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Our ports are attractive to Nigerian importers – Bello

By on October 17, 2014

The Executive Secretary, Nigerian Shippers Council, Mr. Hassan Bello, in this interview with COMFORT OSEGHALE, speaks on the changes in the country’s maritime industry and the controversial Oil and Gas Free Trade Zone Act

The most frequent complaint by freight forwarders and shippers is that the council has done nothing since its appointment as a regulator on the arbitrary charges by shipping agencies and terminal operators. What would you say to this?

It is wrong to say the council is not doing anything to moderate charges at the ports. Even before our appointment as the regulator, we had been able to keep down the charges. The shipping industry is dynamic; it is represented by varied interests, so varied that one has to be on top of the situation all the time. What we did, and this can be verified, is to stop the impunity of arbitral increase in charges. When we were appointed as the regulator, neither the service providers nor the government was able to increase the charges by a kobo. We are not saying the increase cannot be done but the law says in any case of increase, you have to come to the NSC.

Increase in tariff must be scientifically based; it is not emotive or done off the hand. There are scientific ways of reaching an agreement on tariffs. Tariffs sometimes fluctuate; they go up and down. The problem is that we cannot afford impunity, where people wake up and just increase tariff. It is not done like that everywhere. Shipping is international; tariffs have comparative elements. We do surveys to see what our competitors are doing about their tariffs. Then we try to arrive at affordable and transparent tariffs that are scientifically analysed.

Based on the survey you have done, how would you rate Nigerian ports’ tariffs against those of neighbouring countries, considering that the Cotonou Port has become a strong competitor?

It is a function of efficiency; gone are the days when we used to say people should not go to Cotonou. If our shippers want to import their cargoes through Cotonou, they can; but Nigerian ports are coming on very strong. Our ports are efficient; there have been investment in port infrastructure, equipment and so on. The efficiency of Nigerian ports is comparable to what is happening at the moment. People are bringing their goods through Nigerian ports more and more. If people are going through neighbouring ports, and I don’t want to name any, then there must be something that is going on.

Niger Republic, for example, is a landlocked country but for all their transit cargo, they use foreign ports like Ghana and maybe Benin Republic. Because Nigerian ports have become more efficient, they want to import cargoes through them. We are expecting about three million metric tonnes of Nigerien cargo through Nigerian ports. Nigerien shippers have the right to go to anywhere but they are choosing Nigeria because of our efficiency.

Nigerian ports must be competitive and this is just the beginning. We are trying to eliminate unnecessary delays in the clearance process. If we require 20 documents to sign in Nigeria, it can be pruned to two or three documents. We plan to increase e-commerce, automation and electronic trade; then, you will see that efficiency is coming. Another reason why our shippers are using neighbouring ports could be that our ports have reached their expected capacities. However, the Federal Government is consciously creating new ports, deep seaports and green field developments. Once this is actualised in the nearest future, Nigeria will become the centre of shipping in the whole of the West African sub region.

The Shippers Council was appointed an economic regulator to stimulate competition and efficiency. We have done this by auditing the terminals to determine their efficiency. It is very important that Nigerian ports excel in this competition. That way, we will have more cargoes and more revenue for the government, the ports authority, terminal operators, freight forwarders and shipping companies. We are also closely monitoring the efficiency; we have our Key Performance Indicators.

Are you saying Nigerian shippers who divert their goods to the Cotonou Port don’t have a good reason for doing so?

No, they don’t, except of course for some sinister motives, because eventually the cargo is bound for Nigeria. Sometimes it can be the quality of the goods; the Standards Organisation of Nigeria will not allow you to bring in substandard goods through the Nigerian ports. The Nigeria Customs Service is a dynamic institution, which has introduced e-commerce; they are leading. The Nigerian Ports Authority has also been active, automating payments and the electronic manifest of ships. Everything is going towards automation.

When we have that combination, it means things will be done faster and in a more transparent manner, and more in line with international shipping. We want what obtains in the Port of Antwerp to be obtainable in Tincan. We want the process and the procedures to be the same so that the cost and the ease of doing business in Nigeria will be at par with international standard.

Stakeholders have yet to find a lasting solution to the traffic congestion at Apapa. What is the council doing about this?

Where we have a problem is actually the access to the ports. A modern port should be accessible not by road but also by rail and possibly by the inland waterways. Unfortunately, the rail access to the Apapa ports is not adequate, otherwise we will not be having this perennial problem of congestion. In any case, our ports have become city ports. We are working with a task force set up to make sure that there are palliative measures to make the roads motorable. In the long run, we are going to have a port that is not supposed to be a dwelling place for cargo.

It is a transit area where cargoes are evacuated as soon as they arrive. Unfortunately, this isn’t the case in Nigeria now but there are so many ways of solving it. Not only by multi-nodal access to the ports, but also by using other ports in Eastern Nigeria, or using the Inland Container Depots so that goods are taken there for examination, payment of Customs duties and so on.

There has been a campaign of recent to ensure that haulage trucks conform to some set standards. What do you think about the development?

The trucks being used to convey cargoes in the country are rickety; they are not up to standard. They break down here and there; they constitute a clog in the free movement of cargoes. This is no longer acceptable. That is why the Nigerian Shippers Council is advocating for changes in all aspects of port operations and of the port economy. What we are saying is that we should discourage the owner-operator system of trucking; most of them own just one dilapidated 20-year old truck, which they put on the road; there must be some sanity. There must be trucking companies with a minimum number of trucks, and these trucks must be certified to be able to transport cargoes. They must have a tracking system; the companies must have an office and computers because trucking is a serious business. It is a chain in the logistics business; it is an extremely vital link to the success of port operations.

We are presently talking with the National Automotive Council and we will soon have meetings with them. We have also discussed with the associations of truckers, NATO, RTEAN and many others, with the view to having them all registered. Secondly, they have to re-fleet because their trucks are ancient and they are simply incapable of doing what they are supposed to do. If we have changes in port operations and the turnaround time is shorter, then evacuation must be at the same pace. It is multifaceted, you have to touch everything.

Terminal operators at ports in the Western part of the country recently expressed displeasure over the provisions of the Oil and Gas Export Free Zone Act. Do you think their fears are justified?

We have been approached with this idea of exclusive oil and gas cargo for certain ports or terminals. We have spoken about that in many meetings. In the last meeting we had with the terminal operators a week ago, the issue came up. Our position on this is that there should never be monopoly. We should never encourage private monopoly after we have done away with public monopoly. The principle guiding port operations is the port concession agreement and if we have a doubt, it is a reference point. We should always go by that.

The usage of any port by a shipper should be a matter of choice; the receiver will always nominate the port of choice he thinks is better equipped to handle his cargo. He will have been possibly convinced by the proximity, efficiency or charges of his port of choice. What the Shippers Council will never allow is forced usage of certain ports. The shipper has a right to nominate the port of destination and origin.

What has been the greatest challenge for the NSC since it became an economic regulator?

The greatest challenge was acceptance by the stakeholders. People usually don’t like regulators. We had extensive consultation with all the players in the industry, the private sector and the government. Because of our consultation and sensitisation, I think there is now a general acceptance of the position of the Shippers Council as an economic regulator. The other challenges are internal. While we are dealing with the stakeholders, internally we had to make some accommodation or adaptation of our internal structure.

On our capacity to regulate, we had to get that structure necessary for regulation. The capacity of our staff members had to be strengthened. We are dealing with two issues; our external relations and our internal adjustment. I am happy to say that together with some institutions like the Bureau of Public Enterprises, we have been able to achieve both. We have been recognised and acknowledged as the regulator, respected and accepted as such by the generality of the stakeholders.

We have had collaborations with them. I have been to all the stakeholders, trying to educate them about our functions. Internally also, with the assistance of our board of directors, we have been able to restructure the organogram of the council to enable it carry out its regulatory activities.

We have embarked on concerted efforts for capacity building and we have had courses for regulations on a regular basis.

 

[Punch]