How NPA Is Minimizing Impact of Covid-19 on Nigerian Economy

As countries around the world grapple with the economic impact of Covid-19 pandemic, measures put in place by the Managing Director of the Nigerian Ports Authority (NPA), Hadiza Bala-Usman, such as diversion of vessels whose crew members are showing symptoms of the virus from Mauritius (considered gateway to Africa), suspension of all applicable terminal storage fees on consignments, agreement with the Nigeria Customs Service to move overtime cargo to federal government’s warehouse at Ikorodu, will help minimize the impact of the pandemic on Nigeria’s economy, writes Eromosele Abiodun

Without any equivocation, Nigeria’s maritime sector, especially the seaports can be said to be the lifeblood of the country. The following numbers will interest you if you have any doubts. In 2019, Nigeria’s imports from China alone was N4.3trillion, 25 percent of total imports, while imported manufactured goods took up about 70 percent of total imports. This is likely to be affected now as China and the rest of the world have resorted to closing down factories, imposing travel bans and even total country lock-downs, as they struggle to contain the spread of the virus.

This, experts say, could put more pressure on inflation numbers going forward as the cost of local production goes up. Nigeria’s inflation rate was 12.2 percent year-on-year as of February 2020.

However, Nigeria is not is this dilemma alone. Nigeria, like all the nations of the world, is navigating uncertain times. However, for Nigeria as an oil-dependent economy, this is a twin shock. Nigeria’s vulnerabilities to the impact of external shocks can be adduced to heavy dependency on global economies for fiscal revenues, foreign exchange inflows, fiscal deficit funding and capital flows required to sustain the nation’s economic activities.

The twin shock, COVID-19 pandemic global plus domestic shock and the oil price shock, are expected to impact the economy through three channels: supply, demand and financial. The rapid outbreak of COVID-19 presents an alarming health crisis never seen before in the 21st century with its attendant toll on humanity and economies.

For 2020 alone, the United Nations Trade and Development Agency (UNCTAD) put the cost of the outbreak at about $2 trillion.

Similarly, Nigeria’s latest Excess Crude Account balance, according to a statement from the Office of Accountant General of the Federation, was put at $71.81 million, while movement in reserves showed that the country’s reserves stood at $35.94 billion, down by $2.59 billion from $38.53 billion in which it opened the year.

Finding Solution

While the world was struggling to contain the spread of the virus and consequently shutting down ports, Nigeria took the bold decision to keep its seaports open for business. The government knew the importance of seaports to its economy as an import-dependent country. However, opening the ports posed a huge threat. As a way out, the Managing Director of the Nigerian Ports Authority (NPA), Hadiza Bala-Usman, came up with what has now been described by experts as a brilliant idea in the fight against Covid-19. On March 9, 2020, at a sensitization programme for terminal operators, shipping companies and dockworkers at the Lagos ports complex in Apapa, Bala-Usman announced that the NPA had found a solution that will keep the port safe and running.

She revealed that in the wake of the pandemic, the NPA placed vessels coming into the country from Asia on red alert, due to the high rate of infection from the region. As a further measure, she said the NPA agreed with shipping companies to divert vessels whose crew members are showing symptoms of the virus from Mauritius.

Similarly, personnel from the Port Health were on the ground to avoid the spread of the virus through the ports and the NPA boss rallied for the support of all stakeholders to forestall the spread of the virus at the nation’s seaport. According to her, the authority has commenced a plan to set up isolation centres at the ports to curb the spread of the coronavirus from the seaport.

“We are aware that the virus is spreading round the world in a very rapid form and of course there is need for us to curtail it, and we have been informed that there is no cure to this disease and the best thing for us to do is to have a precautionary preventive measure for us to ensure that it does not spread, so on the basis of this we have to call the terminal operators and of course the stakeholders for us to rub minds together and see how best we can do to curtail this menace.

“Of course, we have done a lot of things on the part of NPA to ensure we prevent the spread of this disease, as we know the port is one of the entry points into the country, that is why we deem it fit for us to discuss what we have done and of course what is expected of the terminal operators for them to be able to curtail this menace.

“We have had collaborative efforts for us to fight this disease, we have seen what they have done, and the necessary medical materials are in each of the terminals. We have been told they have sanitizers as a preventive measure for dock workers who access the vessels and there are things they said we should do which I believe the management will be able to take care of,” said Bala-Usman.

NPA Suspends Fees

Apart from the diversion of vessels from Asia, the NPA in line with global best practice directed all terminal operators to suspend all applicable terminal storage fees on consignments, also known as demurrage for an initial period of 21 days. The NPA also stated that the gesture was in recognition of the pressure that COVID-19 pandemic imposes on businesses and the responsibility imposed on the authority to relieve this burden on its customers.

The NPA in a statement issued by its General Manager, Corporate and Strategic Communications, Adams Jatto, added that the measure was part of efforts to attain the objective of the federal government’s ease of doing business.

“The authority recognizes the financial implications of these policies on the terminal operators and will consider a shift in our operational charges to ameliorate the situation of stakeholders,” stated the NPA.

That was not all, a few days after the suspension of fee, the NPA announced the donation of Agura Hotels in Abuja as an isolation centre after consultation with other shareholders.

“The NPA as majority shareholder of the Agura Hotels, Abuja, in consultation with other shareholders, have agreed to donate the 130-bed fully furnished hotel as isolation centre for COVID-19 in Abuja.

“This is a social responsibility initiative aimed at supporting efforts of the federal government to contain the spread of the virus in Nigeria. The authority encourages all Nigerians to follow all advisories issued by the National Centre for Disease Control and be confident that Nigeria will overcome.”

In a related development, the NPA announced that import and export operations will continue at the ports in Lagos despite a curfew declared on the state by President Muhammadu Buhari.

It explained, “Consequent to the directive of President Muhammadu Buhari that Lagos seaports, (Apapa and Tin Can Island ports) should remain open in the duration of the two-week lockdown of Lagos State, the Nigerian Ports Authority hereby assures all stakeholders that arrangements have been made for operations at the ports to continue without hindrance.

“Safety procedures, which will guarantee the wellbeing and security of stakeholders and staff have been put in place and all are advised to kindly comply with directives of port officials.

“All other government agencies responsible for smooth operations in the ports are enjoined to be at their respective duty posts to discharge their functions in line with the presidential directive of maintaining operational functions at the Lagos ports. The management of the Nigerian Ports Authority assures all stakeholders of its commitment to the facilitation of trade in Nigeria.”

Engaging State Governors

Before the Covid-19 pandemic, Nigeria was battling with congestion at the Apapa port often resulting in gridlock on Apapa road. Therefore, in a bid to prevent further congestion at the Lagos ports following the blockade mounted by several state governors around state boundaries to restrict movement and halt the spread of coronavirus, the NPA decided to engage the governors through the presidential task force on the coronavirus pandemic to ensure containers are allowed to move freely.

Bala-Usman assured journalists during her inspection of terminals at the Apapa and Tin Can Island ports that she had discussed the matter with the head of the task force and Secretary to the Government of the Federation (SFG), Boss Mustapha.

“I am also going to raise the issue after my inspection with the respective state governors and also ensure that this is raised at the highest level through the presidential taskforce. I think that as responsible leaders where you understand that indeed there is a certain economic aspect of your states that are tied to linkages in the ports. We should be responsible and allow these corridors to function efficiently while securing the lives of your citizens, providing the necessary protocol all Nigerians against any threat but recognizing that these corridors that are economic corridors around the port operations need to be sustained in a secured environment,” she pointed out.

Also, as a way of addressing the port’s congestion, she disclosed that the Nigeria Customs Service (NCS) agreed to fast-track the clearance of over 1,500 overtime containers, while the agency had already inspected 400 and were being moved to the federal government’s overtime cargo warehouse at Ikorodu

The NPA stated further, “We have discussed with the Nigerian Customs Service (NCS) and they have given approval for 400 containers to be cleared and moved out of the port to the federal government overtime cargo warehouse at Ikorodu. That is the same across the board for all terminals. Why we are calling on all consignees to come out and collect their cargo, they should also be mindful that some of these cargoes that are considered overtime are been moved to Ikorodu where they will be auctioned in line with the guidelines stipulated by the NCS.

“The issue of overtime cargo, the issue of improvement and efficiency and cargo handling equipment is across the board. That is why we have deployed clearly within our revised concession agreement metric where for every time terminals don’t improve on their equipment there will be sanctions. I think sanctioning and penalties are what work cross the world because people must be sectioned if they are not doing their work.”

Nigerian Ports Remain Open

She, however, chided some organizations linked to the International Maritime Organisation (IMO) for listing Nigeria among the 70 countries that have shut down their ports due to the Covid-19 pandemic.

“I am curious,” said the NPA boss, “as to what agency will list Nigeria among countries that have shut their ports. I think entities should be held accountable to wrong listing and false information because the shipping companies are very much aware that the Lagos port is operational, vessels berthed yesterday and they have been berthing every other day.”

Meanwhile, the NPA has directed terminal operators to give rent-free days for a period of 14 days to enable Nigerians to clear their cargoes during the lockdown.

“We have notified the terminal operators to give rent-free days for a period of 14 days, this was even before the lockdown happened. We have engaged with them on the level of cushion we are going to provide for them. The federal government will look at the amount that they forfeited by giving importers rent-free and the government will reimburse them through credit for the amount that they gave up for letting consignees keep their cargoes in their location. However, we will not encourage this going forward so as not to give room for congestion,” Bala-Usman clarified.

On why the NPA embarked on the inspection, she said, “This inspection will enable us to identify special issues that we need to escalate to the presidential task force to make them understand that while the port environment is functional, there is also the need for us to connect to the larger eco-space because the port is not in isolation. The port also works with other entities that are not domiciled in the port.

“They have told us what their challenges are in terms of operations and we have addressed them,” stated the NPA boss. “What is important is that there is a clear protocol as it relates to vessels that are calling in the port in tandem with the port health. The port’s corridor is what is key and we are working to ensure that every other stakeholder is aware that the port is functional and any stakeholder that qualifies and gets the necessary pass to enable him to come into the port and do his activities.”