West Africa’s Labyrinth

Local Agents Key to Navigating Nigerian Maze

By David Whitehouse

Nigeria’s ports present a range of unusual challenges for heavy-lift and breakbulk cargoes.

Many years ago, Steve Cameron, managing director at Cameron Maritime Resources in London, arrived at Warri port in Nigeria with a heavy-lift cargo. But despite the assurances of the port authority, the promised crane had many missing parts and was unfit for use.

By chance, the shipmaster spotted a Spanish ship that was induced to allow them to use its heavy-lift derrick. Cameron learned from that experience that it’s essential to have a good local shipping agent to do pre-project planning.

“There is a big difference between email promises and what is delivered,” said Cameron, who has 20 years of project cargo experience in West Africa. “In short it comes down to being prepared.”

Even at the stage of quoting for a project cargo, you need to have a relationship with a local agent, Cameron added. Investing in a local office is one solution. But for one-off projects, he said, there’s no choice but to rely on third-party agents, who must be able to protect against equipment parts being removed. They must also be able to prepare a comprehensive report on the state of the cargo at the moment of discharge. The quality of local agents in Nigeria has “improved significantly,” Cameron said, but it’s still essential to take up references from other users.

Unrivalled Oil Presence

Nigeria is Africa’s largest economy and the continent’s biggest oil producer, making its market impossible to ignore. The World Bank’s Doing Business report, an indicator for measuring the effectiveness of a country’s ports, ranked Nigeria at 182 out of 190 countries in 2019.

A paper from the Nigerian Ports Authority in July found that a combination of poor external infrastructure and security challenges in the waterways are imposing costs on charterers which are passed on in the form of higher insurance premiums.

Les Rice is an ex-mariner turned consultant to protection and indemnity clubs and cargo insurers. He investigates insurance claims that have been made against carriers and in major cases serves as an expert court witness. Rice would expect to pay US$2,000 to US$2,500 per day for a competent surveyor to remain on board throughout the cargo operation. Hiring a professional may be expensive, but it beats employing an amateur. “A good agent can make this run like clockwork,” Rice said.

Claiming from insurers is “systematic” in some Nigerian trades, Rice added. “There is a longstanding and well-established claims industry operating in Nigerian ports, involving a number of local surveyors, tally clerks and insurance company correspondents. Fraudulent or inflated claims by cargo receivers are prosecuted by local lawyers.”

Rice has made some 300 trips to West Africa over the last 35 years. He said that he has never known a bagged cargo that has not been the subject of an insurance claim. These are often rice cargoes coming from Asia, which are invariably claimed to be short of the promised amount when they arrive in Nigeria. The Lagos Chamber of Commerce and Industry, or LCCI, has called for stiffer consequences for wrongful or underdeclaration of imported goods, including naming and shaming of serial violators.

Eastern Port Neglect

A succession of post-independence governments in Nigeria favored the ports in Lagos at the expense of those in the east of the country. Decades of neglect created a vicious circle as the abandoned ports silted and became too shallow.

The eastern ports have berth depths of six to 11 meters, compared with nine to 13.5 meters available in Lagos. The LCCI said there is concern over the safety and cost implications of wrecked ships and abandoned vessels littering Nigeria’s waters. It estimates that there are about 200 derelict ships there.

The government is trying to encourage ships to use the eastern ports rather than those in Lagos by cutting tariffs for some users. But the perception is that the eastern ports are more dangerous in terms of piracy than those in Lagos. The ports of Apapa and Tin Can in Lagos still handle about 70 percent of all Nigerian imports.

Some dredging has been done at the eastern ports in a bid to ease the congestion. Nigeria is also building a new deep-sea port in the Lekki Free Trade Zone in Lagos through a public-private partnership, and is considering two additional facilities to help ease congestion. The country’s ports authority says that a port master plan to cover the maritime industrial environment is needed.

According to stakeholders convened by the Nigerian Chamber of Shipping in March, a “comprehensive shipping policy derivable from an equally comprehensive transport policy” is needed to improve port infrastructure. As far as possible, ports should be automated to reduce corruption and congestion, the stakeholders added.

Pirates ‘Ruthless and Desperate’

Rice sees piracy as a principal risk. He considers Nigerian pirates to be among the most violent in the world. According to the International Maritime Bureau, or IMB, out of 75 seafarers kidnapped so far this year, 62 were captured in the Gulf of Guinea, off the coasts of Nigeria, Guinea, Togo, Benin and Cameroon. Of the nine vessels fired upon worldwide, eight were off the coast of Nigeria. The IMB said there are some signs of improvement, reflecting the Nigerian navy’s increased efforts to actively respond with patrol boats.

Rice said that Nigerian piracy is much more frequent than reported. The pirates are extremely ruthless and desperate, coming from Lagos where, he said, there are levels of poverty – and concentrations of wealth – without parallel in Africa. Multipurpose and heavy-lift ship operators should consider having armed guards and hardening the vessels, for example with razor wire, to make it more difficult to board, he said. Rice also advised the use of a navy patrol escort to the Safe Anchorage Area, or SAA, at Lagos port or arranging naval escort from the SAA to ports other than Lagos, such as Port Harcourt or Bonny River. There needs to be 24-hour security with regular deck patrols while the vessel is alongside the discharge berth, he added.

That task is made more complex by the fact that Nigerian ports are too shallow for large vessels carrying heavy equipment. Lagos ports are restricted in size because of warehouses and residential homes built around them.

Femi Ademola is a consultant who was commissioned by the LCCI to co-write a report on Nigeria’s ports in 2018. He said that large vessels are usually anchored in the middle of the sea, while smaller vessels are used to transport the cargoes to the port terminals. Space constraints at the terminals can then lead to longer-than-usual waiting times before cargoes are cleared. Cost overruns often result, he said, and advised sending required documentation well ahead of berthing in Nigeria to shorten waiting times.

Slow Improvement

In his 2018 report, Maritime Ports Reform in Nigeria, Ademola pointed to the need to streamline the number of security agencies involved in breakbulk and heavy-lift port operations, with the number of agencies involved in the cargo clearance processes currently between six and 10. About 10 percent of cargoes are cleared within the official timeframe of 48 hours. Most take between five to 14 days to clear, with some needing 20 days or more. Deliberate official delays account for about 65 percent of import clearance times, Ademola’s report found.
According to the Maritime Anti-Corruption Network and the United Nations Development Program, it can take more than 140 signatures to get a vessel or cargo cleared by the local authorities.

On top of that is the risk of industrial action. In July, Nigeria’s ports ground to a halt as the Maritime Workers Union of Nigeria held a three-day strike claiming that stevedores employed by international oil companies hadn’t been paid.

That said, the country’s ports are slowly improving, Rice said, with insurance claims being incrementally reduced. Nigeria’s ports are slowly becoming easier to use than other ports in West Africa, which Rice said are moving in the opposite direction.

An independent pre-discharge survey remains essential, he said, and is much easier for project cargo than for breakbulk, with the cargo accessibility being the key difference. For project cargo, it’s usually possible to verify that lashings are in place, that the cargo is complete and has not moved in transit, and to take photos. That’s much harder in the case of bagged cargo. Breakbulk is the “problem area” for insurers in Nigeria, Rice said.

Gridlock Shutters Moves

For project cargoes, problems can often start at the gate. Cameron described the congestion on the roads around Nigeria’s ports as “absolutely shocking.” Trips from ports that should take 30 to 45 minutes routinely take two to three hours, he said. Part of the problem is caused by container trucks which, Cameron said, cut bridge capacity by about one-third. Add in tanker trucks and you have a recipe for gridlock. Cameron recalled finding it impossible to hold business meetings around the ports as people couldn’t get there. The only way to do it was to call meetings at his hotel in Lagos.

Onward project cargo transportation, Cameron added, requires a proper route survey by the local agent to check load clearances and bridge heights and some overhead cables might need to be removed. Additionally, bridges may be unsafe due to lack of maintenance.

The roads around Apapa and Tin Can were originally built to handle a daily volume of 1,500 trucks – but about 5,000 trucks now try to access the ports every day. There is a direct domino effect between the blocked roads and conditions within the ports. If trucks can’t get in, imports remain in the port, leaving no room for incoming vessels to berth. Demola Akinkunmi, of Africa Port Services, pointed to the use of Lagos port space to store equipment for the construction of Dangote oil refinery, planned to be Africa’s largest, as exacerbating the problem. The refinery is not expected to be completed before the end of 2020, Dangote executives have said.

Meanwhile, Kehinde Arowoselu, from Koeman Nigeria, reported potholes around the Lagos ports that are big enough to absorb a family car. According to the LCCI, bad port access roads account for 90 percent of accidents that cause damage to fragile project cargoes. A small amount of work carried out on a stretch of road in the port area of Apapa doesn’t begin to fix the problem, Cameron said. There needs to be a truck booking system and proper application of rules on parking.

Rice pointed to an absence of traffic control, truck parks and traffic lights. The result is that roads around the ports are clogged up with hundreds of trucks. He once spent 24 hours in a single jam in Lagos, Africa’s largest city. “It needs fundamental attention,” he said.

Despite everything, Rice believed that it can be done: “With sufficient capital investment and political will, it will be possible to transform the transport infrastructure in and around the Lagos port terminals within five years.”

Ademola likewise remained optimistic, predicting that efficiency at the country’s ports will improve and corruption will be reduced with a stronger economy. However, that may be too long for some to wait, so for a project cargo operator coming to a Nigerian port for the first time today, Ademola said there remains no substitute for “strong local experience.”  

David Whitehouse is a journalist who spent 18 years with Bloomberg, before turning to a career as a freelancer. He regularly contributes to The Africa Report in Paris.

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