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Business, Maritime

Nigeria Ports Faces Uncertain Future

Posted: May 8, 2015 at 1:00 am   /   by   /   comments (0)

By Andrew Airahuobhor


There is no crystal ball to determine what the future holds for Nigerian ports. As gateway to the nation’s economy, its management pattern directly impacts on the national economy. Thus President Goodluck Jonathan’s appointment of a neophyte Sanusi Lamido Ado Bayero as new managing director of Nigeria Ports Authority (NPA) barely three weeks to the end of its tenure becomes an issue of concern.

New managing director of the NPA formally took over from Habib Abdullahi on Wednesday who served for two years and eight months from August 2012.

For Bayero, a Kano prince, who lost the contest to become Emir of Kano to controversial former Central Bank of Nigeria (CBN) governor Sanusi Lamido Sanusi, port administration is completely unfamiliar terrain. As someone whose life revolved around the public sector, having not worked in the private sector before, managing a dynamic agency as NPA is certainly a herculean task.

He started his working career as a lecturer at the Kaduna Polytechnic after obtaining a degree in Law from the Ahmadu Bello University in 1983. He later became a state Counsel at the Ministry of Justice, Kano, and later to the Kano State Investment and Properties as Legal Adviser/Company secretary.

He was also director, special duties in Kano State government and director general, Kano State Council of Chiefs.


Elusive Port Development Plan

Officials of Moody’s Investors Services, a rating Agency led by Mr. Mauro Leos had visited the former managing director of NPA, Habib Abdullahi to find out NPA’s plans to become the Hub port in Africa, the capacity of Nigeria ports, where the ports will be in the next five years and its plan for development of Nigerian economy.

NPA was targeting to handle five million twenty feet equivalent units (TEUs) of containers in five years. It handled 1.06 million TEU in 2014.

Although the ports now operates under a Landlord model, with private companies taking over cargo handling operations, there are however no indication that the country’s port’s infrastructure is in readiness to handle such upsurge in containers.

Dilapidated road networks, poor procedures and processes in cargo clearance, poor organization of trucking operations, archaic inspection procedures etc all combine to make cargo clearance a difficult task, often causing congestion and huge traffic gridlock in Apapa and environs that regularly cripple port operations.

For the year 2014, the Nigerian Ports Authority (NPA) recorded a cargo throughput of 86,603,903 million metric tonnes of cargo, an increase of 12.64 percent per cent over the 2013 figure of 76,886,997 metric tones. There has not been a significant improvement in port infrastructure since 1980s.

But the executive director, Finance and Administration of NPA, Olumide Oduntan confirmed that the Authority has increased its budgetary allocation to Capital Projects in order to improve infrastructural development in the Ports. But the actual budgetary allocations have remained a secret to the Agency.

An average of N8 billion is collected is collected quarterly as seven percent port development levy according to statistics from the Nigeria Customs Service (NCS), the revenue collecting agency of government on imports and exports. But the federal ministry of finance has continued to keep mum over remittance of fund.

While the NCS collected N7.2 billion from 7 per cent port levy in first quarter 2014, it collected N9.29 billion on port levy in the third quarter 2014.

Curiously, the Nigerian Ports Authority (NPA), the agency responsible for using the funds to develop the ports, has denied receiving allocation from the port levy. The NPA reportedly blamed the setback being encountered in its capital projects on the inability of the ministry to release the funds to them.

Assistant general manager, public affairs of NPA, Musa Iliya said they have not been receiving funds from the port levy, saying, “You ask the ministry of finance how much they have paid to us and from when to when?”

The seven per cent levy is collected on all goods imported through the seaports. It is officially collected by Nigeria Customs Service (NCS) and usually redirected to the Nigerian Ports Authority (NPA) for rehabilitation and development of the ports.

The NPA claimed that capital projects being undertaken by the agency might suffer setbacks as the Ministry of Finance has refused to release over N18 billion accrued from the port development levy in 2013. According to them, if the funds are released, there is so much the agency could do in developing ports.

Special Adviser to the minister of finance and coordinating minister for the economy, Paul Nwabuikwu, could not give any answer to how the Ministry has remitted the funds, preferring to remain silent on the issue, apparently because of the several cases of unaccounted funds trailing the current federal administration.


Role of Public ports

Nigerian ports provide the vital link for getting goods to the nation’s consumers being an import dependent economy. Nigerian Ports Authority (NPA) established in 1954 by ports Act ( Cap 155 of the law of the Federation of Nigeria –amended 1999) as an operating port with the responsibility  of providing all port services.

It was initially responsible for two major ports in Lagos and Port Harcourt, and in 1969 became responsible for all other ports owned by private merchant companies e.g Warri, koko Burutu and Sapele.

Following the port development programme in the late 1970 and subsequent changes in port administrative structure in later years, the eight ports that emerged were controlled by NPA. The major ports are; Lagos Port Complex, Tin Can Island Port, Calabar Port, Delta Port, Rivers Port, and Onne Port.

But the terminals were concessioned in 2006 to about 26 private companies as terminal operators on lease terms ranging from 10 to 25 years. Functions of Terminal operators are cargo handling, stevedoring, warehousing and delivery; acquisition of cargo handling and operations related equipment; development and maintenance of ports’ superstructure; maintenance of safety and security within the terminal.

Anticipated benefits of ports Concessioning include better and more efficient port management especially operations as handled by terminal operators; the application of private capital to socially and economically desirable projects, freeing up government funds for other priority projects; creation of new revenue streams for government; the attraction and use of foreign investment and technology.


Labour concerns

Maritime Workers Union of Nigeria (MWUN) has issued a 14-day ultimatum to NPA to resolve lingering issues of entitlement owed tally clerks and onboard security men. The ultimatum came a day after Bayero was appointed managing director

The letter was signed by MWUN secretary general, Aham Ubani. It gave notice that it would call its members out on strike in all the nation’s seaports after expiration of latest deadline. This notice is the third in the series of threat to embark on strike action, but the union said this is the final.

There are indications that they will carry out the threat and plunge the ports into another round of crises that will negatively impact the nation’s economy, heavily dependent on imports of finished goods. Coupled with the bottlenecks already slowing down cargo clearance, a strike action by MWUN will result in disruption in cargo discharge from ships. More than 500 ships call at the nation’s ports daily.

The union letter reached NPA a day after Bayero was appointed and the strike is expected to kick off on Monday five days after his resumption unless the issues are addressed sooner.

When the new administration of Muhammadu Buhari assumes office in May 29, there are strong indication he would effect a change in the leadership of all federal government’s Ministries, Departments and Agencies. If this happens, before Bayero grasp understanding of port administration, a new person will be starting to learn the ropes, unless there is a departure from the norm that has promoted mediocrity in public office appointments.