Amiwero: Nigerian Ports Were Concessioned Without Regulation

Lucky Amiwero is the National President of the National Council of Managing Directors of Licensed Customs Agents. He explained to Eromosele Abiodun on why the port concession policy needs to be backed by a legal and regulatory framework, why shipping companies are deserting Nigerian ports for neighbouring ports, and the impact of the foreign exchange crisis on the maritime sector. Excerpts:

The economy in the last one year since the administration of Mohammed Buhari commenced has been very poor, how has this affected the maritime sector?

Our sector has been seriously affected. Before I continue, I like to let you know that I have served in 167 government committees and nine of them is presidential committees, one happens to be Nigeria Custom Service (NCS) reform committee. So, I am not talking from the position of ignorance. The last committee I served was a committee was inaugurated by the budget office on the activities of the economy, to look at import clearance procedure and fiscal policy measures implementation. We did not conclude our assignment and our committee just left without concluding the assignment. This government has been faced with serious economic issues since its commencement.

You would understand that Nigerian has an import dependent economy. We are involved in export but not much because we have not encouraged it. Export can come in when you encourage them; we have to look at it. The problem of our industry is that we are import independent. The foreign exchange crisis and the 41 items excluded from access to foreign exchange by the Central Bank of Nigeria (CBN) has not helped matters. They have not come out with a policy that is directed at fixing the problem, they seem to be confused as to what should be imported or not. That is what happens all-over the world, there must be policy direction. Policy direction is what we need so that people will know what to do. The government seems to be busy with ghost workers, spending by the last administration, all these are just accounting principle. Economic management is different, this has to do with how you generate employment, how we use what we have to create wealth and stabilize the system.

Amidst the economic crisis the government just appointed a new managing director for the Nigerian Ports Authority (NPA). What message do you have for the new MD?

The NPA is limited to the ports and they are just service providers. When you talk about Nigerian ports, they were involved in three components, regulation, port operations and port landlord. When the government concessioned the port, it was done on the basis of the landlord port-model, even though the port was conscessioned without a law. So we are running a port that has no legal structure in terms of what we supposed to have done. With the concession, the port operation was given to the terminal operators and the port regulation was given to the Nigerian Shippers Council (NSC) and the landlord port which is the marine sector was given to the NPA. That is how it is designed.

And for now, the Nigerian port is supposed to be a service provider by looking at dredging, channels, providing access to the ports and making the port beneficial by promoting the port so that it can be preferred properties within the sub-region. Nigerian ports have been docile for almost closed to 12 years. The Nigerian ports was just seen as a docile port where people go there to sit, go out and come back. Now, you have a young woman who doesn’t understand port system much. Yes, she has worked with the Bureau of Public Enterprises (BPE), but the port now is not an operational port.

It is a port that is supposed to perform service, the port is supposed to perform the services that will attract bigger ships into this country because we are losing out in terms of that. Countries like Togo, Côte d’Ivoire, Ghana, Benin Republic have taken over our cargo. So, the Nigerian port should have been more concerned about how dowe retrieve our cargo. Many of these cargo that are going there, are going there because we don’t have the kind of vessel that will come in to this country and coming in effectively and berth.

Today, you have vessels of 20, 000 TEOs, (Twenty feeter equivalent). You have 14, 000 to 20, 000 TEOs and you have them in all these multinational, joint venture career companies. So you notice that when it comes to transit, we have lost it. We lost it to Ghana and Cote d’Ivoire. When it comes to transshipment we are losing it to Togo, Benin Republic and Ghana because most of these things are coming in and they reside there on the basis of the port facility and the process and procedure which is efficient. So Nigeria ports, for instance, are no more involved in cargo, so they must know that. They are now not the port regulator, so they must know that. The Nigeria port for instance is involved in marine concern, that’s for dredging, channeling and to make sure they have good access routes to the port in line with Section 32a of the Ports Act of 1999.

It’s been 10 years since the ports concession, what have been the gains of the port concession policy?

I cannot tell you about the gains because when the port was concession there were two elements and I was involved in one of the committees. Destination inspection was actually what was mooted and the port reform was there too. So, there were two reforms that were going on and this two reforms actually came together. So you find out that the port itself, things like the electronic system to midwife the port system, was part of the reforms because what we have those days was that every consignment must be positioned for customs examination and all what we are doing in the port was manual.

So, there were two programmes that was matched together in 2006 by the Destination Inspection Committee and the Port reform. And most of them actually came in simultaneously which actually brought the port to this level. So, what is really pushing the port to this level is the electronic process. So we have a port where we do not have a port regulator. The port regulator is supposed to have midwifed the port.

In port process, regulation is key in the concession because it’s one thing you must do before you regulate the port. But Nigeria did not do that, we concession the port without regulation. So we cannot tell you what we have benefitted. What we have today is a Nigeria port under Section 7c of the Port Act of 1999. It said this port is for Nigerians and it’s for Nigerians to be involved, have involvement in all the facets of the port activities.

A lot of people were dropped and concessions were actually carried out without port regulation. When you don’t act on the regulation, you cannot have a better monitoring organisation that can be able to tell you what is happening today in the port because you will be having port increase of charges. We have one of the highest charges within the sub-region, and those are the things the port regulator is supposed to have intervened.

Are you saying there has been no gain at all in the policy?
I cannot say. Like I said, there are two ports reforms. One is to concession the port and one is to make sure the process and procedure of the port is automated, which is was done. What we had before was about 3.7 but when the port was concession we had about 3.0. Then you have the DTI, the scanners which actually have to go through selective principle of examination, which remove some of the process, pressure which if he would want to bring those system to the port today, the port will collapse. When NPA was there, they were doing manual, 100 per cent examination, using all their plants and it actually killed all their plants.

I was in involved in the plans to bring about the changes and the changes actually brought 3.1 and singular 3.0, the DTI, scanners, and then brought in risk assessment whereby the examinations were done on selective principles. So you find out that the action of the port, the tale of Cargo becomes reduce drastically because you have four kind of examination. You have the ones that go to scanners, you have four principles of examination, you have the green lane, you can release before your examination; you have blue lane, which sent to the importer’s warehouse; the yellow lane, which goes to scanner, and then you have the red lane, which goes to 100 per cent. So, all these lanes were going to 100 per cent before. They are selected on that basis and released and these releases make the port more efficient.

I can say on that because that is what has happened that brought about efficiency in the port system. There might have been one or two from my own end. Actually no agency is monitoring it. It is only the agent that monitors it that can see it. We, as a people who are called stakeholders, I was involved in the Destination Inspection Committee and we introduced those system that brought about the changes. Ten years down the line it has been not too rosy and we expect it because four elements actually were concede to the port operators. They were infrastructure, tariff, the traffic and labour because almost 10,000 NPA labour were sacked. We expect a turnaround in the whole system because the essence of concessioning the port is to reduced cost. So we have to look at “have we reduced cost over the 10 years?.” To do so you have to compare happenings within the sub-region within that time, the post-concession and the pre-concession period. This can be analysed and we can see how these things are.

There are issues of post concession crisis, can you highlight some of the crisis and how the government or the new NPA management can resolve the crisis?

Well, it is not just about the NPA coming into the port concession crisis, we have a lot of confusion there. We have too many agencies that are involved in regulation. Some of them are paper regulation, some are legal regulation, some of them are regulations that government must sit back and try to see how they can restructure the whole thing. One, we have the NSC that has been given port regulator; two, we have the Infrastructure Concession Regulatory Commission (ICRC) that is saddled with the responsibility of looking at the condition of the concession, taking the concession and looking at it and see how they comply with it. So the infrastructure regulatory commission actually looks at the concession. Then you have the BPE who actually midwifes the process of the concession, and then you have transport and then you have NPA.

All these agencies must come together and streamline the activities for effect administration, because for now, you cannot identify who is in charge of the whole thing. So, there is a crisis in who takes care, who regulate and who is in charge. These are some of the things that are critical. Even though you are going to have your national commission bill, you still have the concession infrastructure regulatory commission which is in charge of concession. We don’t know what those people are doing because after the initial 10 years some of these agencies or concessionaires agreement will expired. I think it’s not the Nigerian port that has the power to extend that, it is the concession intercession regulatory commission that have the powers to extend by looking at it, or maybe calling for stake holders inputs and see what they have done and look at the condition, according to their law because the law is very clear.

The Infrastructure Regulatory Commission of 2005 is very clear. So, I think these things must be looked into critically. NPA are the people who own the ports but unfortunately, there are legal issues that must be addressed to bring about harmony in terms of who controls what and who regulate what because we are having almost five of them that are there. We have the transport ministry, ICRC, NSC, BPE and NPA. You have five of these agencies and most of them are looking at the concession. So, we believe that government must look at it, come back and see how they can streamline it and locate these responsibilities to one of the agencies, either by law or by principles. There are crisis, in the sense that the NSC and some of the terminal operators are still in court over the issue of increase of charges in the port.

And there has been another increase, you know, it’s a legal issue. Well, we have a problem here and this problem is how to talk about the shipping line, actually that is not having the same design like the concessionaires. The concessionaires have bills to pay in terms of forklift, rent, and labour and all that. The shipping lines have nothing to do more than bring their containers. And they are charging almost the same thing the concessionaires are charging. We have a very serious issue here and we pray that government will look into it. There’s no body regulating the shipping company. The shipping company is just on their own without government agency regulating them. They have a kind of interface with the NSC but most of the time they don’t respect those MOUs. I was one of the signatories of the MOUs.

The shipping lines are just here, they are doing business and when there is an increase from the terminal operators, they increase their own. Most of the terminal are owns by the shipping line, so we have a lot of complex situation, crisis of the post concession era, which have not been addressed. The former NPA management could not resolve these issues. The managing director was not doing anything at all. That man just sat there and was doing nothing. He left, nobody can tell you what he has done over the years and we don’t know whether we still have the same person in the NPA managing director. We pray that it will not be that way. She is a young lady and I believe that she will be able to come out with policies that will bring us out of the difficulties we are facing in the ports today.

How would the Port Harbours Bill before the National Assembly transforms the maritime sector?

It has nothing to do with our sector much. It cannot transform the marine time sector. We have so many bills before the National Assembly from the sector. Our sector is more related to finance. The port and harbour is just a bill that is supposed to bring about new port act by repealing old one, look at what we are doing and try to see how we can work according to international best practice. But I have been in the Assembly, we have seen the Port and Harbour Bill. We believe that if the bill is to be passed and the National Transport Commission Bill is to be passed there is need for harmony within the Port and Harbour Bill, the Railway Bill and National Transport Commission Bill and the Inland Water ways Bill. This is because it’s a multi-sectoral regulatory arm. But if it is not done and the Port and Harbour Bill is passed it will be very difficult for you to pass the National Transport Commission Bill. And if the Transport Commission Bill is passed on its own that means the other bills will be passed with some elements of regulatory process in the bills in the laws which will be very difficult for the National Transport Commission to regulate those agencies. Like what is happening now, it looks like a railway bill is going on its own and if a railway bill is passed on its own, that means it’s no more being controlled by the National Transport Commission Bill.

And if the Port and Harbour Bill goes on its own, that means it is off and will not be acceptable. If it is multi-soctoral bill there will need for us to look at it holistically and see how these bills can be pass for the benefit of the country. These bills cannot be a political bill whereby I am passing it because I am the MD today. They are bills that are going to midwife and reshape the maritime industry for the betterment of the economy. Because we are losing out, we control almost 80 per cent of the cargoes within the sub region and we have lost up to 60 per cent of the cargoes to our neighboring countries. We have lost all our freight components to our neighboring countries and you found out that Nigerians are moving out to all these neighboring countries. They are the one doing the business there. What is the population of Cote d ‘Ivoire, they are not more than 40 million but their tonnage is higher than Nigeria and who is the owner of those goods there are Nigerians goods.

Togo, what is their population strength they are not more than Lagos and look at their tonnage. Go round and see what we are talking about, it not just that some civil servants sitting down in Lagos and start to tell you one thing or the other. Nigeria is losing out in a very serious way and this is very serious issues because the freight components which create employment are being diverted to other countries. Once a ship diverts, it goes with the freight components and you come back with the cargoes. The freight components are those charges that are supposed to be for Nigerians. For instance, if a cargo which is supposed to be for Lagos is diverted to Togo, the charges the shipping company is supposed to charge, the service the terminal operators is supposed to charge and the charges the licensed custom agent is supposed to charge and the transporters are now going to be charged there. And when these goods come in, they come in just like that and only pay import duty.

So, those components are what we call freight components because we paid you for it. So, Nigerians are entitled to their freight payment. That’s why in all over the world, freights are teamed with struggle because that freight is what generate employment. In our case, our freights are left alone for diversion and more than 60 per cent are out of this country. And these goods are still coming into this country perfectly. That is why you find out that our unemployment level is terribly high. You cannot continue to run a team without experts. Most of the people who are managing these areas are not experts. Most of them go to government and give them wrong information. Most of the information are not correct. Because when you go, you have to look at what is happening in Ghana, Togo, and Cameron and others. These are our competitors and for every increase you make here, they deduce their charges for them to attract our cargoes. So it is a very serious issue. It is not an issue of one just sitting down and someone who doesn’t understand just take over and that is the end of the whole thing.

I remember that in our last conversation, you talked about the four components and the three elements of post concession era, I want you to explain this to our readers.
The three components are regulation, port operation, and the landlord port model. Landlord take care of the marine, port operation is handled by the NPA, who are the landlord. The marine side includes the dredging, channels, brick waters and others are what the landlord port handles. The other one is cargoor port operations which is being handled by terminal operators that is why it is called port concession.

We also have the port regulation which has been assigned lately to the NSC. The elements are labour-that means you concede labour, concede traffic, concede tariff, and you concede infrastructure. When you concede these things to the people who have taken over, they are able to bring in their own labour or look at the labour pole and see how to design their own. They build infrastructures. So these four elements are conceded to the port operators. Then the port regulator is the one that regulate the economics interest in the port. Things like charges and all the rest, the dominant power of the port operators, the extreme dominant power and regulating the whole power to make sure that you don’t actually create another private monopoly and that is what is happening in the country today.

We have monopoly and it must be looked into critically. So these are the elements. We have the component and the elements. In some other countries in the world, they join the marine side and the port operations. But one of the clear examples we have is South Africa, they have an independent port regulator. The port operator of South Africa regulates the national port and the privatised organisations. What Nigeria is trying to look at from the draft bill they have sent to the assembly, is a multi-sectorial bill, which actually accommodate the National Transport Commission. They have the railways, port authority, the port and harbor bills and the island waterways. These three agencies are supposed to be regulated by the National Transport Commission bill, but what is happening is like they are pushing their bills individually. And once bill is passed individually with the regulatory component, it will be very difficult for the national transport commission to regulate these agencies.

You talked about Ghana, Togo taking away our transshipment and cargo, I want you to highlight some of the problems that make them prefer these countries to Nigeria aside the cost you talked about.

They go to Ghana for three reasons. One, if your drought and your port is not efficient, nobody will come and keep his ship here for three or five days. The take time of ship, which is now in line with the FAO Convention is clearly stated. The FAO convention talks about the maritime traffic and Nigeria is a signatory of the FAO convention. The FAO convention existed since 2008 and I was a member of the FAO Committee. Unfortunately it ceased to exist in 2008. Nigeria actually acceded to it. International Maritime Organisation (IMO) actually introduced the FAO to facilitate the stay of ship and the stay of cargo. It is just there in the ministry of transport.

And they don’t have experts it is not a question of bringing in the committees. You have to bring experts who understand international procedures. For now, we have a lot of civil servants, who don’t understand what they are doing in the port industry, people who always tell government lies and make government do the wrong things. We have these problem because our procedures are not in line with international best practice, every agencies in the port wants to go back to the port. The former Coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala removed these agencies from the port.

Some of these agencies are trying to come back to the port and their interest of coming is just to come and collect money in the port, not that they want to do their job. And one of the ministers was even campaigning always for them for come back to the port. And I asked them, where in this world do you see agencies loitering the port the way you do in this country? The problem is, in everywhere in the world what you have there is a platform you use as an interface to talk to yourselves.

And if you want anything, you can know what to do from that platform. We don’t need the physical presence of these agencies in the port. Today, we have a minister in this time talking about agencies in the port. Our country procedures are backward, our drought level is nothing to write home about. Why is Togo taking over our Cargo? It is because of efficiency.

What is happening in the Nigerian port, what is our draft level? They shouldn’t be political or rely on civil servant who will give you the information they want you want to hear. Rely on expert who can give you information, go around and see what our competitors are doing. Number three is that our system is expensive, our cost is expensive. When you bring goods into this country, it stays more and it’s more expensive.

When you bring it to a place like Ghana, you pay little, just the transshipment fee. So you find out that it is cheaper to get things out than to take them to the port. Many people will want to use other ports and maybe pay transport cost and come into the country and do their duties and that is all. Instead of coming down here and pay shipping company that is expensive, pay terminal charges that is also expensive and go through your procedures that you have to go through SON, NAFDAC and all the agencies that are coming here. You have a country where a minister is bringing all government agencies to the ports. Is that what is happening all over the world?