Why high shipping cost affects Nigeria’s economy, by NSC boss

The Executive Secretary, Nigerian Shippers’ Council, Mr Hassan Bello, says the high cost of shipping has an adverse effect on the nation’s economy.

Bello told newsmen shortly after the Union of African Shippers Council meeting in Abuja.

Part of discussions at the meeting, he said, included how to address high charges and transport cost among member states.

“Nothing has been agreed yet, but our general consensus on this is that the charges and transport cost affect our national economies. The cost of transportation is 40 per cent more on Africa than in any other region.

“It is important that we look at this cost in a very scientific manner and negotiate them appropriately.

“We are not a price-fixing organisation, but we should also have moderation in the cost; the lower the cost of transportation, the more the economy grows, and vice versa.

“We have the cost of transport being substantial in the cost of production in our manufacturing sector.

“If we have a high cost, the cost will ultimately be pushed to the final consumer and that means inflation trends in our economies which is not good,” Bello said.

According to him, it is important for member states to be involved in the negotiations on charges, as they are arbitrary and unilaterally levied.

He said the members were not informed of the components of these charges and do not know how they were arrived at.

He said, “We have a consensus that some of these charges are not verified, they are unsubstantiated and they are not arrived at with economic indicators.

“How things are priced in the economies, especially international trade on transportation, should be scientifically arrived at.

“So, the union wants the shippers’ council to represent the shippers, and shippers should take part in the negotiations of this cost.”

According to the executive secretary, the NSC has been engaging stakeholders in the industry regarding the reduction of charges.

He said that a consensus would soon be reached after which there would be a 30 to 35 per cent reduction in shipping charges in the country.

Bello, however, said the focus of the meeting was on reduction in international surcharges, including freight.

Meanwhile, the Director, Consumer Affairs, NSC, Mr Cajetan Agu, also reiterated the need for transport cost to be reduced for the benefit of the continent.

Agu said that member states also agreed on the need to obtain reliable data that would provide avenue for engagement with multinational companies on charges.

“On the issue of transit rate and transportation cost, it was discussed and agreed upon that there is need to deploy technology on the issue of transit.

“There is a convention that if there is a cargo meant for Niger and it is transiting through Nigerian port to Niger, customs usually provides a convoy of escorts that would follow the consignment from the Nigerian port to the last border country.

“The essence is to ensure that there is no diversion. But you will realise that in the modern era, with technology you do not need to go through all that,” he said.

Agu further said that the committee would commence implementation of the resolutions made at the meeting immediately.

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