Terminal operators lost N58.9bn in eight years – Report

Terminal operators at Nigerian seaports have in the last eight years lost N58.9bn, a report by Akintola Deloitte has revealed.

A copy of the report that was made available to our correspondent stated that the loss was due to a combination of factors, including rising Consumer Price Index, depreciating value of the naira and the terminal handling charges, which had remained largely unchanged since 2006.

The report stated, “While the terminal handling charges have remained largely unchanged, the CPI for Nigeria has increased by 119 per cent within the same timeframe.

“At concession, the dollar to naira rate was $1 to N151 (parallel market). However, the rate is now much higher. There has been no change in the terminal operators’ charges as well as no element of the CPI adjustment.

“The effect of the exchange rate has not been applied on the terminal handling charges since the concession agreements were signed. The average estimated loss over the years amounted to N58.9bn.”

It added that an adjustment of the CPI and the foreign exchange fluctuation on the terminal handling charges showed that the THC should be charged at 238 per cent higher than its present fee, which would put it at N153,780 instead of instead of N45,500.

The report added that the fluctuation in the exchange rate had affected the business of the terminal operators in the area of payment of government fees as most of the commitments of the operators were in dollars.

It further stated, “The terminal operators have lost potential revenue when yearly, the THC is converted to dollars. The THC value in 2006 ($211) was higher than the value in February 2016 ($138).

“This loss in the dollar value of the THC is due to the fluctuations of the dollar to naira rate and is estimated to be about N89.8bn for the industry from 2007 to 2015.”

The spokesperson for the Seaport Terminal Operators Association of Nigeria, Mr. Bolaji Akinola, described the current situation as a dire one.

He said, “Inflation and depreciation of the naira have eroded our earnings as terminal operators by more than 300 per cent. For instance, our salaries and overhead between 2006 and now have gone up by over 1,000 per cent, yet our earnings have been reduced by threefold when you benchmark it against the 2006 earnings.

“What we are earning now is even below what we earned in 2006, especially against the current value of the naira. This is the reality on ground, and again, there is no volume.”

Akinola added that certain government policies had contributed to the taking of cargoes away from Nigerian ports, noting that there was a need for urgent measures to be taken as it would be difficult for STOAN members to continue to operate under the present conditions.

There was no response from the Nigeria Shippers’ Council, the port economic regulator, as its Executive Secretary, Mr. Hassan Bello, did not respond to calls or a text message sent to his mobile telephone line.