Ports: Counting the Gains of Economic Regulation
After about 16 months of the appointment of the ports economic regulator by the Federal Government, stakeholders say despite the challenges, there has been a lot of positive changes for the industry as far as trade facilitation is concerned, writes Franci
For the Nigerian Shippers’ Council (NSC) as the ports economic regulator, the past one year has been very eventful. It has been a period of national assignment to introduce international best practices in the nation’s ports industry. Appointed in December 2013, six years after the port reform exercise, the Council has been involved in a very difficult assignment of trying to bring about changes that will lead to increased trade facilitation in the nation’s ports. Many believe it is not an easy task because of the interests that would be affected.
Before the appointment of the regulator, both consumers and providers of shipping services were having issues on shipping charges. While the consumers of shipping services were aggrieved about some of the charges, the providers of shipping services defended them. As an umpire, the ports regulator inherited this problem and had moved in swiftly to settle the matter. This led to the reduction of some shipping charges, a development that equally led to a fierce legal tussle between the NSC and the service providers. The case is currently before the Court of Appeal. Gains of Regulation Apart from the legal tussle between the regulator and service providers on some of the port charges, which is left for the Appeal Court to determine, life goes on, as a lot of gains has been recorded following the appointment of economic regulator for the nation’s ports. Stakeholders, who spoke to this writer said there has been a lot of difference in the way of doing business at the ports when compared with the situation before. A freight forwarder, Mr Simon Ede, said the presence of the ports regulator has helped to protect the importers and their customs brokers in many ways. Ede explained that many service providers have been cautious in their dealings with consumers of shipping services than before. “The presence of the regulator gives importers and freight forwarders confidence that they are safe in doing business at the ports. It means they have an agency of government to report to when they have an issue with the providers of shipping services. Before this was not the so, there was nobody they could take their matter to.”
He said many importers and freight forwarders have had issues which they took to the regulator that were settled amicably between all the parties. In the same manner, the ports regulation has now afforded both the terminal operators and the shipping companies an opportunity on where to take their grievances to when they are not happy with their landlord, the Nigerian Ports Authority (NPA). In one instance, the economic regulator had intervened last year when the NPA wanted to increase its tariff against the terminal operators. The NPA had written a letter to the terminal operators introducing the charges but had to withdraw it when the economic regulator took up the matter. New Ports Platform One of the gains of ports economic regulation is the current efforts in which every agency of government in the ports, including other stakeholders are encouraged to be in one platform as part of the efforts to achieve efficiency in the ports. This is an agenda that the regulator has encouraged to facilitate trade. It is one form of achieving fast clearing of goods at the ports as well as transparency among all the stakeholders. It is a new platform for everyone to integrate and the Council according to the Executive Secretary, Barrister Hassan Bello, is working with the Central Bank of Nigeria, Nigeria Customs Service (NCS) so that every payment is reflected in it. The platform will create a port community system involving every player, what he does, timing of activity and cost for such activity.
It is a command and control centre, which according to him, creates a nexus between all existing systems in the industry. It is a means of integration. Bello further explains that what the Council wants is to make it easier for all stakeholders to benefit from what the Council is doing. According to him, the platform is for agents, inspection stations or ship inspection, shipping companies, real infrastructure operators within the ports, ports authority, maritime administrators, for customs, terminal operators , for road haulers, exporters and transporters. Bello said the objective is to establish a framework where the competitiveness of the industry will be enhanced beyond its neighbouring ports of Cotonou, Ghana, Cameroun, among others. It is to improve safety, security, integration of an intelligent processing of data from all stakeholders and other information. Another objective, he added, is that it is a better way of tracking of dangerous goods and risk mitigation. The measure will equally help in harmonising and simplifying administrative and clearance procedures. More Revenue/Cost of Doing Business The gains of ports economic regulation have positively affected all stakeholders from every indication with improved revenue generation and profitability. This is notwithstanding the negative effect of the depreciating value of Naira to the Dollar that hit every stakeholder, including importers and terminal operators. During a review of the performance of the Council, Bello explained that the effect of ports regulation has guaranteed return on the investment and increased profitability for the terminal operators. He added that other gains were: “Improved revenue generation, improved infrastructure development, creation of efficient market, reduction of cost of doing business, improvement of the nation’s Global Competitive Index and consequent attraction of Foreign Direct Investment (FDI) for those in the transport and logistics chain”. On the part of the shipping companies, he said there have also been “improved delivery of marine and terminal handling services that led to reduced turnaround time of vessel, reduced cost of vessel operations”.
On how the Customs Service has benefitted from this, he said there has been positive achievement due to customs confidence, transparency, efficiency and effectiveness and consequent improvement in image.
Among other achievements were strengthening of complaint and arbitration mechanisms, prompt issuance of ship sailing certificate and reduction in demurrage accumulation against shipping companies. For the NPA, there has been enthronement of clearer Standard Operating Procedure (SOP) derived from international laws and practices, Bello said. Other benefits, according to him, include transparency, efficiency and effectiveness and improvement in image, revenue generation, competitive advantage in the sub-region, strengthening of complaint and arbitration mechanism. On how the freight forwarders benefitted from the exercise, Bello said “harmonisation of clearing processes and procedures and the consequent reduction in cost and time of cargo clearing, reduction of cargo duel time, strengthening of complaint and arbitration mechanisms”, have been very positive to both importers and for the customs brokers. He also added that predictability in processes and procedures, assurance of level playing ground, and availability of common user information service have been made possible in the system by the regulator. Importers are particularly happy that the regulator is able to handle their complaints positively without which they would have lost millions of Naira worth of investments.