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NAGAFF expresses fears of increased charges at Nigeria’s ports

National Association of Government Approved Freight Forwarders (NAGAFF) has
expressed fears of increased service charges at the nation’s ports if the
Nigerian Ports Authority(NPA) insists on Dollar payments from the port

association made its concerns known in a letter addressed to the NPA Managing
Director, signed by the NAGAFF Secretary General, Mr Arthur Igwillo, a copy of
which was made available to newsmen in Lagos.
association said the major concerns are that the exchange rate of the Naira to
the Dollar (N300 to $ 1) would skyrocket the taxes payable by the
concessionaires, which would leave them to increase their service charges to
meet up with their obligation.
therefore recommended that if the NPA would not accept Naira payment, the
concessionaires should be allowed to make payment deposits to the NPA in the
prevailing CBN rate.
“In the opinion of NAGAFF, the Nigeria Government and NPA
should not

pretend not to know what is happening in the
exchange rate market. 

“Instead of coercing and threatening the concessionaires, it
shall make a lot of business sense for NPA to invite the concessionaires to
payment of bills with reference to the Dollar rate. 

“It is our view that operational money realized should be
paid in Naira value rather than Dollar.  If Dollar must be used to effect
payment, the concessionaires should be made to deposit the money in the
prevailing exchange rate of the Central Bank.
“If Government refuses to do the needful, it means that the

may not have any alternative than to increase
their local charges to meet

up with their overhead, profit margin and fees
payable to the Government

as investors.

“It is illogical to ask the concessionaires to
pay their taxes in Dollars from the local content operations where payments for
their services are 
paid in Naira. 

“The NPA should not have an omnibus template asking that dues from the concessionaires whether sourced
locally or from international outfits that pay them in foreign exchange should
be lumped together and expect them to pay in Dollars. It makes more sense if
dues are paid from the currency that the concessionaires get paid for their

“If the NPA despite the variation in the
exchange rate insists on

collecting dues in Dollars, it will be right for
the concessionaires to ask

for an upward review of its charges.  This
obviously will hurt the economy

because the multiplier effect of this will be

“At the end of the day it is the common man that
has continued to suffer

the whole essence of insensibility to humanity
in Nigeria.  We in NAGAFF

may for the first time support the port
concessionaires in any action they

take to stop unfairness to business relationship.

 “As we speak the case of uncommon charges is ongoing
between Nigerian Shippers Council on one part and STOAN and Shipping Companies
on the other part at the Federal High Court.  The frustration has gotten
to a stage that it appear there are signs of illusions on the part of

“It is the opinion of NAGAFF that Government and
Nigerian Ports Authority(NPA) should realize that the cash crunch is everywhere
in the economy. We
hope that the directive to the concessionaires should be negotiated to accommodate
the economic meltdown in Nigeria at the moment,” it read in part. 

in the letter, said that as a critical stakeholder, it was particularly
concerned that the NPA had directed that ‘all holders of leases with NPA settle
full rental obligations to it within four weeks.
It said that it spite of its disenfranchisement during the
concession exercise of the port terminals to private operators, it hopes that
in due course, the ports should be structured to accommodate local content.

It, however, said that the NPA may have as well become unconcerned
with carrying out its oversight functions in port administration having been
relieved from the financial burdens usually incurred on capital expenditures,
overheads and patronages, adding that the system had enabled the NPA to
maximize revenue collection through the effective port operators and improved

NAGAFF said that since the concession was to
increase port competitiveness, the enabling environment must be created to
honestly achieve the set goal.

“The interesting part of the concessioned
agreement of our port Terminals are the aspects of fees payable to NPA which
are usually in US Dollars. These
fees shall include but not limited to commencement fees, fixed annual payments
of installments and throughput fees based on total volume 
of cargo handled on vessels that used the leased

“In the opinion of NAGAFF to have structured the
payment of concession fees in US Dollars 
is most patriotic because the concessionaire
charges shipping lines that use their facilities in US Dollars.  The idea
of port concessioning policy of the Government is to increase competitiveness,
efficiency and reduce cost of doing business in the Nigerian ports.

“It is also in the public glare that it is not
the problem of the concessionairs who are struggling to meet up their payment
of fees in Dollars to the Government.  The inflationary rates and decline
in the

value of Naira is also considered a major

“For the avoidance of doubt the official rate of
the CBN exchange rate of N197 – N199.50 to a 
Dollar is very difficult to get.  The
mandate of the NPA to the concessionaires to pay up within two weeks or face
sanction including revocation of contracts is unfriendly because the open
market rate is well

over N300 to a US Dollar.

“It means that if the concessionaire is to pay
US$2,000,000.00 which was N130 at the time of signing the contract, it will now
pay at N300 per US Dollar.  The implication is that what would have cost
the concessionaire N260,000,000 at N130 per US Dollar will now cost
N600,000,000 at the rate of N300 to a Dollar,” it said.

It also requested to know what the NPA what been
doing with concessioned marine duty including Pilotage, Towage and Dredging,
being handled under a third party arrangement.

“We are yet to know what has been happening at
the concessioned marine duty of the Nigerian Ports Authority which brought in a
third party under NPA supervision, the formed special purpose vehicles under
Lagos Channel Management, Bonny Channel Company and Calabar Channel Management
Company to provide pilotage, towage and dredging services at the port.”

Copied in the letter are the President, Commander-In-Chief
of the Armed Forces; the Senate President; the Speaker of House of
Representatives;  Secretary to the
Federation;  the Minister of Transportation;  Minister of Finance; the National Security

Also copied are the Executive Secretary/CEO
Nigerian Shippers Council; the Comptroller General of Customs; the Registrar of
the Council for Registration of Freight Forwarding in Nigeria and other
strategic heads of the Government connected to the ports and border activities
of the Nigeria international trade.

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