THE STUDY OF MARITIME FRAUD AND ITS EFFECT ON COMPETITIVENESS OF NIGERIAN PORT(A CASE STUDY OF APAPA PORT)

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND TO THE STUDY

Despite the efforts of the government of Nigeria in fighting corruption in all sector, several unwholesome activities is still going on in the maritime sector most importantly by the shipping agencies and terminal operators, under the watchful eyes of government agencies, conniving to slam fictitious charges on importers and agents in what has been described in the maritime domain as a ceaseless economic rape.The product of this organized graft, which often runs into several billions of naira annually has continued to swell the volume of the capital flight the country suffers yearly.Following this scheme, used vehicles, clothing, food items and other goods are now cheaper to buy in Cotonou, Lome and Ghana markets, than when purchased in Nigeria (Thisday, 2015).

The sour side of is anomaly is that importers and clearing agents, in their battle to survive and grow in business, later pass the prohibitive charges to the consumers who now pay far more for the goods than necessary.

According to previous findings, the terminal operators, shipping lines and shipping agents have taken advantage of the largely unregulated maritime industry in Nigeria to hike charges like demurrage, and container deposit, among others, which are at variance with what obtains in neighboring West African ports.A full analysis of shipping charges conducted in three African countries – Nigeria, Ghana and Benin Republic by a maritime industry medium, “Shipping Position,” shows that port charges inNigerian remain the highest in the ECOWAS region.Experts have, however, attributed the high charges to the unwholesome practices among shipping companies operating at Nigerian ports.Again while it takes few days to get the container deposit refund in other ports once the empty container is returned, it may take up to three months in Nigeria because the terminal operators allegedly delay receiving it in order to build up demurrage that may eat up the deposit.Other charges not collected in other countries but obtainable in Nigeria include MOWCA levy and stamp duty (Tancott, 2015).

Importers are also perplexed that contrary to what is obtainable in other West African countries’ ports, Nigeria only offers three days free of progressive storage charge while Benin, Ghana and Cote D’Ivoire offer seven days free of progressive storage charges.Maritime experts have argued that the development was threatening the nation’s sea hub status as Cotonou, Lome and Accra ports are snatching cargoes from Nigeria.It is feared that the partial cargo drought often experienced in the country, is attributable to this development as some shipping companies prefer to call at other West African ports where they enjoy huge incentives, especially reduced charges are largely the outcome of such practices (Tancott, 2015).The soaring frequency of smuggling is because some importers may not make profit after paying all charges at the ports.

Other stakeholders like the Nigeria Customs Service (NCS), Nigeria Immigration Service, Quarantine Service, Port Health and the Nigerian Maritime Administration and Safety Agency (NIMASA) who are also part of the import chain also contribute to the delay in carrying out clearing duties and corruption at the nation’s ports. All these have made business very difficult and affected competiveness of the maritime sector in Nigeria.

Apapain Lagos State, Nigeria contains a number of ports and terminals operated by the Nigerian Ports Authority (NPA), including the major port of Lagos State and Lagos Port Complex (LPC).The region of Apapa lies near the mouth of Lagos lagoon, and contains ports and terminals for various commodities such as containers and bulk cargo, houses, offices and a small old disused railway station (Apapa North). It is the site of a major container terminal which was owned and operated by the Federal Government of Nigeria until March 2005, and now is operated by the Danish firm A. P. Moller-Maersk Group (Wikipedia, 2016).

1.2   STATEMENT OF THE PROBLEM

Ports play a key role in the Nigeria economy and development, as nearly 75% of the trade between the Nigeria and the rest of the world is handled in ports. Thus, the importance of ensuring efficiency in ports is related to the ability of the country to be competitive at international level. Unfortunately corruption and extortion by the shipping agencies, terminal operators and the government officials has continued to frustrate importers leading to price hike of commodities, encouraged smuggling and the competiveness of Nigerian port as many importing prefer to patronize other ports in the neighboring West African countries. However, the researcher is examining the level of fraud in the maritime sector to ascertain its effect on competiveness of Nigerian port.

1.3   OBJECTIVES OF THE STUDY

The following are the objectives of this study:

1. To examine the level of maritime fraud in the Nigerian ports.
2. To examine the effect of maritime fraud on the competiveness of Nigerian port.
3. To identify how the maritime fraud can be combated.

1.4   RESEARCH QUESTIONS

1. What is the level of maritime fraud in the Nigerian ports?
2. What is the effect of maritime fraud on the competiveness of Nigerian port?
3. How can the maritime fraud can be combated?

1.5   HYPOTHESIS

HO: There is no significant relationship between maritime fraud and competiveness of Nigeria Port

HA: There is significant relationship between maritime fraud and competiveness of Nigeria Port

1.6   SIGNIFICANCE OF THE STUDY

The following are the significance of this study:

1. The outcome of this study will enlighten the government of Nigeria and the general public on the spate of corruption going on in the maritime sector and how it affects the competiveness of the Nigeria port. It will also educate on approaches to combat the menace of corruption in the maritime sector.
2. This research will be a contribution to the body of literature in the area of the effect of personality trait on student’s academic performance, thereby constituting the empirical literature for future research in the subject area.

1.7   SCOPE/LIMITATIONS OF THE STUDY

This study will cover the level of fraud being carried out in the Nigerian maritime sector and how it affects the competitiveness of the Nigerian Ports.

LIMITATION OF STUDY

Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.