Re-introducing Destination Inspection

The Nigerian Ports Authority (NPA) is working hard to meet Government’s revised January 2004 deadline for the resumption of Destination Inspection.

The leadership of the Authority has constituted a task force codenamed, Destination Inspection Operation Endurance Success, to implement the policy.

Destination Inspection refers to the practice whereby cargo destined for a country’s port is inspected at the point of entry rather than at the point of shipment, otherwise termed Pre-shipment Inspection.

The Oil Boom of the 1970s stepped up the rate of imports, which in turn drove home the need to monitor the quality and quantity of goods imported into the country.

Governments in Nigeria have alternated between the two inspection options with the objective of achieving maximum profit.

Although Destination Inspection was the preferred system at the peak of the Oil Boom era, it was discontinued by the Babangida administration in 1988 and replaced with Pre-shipment Inspection. It was reintroduced 10 years later but the present Administration reverted to Pre-inspection after reviewing the system. However, lapses in the process have forced Government to revert to Destination Inspection once again.

These lapses include:

· Importation of fake and substandard goods
· Concealment of goods
· Non-resolution of conflicts arising between the Nigerian Customs and the three Pre-shipment Inspection agents
· The late arrival of the Clean Report of Inspection (CRI), which causes Nigerian importers to lose money to demurrage
· Loss of revenue

In readiness for the take off of Destination Inspection, priority is being given to:

· Reducing container congestion by moving container delivery activities to off-dock facilities
· Modernizing and rehabilitating container stacking areas and quay aprons at the major ports with the aim of accommodating more goods and withstanding heavy loads
· Creating more shipside stacking areas and facilitating the effective utilization of heavy duty cargo handling plants and equipment
· Procuring additional plants to complement existing ones (in this regard Nigerian Customs has acquired 40 Hyster cranes, 12 Kalmer cranes, eight Isuzu and eight Douglas brand tow tractors, 10 Hyster forklifts and 23 Hyster spreaders)

For Destination Inspection to succeed, experts have posited that there must be computerization of procedures and interconnectivity of key operations and operators. Scanning machines would also have to be made available.

One of the major problems facing Destination Inspection has been the inability of Customs personnel to correctly assess the cost, quality and value of imports, especially for machines, electronics and technical materials. This issue is now being addressed.

The Nigerian Customs, in preparation for the re-introduction of Destination Inspection, has improved staff training on the Automated System for Customs Data (ASYCUDA), a project aimed at enhancing capacity building. When completed, Customs personnel would be able to draw vital information from stored data, effectively eliminating the need for pre-inspection services.

Reforming Nigerian Ports

Port reform is central to achieving the maximum benefits of Destination Inspection. There are 13 active ports and terminals in the country, but none boasts the 48-hour turnaround for vessels as stipulated by the International Maritime Organisation. There are a number of reasons for this shortcoming:

· Inadequate supply of crafts and plants
· A cumbersome documentation system
· Dilapidated port infrastructure
· Low labour productivity
· Corruption, vandalism and criminal practices
· Multiplicity of Government and security agencies

To heighten the stakes, a hub-port is under construction in Lome, Togo, where Nigerian-bound cargo may be diverted. A hub-port is a huge port with modern infrastructure and facilities, which improves the efficiency of port operations and cargo delivery. A hub-port is vital to the functioning of Nigerian ports, which have traditionally suffered from lack of patronage. In 2002, 35.4 million cargos, as against 35.9 million in the previous year, passed through the ports, leaving a shortfall of over half a million cargos.

Government turned to the World Bank for port assistance, but rejected the Bank’s proposal of job cuts by about 75%.

Labour leaders insisted that accelerated commercialisation, and not full privatisation, would provide meaningful solutions to the problems faced by Nigerian ports.

Former Transport Minister, Ojo Maduekwe, while inaugurating a 21-member Implementation Committee on Ports Reforms in early May, maintained that Government would not sell the seaports but would decentralize the NPA into nine autonomous port terminals. The terminals, he said, would operate as subsidiaries along the zonal structure of the existing ports.

The Minister also said that Government aims to increase productivity and generate wealth through improved port operations and through the introduction of international standards that would enhance the welfare of port workers.

The Committee’s terms of reference include:

· Implementing the landlord model of port operations within a transitional period of three to five years
· Amending the port Act to accommodate the new structure of the NPA
· Decentralizing the NPA into nine autonomous port terminals
· Devising appropriate strategies for eliminating constraints against modern port management and operations
· Devising, in conjunction with the NPA and the Joint Dock Labour Industrial Council (JODLIC), a well-researched and workable implementation strategy for the redeployment of the large number of NPA employees that would be affected by the restructuring

The NPA management, on its part, is addressing key lapses in order to achieve the 48-hour turnaround for vessels. Its strategies include:

· 24-hour port operations
· Provision of modern cargo handling equipment
· Restoration of train services at the ports
· Efficient and secure handling, as well as rapid and easy clearance of cargo
· Efficient piloting, towage, dredging and allied port services
· Reduced tariffs
· Computerized port operations

The chances of Lagos ports becoming a transshipment hub are high, especially if the Destination Inspection process is complemented by reforms. In order to secure a bright future for the Nigerian maritime and import sectors, therefore, there must be: