Over the years, lack of efficient transport infrastructure, especially for the movement of import and export cargoes to and from the port, has been a major factor threatening the efficiency of Nigerian ports. This is now obvious in the lingering traffic congestion on the roads leading to the nation’s major economic gateways, Apapa and Tin-Can Island ports. Hassan Bello, the executive secretary/CEO of the Nigerian Shippers’ Council (NSC), in this interview with AMAKA ANAGOR-EWUZIE, gives insight into the activities of the Council as the economic regulator of the port and Federal Ministry of Transportation (FMOT) to ensure transport efficiency in Nigeria. He also spoke on other issues. Excerpts:
Sir, let’s look at the maritime industry in 2018 and make projections into 2019?
In 2018, the general policy framework was set-up by the Federal Ministry of Transportation and is in three major forms. First, is the multimodal approach to transportation, which preaches against reliance on one mode of transportation, road. Road now carries about 90 percent of goods and passengers’ movement in the country.
There is a cautious effort to introduce other means of transportation for choice and reduction of cost of transportation. The cost of transport in Nigeria is high and it contributes to the inflationary trend businesses are experiencing. No country can develop without its manufacturing sector growing, and we have to reduce the cost of production by introducing and increasing the rail connectivity to the ports. This means that goods can be evacuated from the ports faster and it carries more volume than the road and it is also more reliable.
You would agree with me that there is a deliberate attempt by the government to open-up the rail system. In 2018, we had the Christianisation of the railway, and in 2019, the Lagos-Ibadan is already being test-run. There is rehabilitation of the Lagos-Ibadan-Kaduna-Kano rail corridor as well as the rehabilitation of the narrow gauge and extension of the rail line to every port in the country.
You can imagine the impact, which means that there would be ease on the road and we will not see this number of trailers that we see today on our roads. Our roads were built to carry certain weight but this is always being disregarded. That is why Nigerian roads do not last and are always under maintenance.
Another alternative to road transportation is the inland waterway. The managing director of the Nigerian Inland Waterways Authority (NIWA) said that the load of about 10 trailers can be conveniently carried by one barge. In terms of development, port infrastructure such as Baro River port has been commissioned but 2019 will be the year of realisation and materialisation of the policy framework.
Then, we have to build a modern infrastructure because there must be linkages, coordination and connections. The Baro River Port must be linked with Kaduna Inland Dry Port, which is called inland connectivity. The port is efficient if there is inland connectivity. If it is not there, it is the same problem all over. I think the Federal Ministry of Transportation and its agencies have become serious with the fact that we are going to have a multimodal approach to transportation in Nigeria.
The aim is to bring efficiency because we are in competition with our neighbouring countries. We will like Niger, Chad and northern Cameroun to take Nigeria as a hub. Nigeria will be the hub if we have a deep seaport in Lekki, which is another very fundamental thing that Nigeria is doing. You will see the impact in the economy in terms of growth, inclusiveness, employment creation and GDP contribution to growth. We have the Kaduna dry port, Jos dry port and Enugu Truck Transit Park.
With the rebuilding and opening of rail infrastructure in Nigeria, how do you think this will impact on the Inland Container Depot projects of the Nigerian Shippers Council?
Rail is cardinal to the success of dry port because the main aim of dry port is to reduce congestion in the seaport. Road alone cannot reduce the congestion and to reduce cost because the cost of transporting cargo from Apapa to Kaduna by truck is astronomical and is as much as over N800,000 because of the abnormal traffic situation, which is being addressed.
If we have the rail, it will reduce one quarter of the cost. There would be seamless connection from the seaport to the inland dry port because it is based on rail. Now, what we have is road transportation of cargo by truck. The Kaduna dry port would have been busier if we had effective rail transportation of cargo. We have been working with the Nigeria Railway Corporation (NRC) to provide us with wagons. They said they are going to provide 10 wagons and two locomotives because importers and exporters are complaining of the cost of using road.
According to import performance rating in Kaduna Port, activities went up one time but because of the crisis at the port it dropped. We want to boost our exports through the dry ports, which is the centre of export.
The Federal Government is also giving attention to the workability of the dry port. We have got Kaduna commissioned and we are working on Funtua and Jos. There is one coming up in Ibadan and if we complete that, it means transport efficiency will increase and there will be reduction in the cost of doing business. We have to make all these centres to become centres of ease of doing business. It is going to be automated so that electronically, we can control transport infrastructure using a modern way of doing business, different from what we have in the seaports because we will try to avoid all the problems in the seaports.
Nigerian seaports are attracting cargoes from other countries. So, we need to get the infrastructural connectivity right in order to enable Nigeria become the hub that we crave for.
Where are we now with the Truck Transit Park project of the Nigerian Shippers Council? Have investors started expressing interest?
Yes, if you remember there was a focus lab on which we had extreme interest on the Truck Transit Park. Our problem was that we have to handover the parks to investors free from any encumbrances. Land issue has been our problem but fortunately in Obolo-Afor, Enugu, the land issue has been resolved. In Lokoja, compensation for the land has not been paid by the government but we have just received a letter of approval from the Infrastructure Concession Regulatory Commission (ICRC) that we can go ahead and advertise for the request for qualification (RFQ) because we have appointed a transaction adviser. Very soon, we will advertise especially after elections.
What is the current status of National Transport Commission (NTC) Bill?
The National Transport Commission (NTC) Bill has been worked on by the National Assembly but the President sent it back on some three areas including the removal of safety issues because it is purely economic regulations and this has been weeded off. The President also said that the royalty to be paid to the commission as source of funds which was pegged at 10 percent should be reduced to 5 percent. The president also asked the National Assembly to look at the freight stabilisation fee, which was put at 3 percent to be reduced to 1 percent just like it is in the Nigerian Shippers Council Act, and this has been done.
We have to commend the National Assembly’s interest in the NTC, which would soon be transmuted to Mr President. Actually the comments made by the Minster of transportation and Mr President have been noted and what we have now is a clean bill. One thing people should know is that NTC is an industry bill and not a Shippers Council Bill. It is not that Nigerian Shippers Council that is going to transmute into NTC. No, Shippers Council will be the nucleus where other stakeholders like the NPA, Aviation, and Railway will come to constitute the National Transport Commission. We hope that the President will assent to the bill after he is satisfied with all the corrections that have been made.
Let’s look at the newly introduced registration fee for the service providers at the port? What is the registration about?
It is of much interest how people reacted to the newly introduced registration fee for the service providers at the port and it is good because Shippers Council must consult stakeholders before taking certain actions. Stakeholders have the right to make observations and nobody is quarrelling with the registration because it is good to have database and not to make it an all comers’ affair. Some people have started to register but the issue is the fee. Some said the fee is on the high side and I think that they are right; we have to look at them again. Shippers Council is the one to reduce the cost of doing business and not the one to increase the cost. Now, we have brought down the fees.
For instance, Seaport Terminal Operation, who are supposed to pay N1 million as registration fee are now going to pay N50,000; shippers will pay N1,000; cargo surveyors will pay N5,000; shippers association N5,000; stevedoring companies N5,000; warehousing N5,000; haulage companies to pay N5,000; freight forwarding and clearing agents N5,000; off dock terminals N10,000; cargo consolidators N10,000; inland container depot N25,000; shipping lines and agencies N50,000. This is the basic registration and it is a one-ff thing.
We have listened to the reactions of the people and we are going to the public with the new fee. We do not need much enforcement because Shippers Council is the one to offer service to these providers but if you are not registered with us, there will be sanction but I don’t think that it will be necessary.
What is the state of national fleet implementation committee? Has the committee been able to achieve its mandate?
The National Fleet Implementation Committee headed by the Nigerian Shippers Council has done a lot of work in 2018. We have realised that the operating atmosphere in Nigeria will not attract international and local investors that will enable us to have national fleet. This is because there are lots of laws, policies and cost that hinder investment. If you recall, the ministry of transportation signed a Memorandum of Understanding (MoU) with the PIL, a Singaporean shipping line. But when the PIL came and did analysis, they found out that the structure would not last, that what we need is to have a private sector-led national fleet.
To do that, we have to make it possible for the investment to be profitable and sustainable. We could have continued with PIL and bring in about two ships and say this is a national carrier and everybody will clap but no. We need something that is sustainable, meaning that we have to guarantee contracts. There are many taxes and incentives that we have to look into, which we are doing right now. We are working with the Federal Inland Revenue Service (FIRS), Ministry of Finance, Customs and many other agencies including NEXIM Bank. We are looking for reduction in 5 percent holiday from 3 percent Nigerian Maritime Administration and Safety (NIMASA) fees. We are looking at Free on Board (FoB) and Cost Insurance and Freight (CIS) issue to see that Nigerians will be able to participate in shipping business as well as the issue of Local Content. So, setting up a national fleet has not been an easy thing because it takes a lot of work for it to be done.
We need supporting industries like ship repair and ship building. If we don’t have that we will continue to tow ships to Singapore and Ghana for repair, then all the profits would be gone. We need our banks and insurance companies to participate in this. We need to look at the ship registration regime in NIMASA and make them electronic and modern.
Let’s look at shipping development in Nigeria generally. Is Nigeria where she is supposed to be, looking at the state of our indigenous shipping companies?
No, we are not, but we are going there because for the first time in so many years we have a target. The target is the consideration by Nigeria that shipping is a specialised business and a source of income or revenue for the country. It is also a source of transportation, wealth creation, employment, and helps in building modern infrastructure and contributes to the GDP. In very creative years to come, you will find that shipping and transportation will be able to finance the budget of this country.
It is also a way to diversify the economy because shipping has many aspects that cut across life. Shipping reflects the state of the economy because without good and efficient shipping and transportation infrastructure, the economy will not grow. Shipping and transportation drive the economy and we have started with building of multi-modal transport system. It is not just to build the infrastructure especially ports but they must be linked with one another.
What are the things to see in Nigerian Shippers Council in 2019?
We have set for ourselves an agenda for two to three years. First is to earn the trust of the people we are regulating and we have done that successfully. We have become a reference point in the issues of shipping and we advise the government. We are also investment coordinators by bringing investment into the country.
Internally, we have gone through a lot of re-organisation and we now have nine divisions for the sake of efficiency. We have our three years strategic plan which everybody has his or her KPI. We are undergoing so much training to become the economic agency in the shipping transportation.