencies agencies such as the Ministry of Trade and Investment, Nigeria Customs Service, Nigerian Ports Authority, Nigeria Maritime Administration and Safety Agency (NIMASA) and the Nigerian Shippers’ Council.

“Also billed for the town hall meeting are representatives of the organised private sector including manufacturers, traders, shipping companies, terminal operators, shipping agencies, cargo agents, freight forwarders, customs brokers, marine insurers and haulage operators.”

Nigerian Shipowners Jubilate As NIMASA, NNPC Set To Change Trade Terms  Indigenous Shipowners have commended the Nigerian Maritime Administration and Safety Agency (NIMASA) over its decision of  getting the desired change in trade terms from Free On Board (FOB) to Cost Insurance and Freight (CIF).

The trade terms if reviewed would enable indigenous shipowners to lift Nigeria crude and ultimately boost indigenous capacity.

The CIF trade term would be more beneficial to the country than the present FOB on which the crude lifting is currently based upon. Speaking on the initiative, the president of African Shipowners Association (ASA), Temisan Omatseye, pointed out that there was a lot of benefit in the CIF trade term. Omatseye a former DG of NIMASA stated further that that the new trade term would eliminate crude theft, create employment and ultimately compliment the diversification drive of the federal government.

Also speaking, the president of the Ship Owners Association of Nigeria (SOAN) and managing director of Starz Marine Group, Engineer Greg Ogbeifun,  observed that what wàs needed to make the great CIF initiative to grow the Nigerian shipping industry and the economy is the needed government support, which is coming at the right time, when the country wants it most to diversify the economy.

It would be recalled that Shipowners and other stakeholders in the maritime sector are on the verge of getting the desired change in trade terms from Free On Board (FOB) to Cost Insurance and Freight (CIF) which would enable them to begin to lift Nigeria crude and ultimately boost indigenous capacity.

This new encouragement was a fall out from the stakeholders’ engagement on changing Nigeria’s crude oil affreightment trade term from FOI to CIF which was organised by Nigerian National Petroleum Corporation (NNPC) and the Nigerian Maritime Administration and Safety (NIMASA) held on Tuesday at the NNPC towers in Abuja.

Director -general of NIMASA, Dr. Dakuku Peterside, pointed out that the changing landscape of Nigeria’s maritime sector viz-a-viz its security architecture, capacity and other determinants has necessitated the change now than ever before.

Dakuku stated further that the CIF if implemented will “encourage indigenous fleet expansion, lead to massive job creation for qualified Nigerian Seafarers, create opportunities for mandatory sea time experience for Nigerian cadets and build expertise and competence in international shipping trade.”

According to him, Nigeria is one of the major exporters of oil and gas resource in the world, and she averages an output of 1.92 million barrels of crude oil per day so this volume generates huge freight for carriers. Regrettably, Indigenous shipping operators have insignificant share of the freight earned from the carriage of Nigeria’s crude compared to foreign counterparts.”

Dakuku also stated that OPEC nations such as Iran, Indonesia, Algeria, Kuwait, Angola, Venezuela, UAE and Libya allow indigenous operators to participate actively in shipment of the crude oil, stating that with the right policies in place Nigeria can build its own capacity and one of this is the change of terms of trade for Nigeria’s benefit.

Read More at: https://leadership.ng/2018/01/26/finance-ministry-bows-stakeholders-pressure-halts-palletisation-policy/