CEO INTERVIEW ‘We’re winning cargoes from neighbouring countries but ...’
Don’t you think there will be issues still operating the dry ports with the poor rail system in Nigeria?
All the five distribution centres are located closely to rail lines. The rail line is important to the ports and we made sure all the ports are located to the narrow gauge system which is a freight rail. In Kaduna now, many coaches are bringing in goods from Lagos and they are taking it to Lagos before the bridge around Niger State collapsed. What we are trying to do is getting international recognition for this port. We are doing the rail right inside the port which is about three to four kilometres. We are talking with the shippers on working on their liabilities to cover the destination to the ports. There must also be nexus between agencies and the dry ports. The Nigeria Customs is very much needed, same with NPA and the shipping companies. There are problems but not as futuristic as it is and we hope we will tackle them.
Is your duty not conflicting with that of NPA which regulates the ports?
NPA is the landlord of the ports; the Shippers Council is multi sectoral. It is not only the sea-road, rail and other modes of transport. The definition of ports in the NPA Act is about sea as it talked about some metres from the sea. There is a need for a connector and moderator in modern times and that is what NSC is doing, from one mode of transportation to another. Goods come by sea, taken by rail and then by road, so a coordinator is needed and that is what the council does.
Do you have synergy with other agencies around the ports?
We have synergy with them. For instance, we worked with the NPA and Customs to convince Niger Republic to come to our ports. We brought them here and took them back, now we are having imports from that country. Our Standard Operating Procedure was also done by all the agencies, including NPA, ICPC, other port users and agencies. It is key for us to work together and when we do that, we see a lot of progress.
For the Truck Transit Parks, are there strategies to enforce their usage on truck owners unlike the trailer parks that are failing?
Yes. We have two concepts; ours is a transit park. For the trailer park, it is a mass land were you go to park your trailer, but this is a logistics centre and enforcement is extremely important because we need to guarantee the investment of those who are going to venture into this. We have a memorandum of understanding with the Federal Road Safety Corps (FRSC) and the Nigeria Police for enforcement to ensure that trailers cannot park on the shoulders of the road. Unless they park on our transit parks, there will be penalties to it. Even more, we are working with the road transport owners, road transport workers and other stakeholders who we are engaging to ensure it works. It is very attractive and they are the ones to tell their drivers that if you park outside the transit, they may be penalised.
Some investors felt frustrated in the past because of policy inconsistencies for the dry ports. What has happened in recent times?
The problem was that some of them wanted the ports to be declared as ports of origin and destination even when they are virgin lands and we told them that port means a defined area with certain facilities. We could not declare them so because it will be ridiculous and it is subject to inspection by international bodies. Maybe they wanted that to gain access to finance but we said we are not ready for that. Only few of them were ready and we told them if they had gone to about 65 per cent construction, we could declare that. It is a thing of the past now because the regulatory framework is clear now and we have even signed a new agreement on this.
The national shipping line that you are advocating, how long will it take to work?
It is not a national shipping line but a national carrier, and distinction must be made because the national shipping line was that of government but it went underground. What we are doing is to ensure Nigerians have control of our transportation so that we can decide the cost. Right now, all the cargoes are carried by international vessels even when Nigeria has vessels that are trading in faraway places like America. So we said the private sector should lead, but government is the enabler and a catalyst. That is why Shippers Council was appointed the chairman of the committee. Imagine the impact it will have on the freight that Nigerians will have. We have a lot of skilled engineers and other workers that are not doing anything. We have gone far on this and a transaction advisor is also being appointed to stimulate interest. We also need to have technical partners to work with, and it is 40 per cent ownership for foreigners and 60 per cent for Nigerians. With this we will start seeing Nigerians owning shares in ship.
The reason why some Nigerians have not keyed into it now is because it is a heavy investment and then the recession has affected it.
What is the funding arrangement for the National Shippers Council?
We are a small sized agency; we cannot compare ourselves with our richer cousins. We are funded by the Port Development Levy which is paid by people who operate at the ports. We are not funded by the government through an allocation or from the federation account. It is generated by the shipper’s activity. They pay a certain percentage to a pool which is being paid to NPA, NSC, NEPC and some others. NSC takes two per cent of that.
However, we are supposed to be funded by the Freight Stabilisation Fee, which is one per cent of every import and export; it is a lot of money if we even consider petroleum products; that is why we have NNPC on our board. Over the years, we have tried to force this to work but it is not.
What would you say about the many charges being imposed by agencies at the ports?
We cannot justify illegal charges and we are working to make sure these things are not done. The idea is to bring in automation to the port system when no one will need to be at the ports. By the time we introduce the Cargo Tracking Note, there will be no need to verify whether the goods are standard or not because it will be known clearly. It is one transport instrument that will solve a lot of problems. 80 per cent of goods that are imported are not well declared and some of them are concealed or hidden. With the Advance Cargo Information System, nothing will be imported into Nigeria without being declared. The advantage is that the information is given to relevant authority even before the ships arrive so that the risk assessment by Customs is done, and you can even pay your duty early. It will boost the revenue collection of Customs. We also discussed with the Customs on multiple checks so that when the goods are cleared form the ports they need not to be checked again, this has reduced tremendously. With automation everything will be illuminated and that is why you don’t have to arrest anybody for corruption but prevent corruption with a system so that nobody will be able to do it.