Govt Policies Creating Revenue For Neighbouring Ports –Usifoh | Independent Newspapers Limited
Newsletter subscribe


Govt Policies Creating Revenue For Neighbouring Ports –Usifoh

Posted: Nov 9, 2015 at 7:00 am   /   by   /   comments (0)

Can you explain why government policies are inconsistent in the shipping sector?

Well, shipping is a service that involves the movement of people’s goods from point A to point B. Those goods are driven by government’s economic policy. So, when people cannot predict exactly where to move their investment, it is difficult for you to programme the types of ships you have to bring to this part of the world.

For example, Nigerian ports are very old. Apapa particularly, is much older than Tin Can, but you can find out that globally, we have much more bigger ships plying the waters, which means that we still need better port facilities. So, if government is not investing to develop new ports, it is a big challenge for people to plan how to do business and that is why if big shipping lines cannot bring their big ships here, it means that they have to transship the cargo at a certain point.

Instead of bringing the whole bulk here, they depend on smaller ships to transport their cargoes. We need bigger channels, we need bigger facilities and we need to turn the ships round the clock 24/7. But there are other ports in the country which are not used.

Calabar is there, Warri and the old Port Harcourt ports are there. In the past, we used to have Sapele and Burutu ports. In my younger days, ships used to go to all these places. But these ports are idle now. It means that every importer has to find his way to Lagos until the inland dry ports are developed and there is a good railway system and until we can get other roads other than Western Avenue and Apapa-Oshodi to take goods out of the two ports.So, these are the issues.

When you are sure that the economic environment is stable and friendly enough over a period of time, then you can make such huge investment. The ports are exclusive Federal Government domain. So you cannot even develop any port without the approval or partnership with the Federal Government. These challenges, as I said, are tied to the policies that drive our economic development.

How has government policies affected the movement of cargoes?

I don’t want to tie down to a specific issue because there is no aspect of the business web that doesn’t affect shipping. Let’s take for instance, the problem we are facing now -the difficulty in getting dollars to import. People are not ordering for goods as much as they do because they can’t afford it and things are more expensive. So, the ships are not coming, there is less cargo coming in. But if it were easy to predict, that would be nice.

Let me give you another example; the rice policy and the automotive policy. Take Grimaldi and the Port and Terminal Multi-services Limited (PTML) for instance. The car park used to be filled up to the brim. They used to have two ships here every day.

But now, the bulk of the business has gone to Cotonou because government suddenly said no more tokunbo cars. Before this auto policy came into effect, 80 per cent of the tokunbo cars were coming to Nigeria and then may be 20 per cent to Cotonou and at that time, all the second hand trucks were coming to Nigeria.

What is the implication of these policies?

After this policy, over half of the second hand vehicle businesses were going to Cotonou. Trucks are now going to Cotonou, which means that overall, Nigerian ports have lost about 50 per cent of these second hand vehicles’ trade. The fact that the Roll-on Roll-off business is down by at least 50 per cent currently, this company had to retrench almost half of its staff recently because there is no business. You cannot plan when government doesn’t give you a longterm prospect of your business developing.

How has the recent truckers’ strike affected shipping in the port?

The port loses money through cargo throughput; Standard Organisation of Nigeria (SON), National Agency for Food and Drug Administration and Control (NAFDAC) loses money, everybody loses money. The truckers themselves lose money. The trouble with the truckers’ strike is that they have a good case, but they did not handle it well. Everybody sympathises with them. The roads, for instance, from Coconut to Berger, have been under construction for some years. The stretch now from Trinity to Coconut has been abandoned.

The truck terminal here has been under construction, nearly finished, but abandoned. I can’t tell you more. God knows when they touched it last. So, the truck owners had a good case, but they didn’t handle it properly. The problem they have created was a loss to everybody because it means that if a ship had estimated to spend two days or 24 hours in the port, it would end up staying longer. If the ship is tied down in a port, it cannot meet its other commitments in other ports. That is a loss to the ship owner.

If a cargo is moving under contract, like our produce and semi-finished products or even finished products that we send out and if you miss your Bill of Lading time, there is a penalty. The buyer will impose the penalty clause. In as much as you are not the only supplier of these raw materials, the buyer will go to where they can get the cheapest. They have sources all over the world. So, any strike is a big loss to the economy, including the ship owners too.

What are the current challenges facing shipping lines in the country?

Nigeria is a developing nation. The major challenge is too much officialdom in the port, but this is gradually coming down. By officialdom, I mean every government agency in the past wants to be in the port. It is only now when discipline is being enthroned as a way of life that some of them are not physically present.

Also, we are dealing with the challenge of too much paper work. The world has gone e-commerce, but there are some agencies and people that are still doing the manual work and manto- man contact. When I was the Chairman of the Port Industry Anticorruption Standing Committee, we tried to help the Nigerian Port Authority (NPA) and a few others to minimise physical contact, which is the main reason why there is corruption. Inconsistency in government polices also affects the generality of the business environment in the maritime industry.

The other challenge is infrastructural decay. The nation hasn’t put enough investment on a regular basis to upgrade our port and that is why Apapa and Tin Can are the major ports that are active even now that business is going down and because they are attractive, they are more secure than the others and the system seems to work better here.

Our customer’s cargoes spend more time in the ports because of the infrastructure decay. The international trade is at the low ebb in the country. Business is down for everybody and if it is down for the importers, it is down for the ship owners. It is a global trend, but we are feeling it more because we are an import-dependent economy. So, these are the major challenges facing shipping companies.

What are the port operators doing to address the issue of corruption in the system?

We started the Port Industry Anticorruption Standing Committee in 2001. I was going through my old laundry and I saw some T-shirts with the inscription ‘Don’t give, don’t take bribe,’ which we printed and we were giving out to people then. The Nigerian Ports Authority (NPA) was running it as a solo crusade.

NPA was financing the committee 100 per cent. We tried as much as possible to sensitise people, but corruption is attitudinal. Many people come into the port believing that once you go there, you have made money. Nigeria Customs Service (NCS) wasn’t like this at that time, people were entering the Long Room, carrying documents all about and we advised them to move with the times and create platform where people don’t even need to enter the port to do their business as it happens elsewhere.

Also, when we started, we found out that it was a crusade that would take much longer and it was costing NPA a lot of money to sustain the committee. Secondly, we found out that the Nigerian business sector cannot end corruption at a short time. That is why our current president has reawakened that crusade. Corruption is endemic. The issue of corruption in the industry would take time to go unless we take the bull by the horn and fight it frontally.

Why did you think so?

There were so many groups, there were too many parties involved in the port system and they don’t allow the critical stakeholders to do their business; so the maritime industry engine was not running smoothly because of these obstacles. We tried to create that sensitisation.

We tried to make examples of some people that we discovered were corrupt, but our legal system frustrated it because if you catch or arrest somebody stealing something, they charge him to court, the case is adjourned, six months, one year, maybe after some time, they discharge the man the following day and you see him at the port again. But I am happy to say that most of the government agencies that we were dealing with then have actually moved in the right direction.

Most of them, except for Customs and the Port Authority, are no longer at the port. They have electronic platforms where they can handle anything, both within and outside Nigeria. So, it has reduced the stress of human traffic at the port. If everybody does not show the same passion to fight corruption, it can never end.

What is your opinion on government running a national shipping line?

In my personal opinion, if Nigerians can come together, those who want to seriously come into it, it will work well. If you say that somebody like Dangote who runs a shipping line now should form the nucleus of the shipping line, it may work because he will attract other investors.

People will trust him that he will deliver. But the problem with us is that we know that government cannot run a shipping line on its own because, these days, government doesn’t have the money to invest, except you put it to the private sector. So, it is wrong to have a national line run by government.

Government can only guarantee you that the business climate will stay favourable, so private investment should come in. If our people now can come together and convince government that they can work together, I think that is when national line can work. But as I said earlier, you are competing with global multinationals and very few countries in the world now, except centralised economies, run national lines.

What is your opinion on the reintroduction of Cargo Tracking Note (CTN) at port?

I hope that government will, for the sake of the economy, go slowly on it. In 2010, the Federal Executive Council approved it, but in 2011, it was abolished because they found out that there was no value it was adding. Where is all the monies collected in dollars?

Who accounted for it? Now, the same people have come to Nigeria in the 21st Century to tell us that they can secure people’s cargoes. The same people are coming and they are going through the government agency to say that Cargo Tracking is coming and Nigerians are told it has no cost.

If government has decided to bring in or reintroduce CTN, that is government’s decision, but the position of the shipping companies is that there is a cost, because the operators are not 100 per cent Nigerians and even if they are, to get the information that will go into the manifest, especially for import, will be produced by the shippers.

The shipping agent over there will pay so much. If it is reintroduced on container trade alone, our projection is that it will cost up to $30 million per annum. Who will pay this money? This is our estimation based on the figure that the operators have given per unit of container, vehicle and general cargo, So, somebody will pay for it and it is not the ships that will pay for it. It is the cargo owner that will bear the cost.

Business is already bleeding and I don’t blame them because Manufacturers Association of Nigeria (MAN), Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) and freight forwarders have been told that it won’t cost them anything. There is no free lunch in business. That is it. They have experienced it before; they assured them it wouldn’t happen when it started, but there will be a cost.

That is fundamental. There will be a cost if it is reintroduced. Will government derive full value for it? The concept of CTN is over 20 years old when, as I said earlier, everybody was doing paper work. But most of the agencies, especially, critical government agencies that have to do with cargo now, are compliant.

They do electronic business. Manufacturers, importers, all use electronic platform for their documentation. So it is more secured because that is the trend in the world. Shipping is an international business. That is the trend worldwide. If you are talking of security, we have security agencies.

They have ways of tracking things now. You can see that the volume of hard drugs, contrabands and substandard goods is reducing because the agencies have established electronic platforms for tracking the movements of cargo coming into Nigeria. If you are talking of security registration, three agencies are already doing it.

We have Electronic Ship Entry Notice (e-SEN) and you apply for it if you are bringing in ships to NPA. So they know what is coming. From the Automated System for Customs Data (ASYCUDA), Customs know what is coming, same with NAFDAC and SON.

The Nigerian Maritime Administration and Safety Agency (NIMASA) also has a registration platform. If you are bringing in ships, they see the manifest; they work closely with Customs and NPA. If government feels that there is room to make some people rich at the expense of others and bring another load of bureaucracy, we won’t quarrel with it, but all we are saying is that whatever we are doing as far as CTN is concerned, has been tried before but it didn’t work.

In Ghana, they tried to introduce it a few months back but I think it was the Ministry of Industry in Ghana that shut it down because people were protesting that it was going to cost them more. In Togo where they have introduced it, the cost has gone up from 25 euro per unit of container where it was before to almost 200 per cent.

Nigeria is not an integrated economy where things are not working well. The systems are robust enough to withstand any interference and I don’t think we should be selling our trade secrets and handing them to a third party in that way.