“How To Sustain Growth, Harness 70 % Of Cargo Traffic In West, Central Africa”

The
Chairman, Nigerian Ports Consultative Council (NPCC), Otunba Kunle
Folarin has challenged Nigerian stakeholders to take full advantage of
the nation’s port reforms.

 Speaking
in Lagos during the 3rd Annual Taiwo Afolabi Maritime Conference,
organized by students of the University of Lagos, Otunba Folarin
explained that though Nigeria controls 70 per cent of cargo traffic of
West and Central Africa, the lack of political-will has denied the
country the full gains and benefits.

  The annual conference is organized in honour of the Chief Executive and Vice Chairman of the Sifax Group, Dr Taiwo Afolabi.

 Speaking
on the Conference titled:“Port Costs and Ports Charges: A Recurring
Decimal under Port Reform Regime”, Otunba Folarin, explained that the
observed 70 percentage was only from the formal trade alone; hence the
take could certainly be bigger, if the nation’s trading activities is
considered alongside, the informal trade aspects of cargo movements, and
stressed that the traffic into Nigeria by latest data was over 5,307
ships per annum

 “The
potential is certainly bigger when we consider the capacity of cargo
traffic to Nigeria’s landlocked neighbours such as Niger Republic and
Chad.

“In real terms, over 85 per cent of all the goods and services that entered Nigeria came through the seaports.

“The current aggregate value exceeds $15 billion a year through normal imports.

“Nigeria also imports over two million tonnes of non-oil cargo yearly.

“It
is therefore, no doubt that the maritime sector’s performance is indeed
a major contributor to the economy and must be given attention when
discussing port costs and port charges.

“In
1970, following the end of civil war in Nigeria, government adopted a
policy that focused on the need to reconstruct the infrastructure and
superstructure of areas that were crucial to the commercial and
industrial sectors of the country.

“In
order to give effect to the implementation of the policy, importation
of building materials was done by about 600 vessels, most of which
arrived at the same time and created port congestion,” Folarin said.

He
recalled that the available port infrastructure at that time could not
handle more than 12 vessels at a time in Apapa Port Complex, which
resulted to long queue of ships waiting to berth.

result
of penalties put in place by the chartered parties, subsequent upon
which, towards cutting port cost and charges, thde Federal Government
initiated a Port reform policy in 1993 through the Federal Ministry of
Finance apparently to address the issue of rising costs in the delivery
of port services and several others.

However,
as encapsulated by NPCC boss, the port concessioning which started in
2006 by transferring operations of public sector activities to private
sector in a bid to improve productivity and achieve competiveness at the
ports is yet to achieve the desired result, largely as a result of the
absence of political-will needed to curb corruption, a menace which has
also turned endemic.

“Corruption
which is clearly endemic in the port must be challenged”, Folarin
posited, recommending that all documentation must be IT compliant,
alongside other “Golden Rules”, which must be strongly addressed to
achieve the desired change

“Political-will: All agreed processes and terms must be implemented without delay.

“Transparency must be entrenched in the concessioning and port reform process.

“Laws are made to promote port productivity and fair trade and competition and not to create monopolies.

“The
landlord model must  be administered in the very technical, ethical and
objective structure. Concessionaires obligations are not to replace the
responsibilities of the port authority, a modern productive
infrastructure in an element in a LANDLORD MODEL.

“Port
Reform must be total and all inclusive of the key players who provide
and consume port services including Nigerian Customs Services, statutory
agencies, freight and logistics operators, and law enforcement
agencies”, Otunba Folarin reasoned further

Meanwhile,  Dr.
Taiwo Afolabi, who was represented by his daughter, Mirian Afolabi had
in a keynote address, reminded stakeholders that the exchange rate of
Naira to dollar in 2006 when the port concession exercise began was
between N125 and N131.

“Many
obligations of terminal operators are expected to be discharged in
dollars and how much naira will be enough today to purchase the required
dollars,” he asked, adding that 12 years after the historical
concession, the value of naira had changed to about N360.

“By what percentage will the cost of service be adjusted upward to reflect the astronomical change in foreign exchange regime?

“So many questions seeking answers.

“These
are matters of immediate and practical concern to every Nigerian and
the regulatory authorities,” Afolabi said, commending the Maritime Forum
organizers, who were students of the Faculty of Law, University of
Lagos, for the steadfastness and diligence they demonstrated in
sustaining the yearly event.

 In
his opening remarks, a former Managing Director of the Nigerian Ports
Authority (NPA), Chief Adebayo Sarumi, said that government should not
run port operations, adding that it was indeed a business for the
private sector.

 Sarumi
said that port concessioning was a business venture that concerned both
the consumers and the producers of shipping services.

“Up
to the time I returned to NPA in 2003, NPA was using the tariffs that
we got from the Price Income and Productivity Board, approved in 1993.

“It
was so surprising to see that a tariff of 1993 was still being used in
2004. There is no way you could do that business gainfully.

“More worrisome was the quality of service NPA was giving. Low turnaround time of ships and shallow channels,” Sarumi said.

He, however, urged government to ensure that port infrastructure were in good shape.

Sarumi recalled that immediately the concession started, APM Terminals invested heavily on infrastructure and bought 11 cranes.

He said that the concession regime had increased cargo throughput (imports and exports)

 A
former President, Association of Nigerian Licensed Customs Agents
(ANLCA), Alhaji Olayiwola Shittu, said that there was need to look for
lasting solutions to the continuous problem of rising port costs.

Shittu
said that things could only change positively in the industry if all
the operators were ready to positively change their attitude.

Also
speaking, the Executive Director, SIFAX Group, retired Maj Henry
Ajetunmobi, said that terminal operators invested a lot of funds on
additional port infrastructure.

The
Director General, Nigerian Chamber of Shipping, Mrs Obiageli Obi, said
that there was need to bring down the high costs to encourage port
business.

A
Maritime Lawyer, Mr Victor Onyegbado, said that there was need to have
an econnomic regulator as well as the enactment of the Port and Harbour
Bill.

Another
Maritime Lawyer,Mr Ademola Afun, said that there was also need for
availability of the political will to enable all porr operators to work
harmoniously to improve operations and increase government revenue.