Current realities in the global crude oil market occasioned by the sharp decline in the price of the product from over $120 per barrel two years ago to less than $40 per barrel currently have justified the need for urgent diversification of Nigeria’s revenue base. In this analysis, Francis Ezem examines the role of International Cargo Tracking Note, ICTN, in checking massive revenue shortfalls, especially in terms of under-declaration of Gross Tonnage of vessels by importers, amongst other leakage sources.

Mixed reactions have continued to trail the proposed re-introduction of the International Cargo Tracking Note ICTN, initiated by the Nigerian Shippers Council NSC, in its drive to improve port operations effi ciency at all levels.

These divergent views may have stemmed from the manner the policy was implemented when it was introduced under the Nigerian Ports Authority some time in 2011.

For instance, many port stakeholders did not have access to the operators of the scheme, who were said to have been operating from Abidjan, Capital city of Cote d’ Ivoire without any liaison offi ce in any port location in the country and so many Nigerians had no access to the operators to lay their complaints or grievances when it mattered most.

Beyond these reactions lies the critical issue of protecting the economic interest of the Nigerian nation, especially given the increasing cases of revenue leakages through the evasion of import duty payments, fees and other legitimate charges that should accrue to the government.

Available statistics show that more than 80 per cent of goods imported into the country is associated with one form of underdeclaration, concealment, overinvoicing, under-invoicing, wrong classifi cation and sometimes outright smuggling through which the Federal Government loses over N500 billion annually.

These mind-boggling rate of loss on the part of the government may have informed the decision of the NSC to introduce the ICTN like many other countries of the world, which experienced similar loses in the past have but have been able to curtail them using the instrumentality of the ICTN.

The ICTN, which is a project of the African Union of Shippers Councils, is basically an advance cargo information system. It has also been described as an international verifi cation solution and cargo procedure, which facilitates the monitoring of cargo while on transit. It is a web based, high technological tool for import and export of goods that allows the generation of online real time trade statistics.

Investigations also show that the ICTN, which is not alien to most import-export trade jurisdictions across the globe, is currently operational in many shipping nations including West African countries, with which they have succeeded in taking control of their trade to enhance cargo security, help the authorities monitor cargo origin, quantity and other shipment information and automatically generate cargo information alert to the port of destination.

For instance, the scheme is in operation in many African countries such as Senegal, Benin Republic and many others. Available statistics also show that the policy has for several years been adopted in the United States, Turkey, Japan and many other Europe, America, and Asian countries.

It was gathered that other key benefi ts of the system include its ability to be accessed by the Nigeria Customs Service, terminal operators, shipping companies and government agencies such as National Agency for Food, Drug Administration and Control NAFDAC, and Standards Organisation of Nigeria SON, and Nigerian Plants Quarantine Service NPQS, among others.

In addition, the new system would facilitate online real time delivery of the electronic ship manifest in advance simultaneously to every other agency at the port, which before now was sent when the ship is about to berth in Nigeria as well as checkmating pilferages and leakages in the harbourages, as the consignments are tracked from port of origin to port of destination.

Executive Secretary/CEO, of the Nigerian Shippers Council, Mr. Hassam Bello, who spoke in an interview, observed that the ICTN is a modern tool for trade facilitation adding that it will make the nation’s seaports more effi cient and it is also a way of plugging the massive revenue leakages in our port system.

According to him, the government suffers massive revenue loss arising from the increasing cases of under-declaration and concealment.

He said: “The ICTN more than any other transport document, will reveal the content of what you are importing. It will reveal certain information about the value, the weight, the destination and many other things other trade documents such as the bill of lading cannot reveal. So the Nigeria Customs Service will use that piece of information to itself to enable it determine the appropriate duty on the cargo”.

He also said that as an advance cargo notice, the ICTN will enhance the receipt of cargo information in advance, which means that the processing of cargo documents will be done in advance by all the parties concerned; the Customs, the shipping companies and terminal operators, a development that will facilitate faster clearance of goods from the ports. This will by so doing reduce the current high cargo dwell time.

Security experts have also said that the ICTN is a potent tool that would enhance Nigeria’s moves towards total compliance with the International Ships and Ports Facility Security ISPS, Code.

Another feature of the ICTN is that being a web-based information system, ICTN is an open documentation and therefore promotes transparency.

“A very import ant crucial aspect of the ICTN is that it will checkmate the massive loss of revenue by the Nigerian Government through deliberate under-declaration of Gross Registered Tonnage GRT of ships that call at the nation’s seaports”, Bello said, adding that only those who would want to continue with the under- declaration of GRT of ships are those complaining about the ICTN.

The NSC-boss however disclosed that the Federal Government has asked the council to set up modern trade facilitation tools to drive the nation’s economy, especially in the maritime industry, which informed the re-introduction of ICTN, to enhance a reduction in cargo transit time, improve risk management and reduce fraud through tax evasion at the nation’s seaports.

Experts have also argued that at a time the Federal Government is talking about diversifying the nation’s economy and reduce the dependence on oil revenue given the uncertainties in the global crude oil market, which has seen the price of the black gold fall to less than $50 per barrel from over $120 per barrel before now and the maritime industry provides a veritable alternative.

But there are also fears that this may not be achieved due to high level of revenue leakages, which the ICTN has the potential to check effectively.

Meanwhile, Nigerian importers and exporters under the aegis of Shippers Association of Lagos State have thrown their weight behind the NSC over its decision to reintroduce the ICTN.

President of the association, Rev. Jonathan Nicol, who spoke in Lagos, disclosed that contrary to early insinuations, the shippers are fully in support of the scheme, which he said would facilitate trade, being advance information system in addition to blocking massive revenue leakages.

According to him, the scheme will checkmate the increasing cases of under declaration of the GRT of ships by the high and mighty in the Industry as well as stop the deliberate falsifi cation of ship manifest by some multinational shipping companies operating in the country in a desperate bid to evade payment of relevant taxes and levies.

“We are in full support of the ICTN because It will stop falsifi cation of ships’ manifests, checkmate under declaration of imports by the high and mighty in the Industry and provide the actual cargo tonnage of each vessel. Therefore, the correct cargo tonnage will be manifested to break the back bone of the well organised crime of cheating the Nigerian Government”, he said emphatically

Nicol also said: “The position of the Shippers Association of Lagos State is clear. Give us a guarantee that the shipping lines will not renege in the payment of the administrative charges in future as they did in Maritime Organisations for West and Central Africa MOWCA deal”.

The shippers-boss also disclosed that at the moment, the importers and exporters are reluctant to load their cargo because the clear position of ICTN was still unknown, and therefore called for calm.

He also insisted that the association is not in any confl ict with the NSC and therefore called all stakeholders in the Industry to embrace the scheme to checkmate the falsifi cation of cargo throughput by some foreign interests.

While calling other stakeholders to support the introduction of the ICTN, he insisted that the benefi ts to the Nigerian economy and by extension the entire citizens of the country far outweigh any issue that might arise in the course of the implementation of the scheme.

Immediate past president of the National Association of Government Approved Freight Forwarders NAGAFF, Chief Eugene Nweke, who reacted to the proposed reintroduction of the ICTN, said that freight forwarders are fully in support of the new system.

According to him, freight forwarders and their principals, the importers before now believed erroneously that the re-introduction of the system would increase cost of operation, but disclosed that after due consultations, freight forwarders, importers and other port stakeholders, have come to the realisation that the ICTN would not in any way affect the price of imported goods neither will it increase port charges nor cause additional delays in the clearance of goods out of the ports.

“ICTN, which originated from the United Nations Organisation UN, through its maritime regulatory organ, the International Maritime Organisation IMO, is in line with the ISPS, Code, which seeks to forestall a repeat of the September 2001 terrorist attack on seaport infrastructure”, he said.

Nweke also said: “The ISPS Code regulations require that port authorities initiate and develop security plans for vessels, port facilities, cargo and persons. The ICTN in this regard is meant to provide relevant information that would help to check maritime security threats”

While urging practicing freight forwarders to embrace and support the new ICTN initiative, he argued that it would not in any way constitute a clog in cargo clearance process, neither does it increase the cost of doing business in the ports.

He cited arbitrary port charges such as the seven per cent port surcharge, fi ve per cent sugar levy, Terminal Handling Charges THC, the two per cent National Automotive Council NAC levy, among several others, which apart from increasing the cost of doing business at the ports, also pose a major threat to speedy cargo delivery.

Meanwhile, president of National Council of Managing Directors of Licensed Customs Agents NCMDLCA, Mr. Lucky Amiwero, who also spoke on the possible cost implications of the ICTN, insists that it was not possible for the new system not to attract additional payments on the part of the shippers (importers and exporters).

He argued that the new system must and should be attached to a particular service, which makes additional levy or cost arising from that imperative.

“There is no way the new ICTN will not attract additional charges because it must be tied to a particular service head but for now stakeholders have little or nothing to do about it since the Federal Government has already given its approval to the new scheme”, he said.

Amiwero argued that as the commercial regulator of the port industry in Nigeria committed to reducing the cost of doing business, the NSC should ensure that the new system does not expose shippers to additional charges.

But experts believe that little additional cost arising from the new system should be tolerated by importers, exporters and other maritime stakeholders, who have consistently argued that the benefi ts of the new system especially in terms of security, enhanced revenue generation, effi cient and timely cargo handling and release at the ports far outweigh this little additional cost.

It is therefore expected that the issues of import related fraud associated with cargo concealment, under-declaration of vessels’ tonnage and over-invoicing would be a thing of the past when the ICTN comes on stream.

Stakeholders also admonish that inadequacies associated with the ICTN under NPA such as lack of access to the operators of the system should be completely addressed so that Nigeria and Nigerians would derive the maximum benefi ts of the ICTN.


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