Freight Stabilisation Fee Won’t Add To Port Cost – Shippers’ Council

The Nigerian Shippers’ Council (NSC), has said that its plan to begin collection of per cent Freight Stabilisation Fee (FSF), won’t add to the cost of doing business at the nation’s seaports.

Speaking in an exclusive interview with LEADERSHIP, the executive secretary, NSC, Barr. Pius Ukeyima Akutah, said the cost benefit analysis of the fee has shown that it won’t add to port cost. According to Akutah, the per cent FSF is a statutory provision that would help the Council carry out its mandate saying not carrying out its mandate will create more problems for the sector than the 1% fee.

“The minister had given us a timeframe of two weeks. That has expired, but we are working hard on that. Within the council, we are developing a cost-benefit analysis so that when we talk about this, we should be able to show the cost-benefit, because people might think that it will add to the cost of doing business if we insist on taking the one per cent FSF, but actually, if you look at the cost-benefit analysis, you will know that it doesn’t add to the cost of doing business. Rather, it is a statutory provision and it also helps the Council to carry out its mandate. Not carrying out its mandate will create more problems for the sector than the one per cent fee.”

Akutah, however, said that the port development levy, which was hitherto, its source of funding, be jettisoned because, according to the Oronsaye Report, the council isn’t supposed to be given any subvention. “This is the right time for us to drive the issue of funding for the Shippers’ Council because the Oronsanye report is very clear about what the Shippers’ Council should do.

As much as the other agencies have been merged, and some completely disbanded, the Nigerian Shippers’ Council under that report is supposed to generate its revenue and be self-funding. So, more than anything before, it is now that the Shippers’ Council should be able to raise their revenue profile and begin to raise its funding.”

“The one per cent Freight Stabilisation Fee is statutory funding for the agency, and the agency has not been able to implement that fee. So, now is the best time to implement it. The port development levy, which we have been using now as source of funding for the council, we can leave because, according to the Oronsaye Report, we are not supposed to be given any subvention from that sub-head.”

“So, once we achieve our one per cent freight stabilisation fee, which is statutory, we are not going to ask for the port development levy anymore. We will just confine ourselves to what the report said we should do, and then we begin to look for other sources of funding, which I believe we have certain responsibilities to raise money, not only to fund the agency but the national GDP as well and contribute meaningfully to the national GDP.”

The Shippers’ Council boss, also stated that the council is at the forefront of championing the Inland Container Dry Port because it brings shipping services to the hinterlands and closer to people who need it.

“The Inland Dry Ports is also one of the policies of the government to bring about port efficiency. We are under the African Continental Free Trade Agreement and there are opportunities for Nigerians in that agreement, and if we open up our markets for the whole of Africa, then we should be willing to also export from Nigeria.

“So, the IDP project basically targets bringing shipping services to the hinterlands, closer to people who need it. Rather than bringing your goods to the seaports for export, you can export them right from where your farms are, where you are producing whatever it is.

“We also decongest the ports by that singular action and at the same time promote international trading activities in the hinterland. So, it is important for us to develop that policy and continue to move in to possibly flood our hinterlands with dry ports, but they must be actively engaged in business; people must use them, it is not just to construct.

“But then, the Nigerian Shippers’ Council is not bringing money from government coffers to build IDPs, they are public private partnership business enterprises, so people, sometimes state governors, come to us and say they want to develop IDPs. We have to see the locations and how viable those projects are for import/export business.

“For instance, in Enugu State, we have a vehicle transit area to be located at Obolafor and we are insisting that we should invest in a vehicle transit area in that location because it is already a transport hub where vehicles (transporters) travelling between the north and south break to rest and refresh before they move.

“So, it is better for us to establish a vehicle transit area there than an IDP when Onitsha (inland port) is just down the line, where trade and business activities are already going on. If we have an IDP within that radius, it might not serve the purpose as much as possible. So, we consider all these, we are not just engaging in construction of IDPs but we want them to be effective, efficient and contribute to international trade within our country,” he stated.