Nigeria’s effort to develop inland waterways through PPP

Caption: L-R: Dabney Shall-Holma, chairperson, Sealink Implementation Committee; Olorunnimbe Mamora, National Inland Waterways Authority (NIWA); and Abba Bello, managing director, Nigeria Export-Import Bank (NEXIM) at the official tripartite MOU signing ceremony on Inland Waterways partnership between NIWA, NEXIM and Sealink Promotional Co. Ltd.

Nigeria has a vast outlay of inland waterways that have been largely neglected, underdeveloped and underfunded by respective tiers of government. A new memorandum of understanding (MOU) is attracting private sector participation. STEPHEN ONYEKWELU submits that this new push has potential to drive the integration of ECOWAS markets.

The National Inland Waterways Authority (NIWA) recently said Nigeria has about 3000 kilometres (km) of navigable waterways from Nigeria-Niger and Nigeria-Cameroon borders to the Atlantic Ocean out of a potential 10, 000km that can be developed and made navigable.

The Nigerian Fleet Implementation Committee (NFIC) has stated that the maritime industry in Nigeria constitutes a very critical sector of the Nigerian economy but this has not been fully explored. “In spite of being a maritime nation, Nigeria has not been able to reap immense economic benefits of being a littoral state nor has the country been able to harness its huge inland waterway resources” Hassan Bello, chairman of NFIC said.

Over the years, there have been calls for the removal of wrecks on the inland waterways which contributes to mishaps on the waterways. But nothing was done. As a result, many Nigerians have lost their lives and had families traumatised. This is for passenger traffic. Cargo traffic has been grossly underdeveloped.

In late October 2018, Olorunnimbe Mamora, a medical doctor and the boss at NIWA narrowly escaped death on Lagos inland waterways when a floating log of wood hit the boat carrying him and his entourage when he went to inspect the Lagos facilities of the agency. Meanwhile, the fastest and shortest path from Apapa to CMS, 10 minutes, is by water. And many Lagosians use the ferry from Ikorodu terminal to CMS, daily.

It is not just wrecks, dirt, hyacinths and accidents that are prevalent on the inland waterways; there are also issues of insecurity, which have become a daily occurrence on the waterways.

Mid November 2018, the NIWA Port Manager for the Onitsha River port, Baba Spencer highlighted the issue of security as the greatest challenge of the port facility.

To change this course of events, public-private-partnerships are needed. The tripartite memorandum of understanding (MOU) is designed to promote bulk cargo movement and facilitate inland waterways operation for hinterland, transit and coastal trade. The MOU aims at establishing specific roles of all parties in this regard.

Data obtained from NIWA show that Nigeria has a large resource base of waterways spanning 10,000 kilometres; about 3,800 kilometres is navigable seasonally. Twenty eight of the nation’s 36 States can be accessed through water. Nigeria can also link five of its neighbouring countries – Benin Republic (Porto Novo), Equatorial Guinea, Cameroon, Chad and Niger Republic by water.

The bridging of maritime infrastructure gap is expected to significantly enhance exports of bulk solid minerals, thereby enhancing the gross domestic product (GDP) contribution of both shipping and solid minerals sectors from current levels of about 0.20 percent

Areas of infrastructural intervention requirements include dredging to remove silt and other impediments, river ports and jetties, installation and maintenance of navigational aids such as dams, dykes and river training works including construction of dams, dykes and groins to ensure the achievement of highest level of efficiency and seamless operations.

Hence, the MOU among the National Inland Waterways Authority (NIWA), the Nigeria Export-Import Bank (NEXIM) and the Sealink Consortium designed to harness Africa’s most populous nation’s inland waterways in a way that facilitates regional integration among the Economic Community of West African States (ECOWAS).

In value terms, it is projected that the signing of this Memorandum of Understanding would promote waterway operations for hinterland, transit and coastal trade, especially for bulk cargo. It is noteworthy to highlight that it is projected that this development would enhance non-oil exports annual revenue receipts to between US$500 million and US$1.2 billion annually on bulk solid minerals exports.

Sealink is bringing to the table its competence at bridging maritime transport infrastructure gap amongst ECOWAS and Central African Economic and Monetary Community (CEMAC) regions, as well as promoting inland waterways operations and facilitating regional integration and bulk cargo trade.

As a Trade Policy Bank, NEXIM strategic interest and partnership in the Regional Sealink Project is to promote and diversify exports as well as enhance trade connectivity in line with government’s objective to diversify the economy.

For too long Nigeria’s economy has been dependent on oil and its derivatives. Efforts to diversify are on-going and the signing of this tripartite MOU may be an additional one in that regard.

The Rivers Niger and Benue constitute the major channels for inland navigation which include but not limited to the Cross River, Port Novo- Badagry-Lagos waterways, Lekki and Lagos Lagoons, Ogun-Ondo waterways, Benin River, Escravos channel, Nun River, Imo River, Orashi River, Ethiope River Ugwuta Lake, Lake Chad and the numerous creeks in the Niger delta.

“Efforts were made to dredge our Inland Waterways; such efforts had not been far reaching enough as other necessary pieces of infrastructure that will open up the vast Inland Waterways have been neglected” Mamora explained.

Mamora reiterated that Nigeria’s Inland Waterways system is underfunded hence the country is denied the benefits of the potentials offered unlike a number of developed nations that have utilised their Inland Waterways as the mainstay for their industrialisation and economic prowess.

This is why the execution of MOU among NIWA, NEXIM and Sealink has been framed as a historic maritime logistics event. It is a novel public-private partnership framework, which is primarily designed to attract private sector investments under government agencies facilitative support at no cost to government.

“The MOU partnership is intended to bridge infrastructure gap that will promote and enhance trade connectivity as well as spur Nigeria’s regional and global trade competitiveness” Abba Bello, managing director, Nigerian Export–Import Bank said.

The public-private-partnership is a significant milestone in an on-going collaboration with all key national and regional maritime stakeholders, and would be catalytic to the realisation of one of the priority projects under the ECOWAS Community Development Programmes.

Trade and market integration are also at the heart of ECOWAS’ aims and objectives. Article (3) of the Revised Treaty of Economic Community of West African States stipulates the removal of trade barriers and harmonisation of trade policies for the establishment of a Free Trade Area, a Customs Union, a Common Market and an eventual culmination in to a Monetary and Economic Union in West Africa.

The Sealink is being officially promoted by NEXIM, Federation of West African Chamber of Commerce and Industry (FEWACCI) and Transimex S.A. Cameroun, an integrated logistics company, through a Special Purpose Vehicle (SPV), the Sealink Promotional Company Ltd (SPCL) with nominal promotional shareholding and sponsorship framework.

“It is significant that as we are all collaborating and strengthening cooperation, especially at this time when African Union is finalising arrangement for a continental free trade area to foster integration, investment and trade, the time has come for Nigeria to be bullish in its non-oil export trade to diversify the economy” Dabney Shall-Holma, chairperson, Sealink Implementation Committee affirmed.

NEXIM’s decision to be one of the three signatories to the MOU was largely informed by the huge logistics challenges and non-tariff measures along the ECOWAS trade corridor. This coupled with the desire to both enhance Nigeria’s export to ECOWAS that has muted over the years at about 15 percent and to encourage formal trade.

The effective implementation of the Sealink project and the safe utilisation of the inland waterways would hopefully bridge logistics gaps that will attract and facilitate investment flows the two sectors. This will contribute to the realisation of one of the broad strategic objectives of Economic Recovery and Growth Plan, which is building a globally competitive economy. To this end, it will also contribute to improving Nigeria’s current World Bank ease of doing business and Logistics Performance Index (LPI) rankings.

However, the management of NIWA have been quite receptive to Sealink’s inland waterway operations vision and are also responsive by codifying this relationship into an MOU for the sake of transparency for general public good.

“NEXIM’s developmental, facilitative and supportive roles in the Sealink Project are exemplary and typical of the roles of Export Credit Agencies all over the world, who not only provide export finance but also work to mitigate challenges that impact sustainable trade” Bello quipped.

The longest rivers in Nigeria are the Niger River and its tributary and the Benue River. But the most used, especially by larger powered boats and for commerce, are in the Niger Delta and all along the coast from Lagos Lagoon to Cross River.

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