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Why shipowners pay port fees in dollars – NPA

Mohammed Bello-Koko

The Managing Director of the Nigerian Ports Authority, Mohammed Bello-Koko, hasexplained why shipowners are mandated to pay for some transactions in dollars.

Bello-Koko in an exclusive interview with Sunday PUNCH in Lagos said that shipping is an international business, so all the transactions, and negotiations, among others are initiated offshore.

He added that the payments are usually done before the vessels arrive in the country.

“Why will NPA start charging in naira on a transaction that has already started and consummated in foreign currency? There are some vessels that are coming into Nigeria for the first time, if you are charging them in naira, how will they pay that naira?” he queried.

Sunday PUNCH had reported that shipowners operating in the country’s maritime domain have accused some maritime agencies including the Nigerian Maritime Administration and Safety Agency and NPA of charging them in dollars for transactions performed in Nigeria.

The shipowners also said that despite their pleas to these agencies, they still mandate them to pay some of the fees such as jetty berths and port dues in dollars.

The President of the Shipowners Association of Nigeria, MkgeorgeOnyung, said the group has been advocating for payments to be made in naira.

“Let us put it this way; in the past, all payments were supposed to be in dollars. I knew we advocated that the payments should be in naira considering the exchange rate volatility. But till now, the invoices are issued in dollars because shipping is a dollar-denominated business. I am not quite sure what the situation is.”

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Also speaking, a shipowner, Mr Tunji Brown, admitted they still pay some charges to the Nigerian Maritime Administration and Safety Agency, in dollars.

“For some duties, we have to pay in dollars. Security duty to NIMASA is paid in dollars. NPA and other charges are some of the payments made in dollars. Most times, vessels come from offshore. Once they come from offshore, it is no longer a Nigerian transaction because you are just coming to Nigeria for the first time. That is why they are charged in dollars.”

The Chairman of Depots and Petroleum Products Marketers Association of Nigeria, Mrs Winifred Akpani, said recently that the burden of sourcing forex in the parallel market for transactions domiciled in Nigeria was having an adverse impact on petroleum marketers.

“Accessing dollars for our operations has been an insurmountable hurdle for petroleum marketers. The difference between the Central Bank of Nigeria exchange rate and the parallel market exchange rate continues to get wider by the day,” she said.

Akpani noted that in addition to core operational expenses that are denominated in dollars, petroleum marketers also have to source for forex in the parallel market to pay for fees and levies that are also charged in dollars.

“For example, to charter a vessel to convey 20,000 MT of PMS within Nigeria for 10 days, freight charges are denominated in USD, which comes to about N220m at the official FX rate of N440 and a whooping N440m for petroleum marketers who have to source FX from the parallel market at N880. This implies an additional cost of N11 per litre for this transaction due to the FX official/parallel market differential,” she said.

She further said they have to pay jetty fees for the same transaction, which is normally paid in dollars.

However, the NPA boss said, “And all the exporters from Nigeria also naturally pay in dollars for all the cargoes being exported out of the country to any country in the world irrespective of the currency of use in that country. So why should our own be different? If you are exporting cargo to Asian countries right from here, you pay the shipping companies carrying your cargo in dollars. We have heard this complaint over time. What we are saying is, this is the international best practice whereby you charge shipping companies in foreign currency.”

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