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Maritime corruption in Nigeria costs $182,300 per shipment, says MACN

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Corruption adds around 15% to the cost of importing food and bulk products into Nigeria, according to a report from the Maritime Anti-Corruption Network (MACN).

The report details the results of a study developed by socio-economic impact assessment firm QBIS which applies a dollar value to direct and indirect costs of maritime corruption across the private sector, government, and society in Nigeria.

Government officials extracting bribes for routine tasks, or ‘coercive’ corruption, causes economic damage through ship delays and higher trade costs, as well as endangering the wellbeing of seafarers and exposing them and others to the risk of criminal prosecution.

In its business-as-usual scenario, where all bribery requests are met without resistance, the study found corruption adds $147,000 per import shipment of grain and more than $187,000 per shipment of petrol. Food and petrol account for around a third of Nigeria’s imports.

“With 63% of Nigerians or 133m people classified as multidimensionally poor, most Nigerian families do not have a budget surplus. Increased import costs due to corruption are therefore likely to reduce their household demand and make essential goods less affordable to the average Nigerian family,” the report said.

The business-as-usual scenario adds 1-2% to retail prices for grain and petrol.

“Maritime corruption results in an annual reduction in GDP of $204m, an annual reduction in revenue collected by Customs of $42m, and 235,000 fewer Full-Time Equivalent (FTE) jobs due to less sales and economic activity,” the report said.

A zero-tolerance approach to bribery during vessel clearance cuts the damages caused by corruption by around 62%, the study found. By slashing around $114,000 per shipment in corruption costs, the bill for marine corruption falls by around $100m per year, and its economic impact drops by $230m.

“By ‘Saying No’ to maritime corruption, GDP increases by about $130m annually, customs revenue from tariffs increases by $28m annually, and more than 147,000 FTE jobs are created due to more sales and economic activity across the supply chain in Nigeria,” said the report.

MACN said the combined efforts of industry and government have reduced corruption in Nigeria. Over 90% of corruption incidents are now resolved within 24 hours, it said, whereas a single case took between seven and 10 days before 2019. The average resolution time is now one to eight hours.

“Impressively, 98% of escalated incidents have been successfully resolved, and the remaining 2% have been escalated to authorities to clarify protocols,” said MACN.

The full report The Cost of Maritime Corruption to the Industry and Society is available online.