Maritime sector needs to be cleaned up to attract investors who will drive National Carrier Project – Hassan Bello 

 

Barrister Hassan Bello, the indefatigable Executive Secretary of the Nigerian Shippers’ Council, is a very busy man. He sits atop an agency which not only works to protect the interests of Nigerian Shippers but also regulates the economic activities of the service providers in the industry. This multi-faceted assignment always makes the work schedule of Bello crowded and tight, thus making him to grant an interview a herculean task.

However, the duo of Prince ‘BIODUN SOYELE and FUNSO OLOJO of  nigeriamaritime360.com were not deterred by these challenges as they trailed the Shippers’ Council boss to his Abuja office where he was held up by national assignment.

 In this no-holds-barred interview,  Barrister Bello spoke on a wide range of issues such as the national carrier project,  the controversial Cargo Tracking Note, the ICD project, the efforts to rein in the recalcitrant service providers and other related issues. 

 A must read.

There have been a lot of issues that have been agitating the minds of stakeholders. First is the issue of national carrier. We know you are the chairman of the committee that is supposed to midwife its birth. But the  fear is that what happened  to Nigeria Airways when it was aborted could happen to it. What is the situation sir?

The Nigerian Airways issue is not aborted. It is just a matter of strategy but you need to know the background of this for you to appreciate. The national carrier is a private sector-led. Which means it is not government-led. What the government does is to provide enabling environment for it to prosper and buying ships with the national carrier is not about just going to buy ships, it much more than that.

We need to have national carrier because of the profound economic impact it will have on our economy. We have lost so much in terms of earnings of freight to foreign shipping companies. Nigerians don’t operate any ship at all that is on the part of the dry cargo. On the wet cargo, Nigerians don’t lift the crude and the Minister of Transportation, Rotimi Amaechi thought that this imbalance is very dangerous to the economy so he set up a committee with the Nigeria Shippers Council as chairman to lead the private sector and we started working with PIL which is a Singaporean shipping company.

We signed an MOU with it about three years back but the operating atmosphere of shipping in Nigeria is murky and not profitable because there are many obstacles which include lack of incentives, secondly lack of government infrastructure and thirdly, lack of government support, fourthly, unwillingness or inability of Nigeria private sector to support this very important enterprise.

The committee for the national fleet implementation had to go back to look at it closely. We have now retraced our steps. The national fleet is such an important venture that it has to be painstakingly done. We are talking about one or two-year project.

So what we have done now is because this government is very serious about the economy, we are able to approach and get the audience of the Vice-President and we address the Economic Management Team about the vision that the federal ministry of Transportation under Amaechi has and this was welcomed.

This project, if we get it right, it means much more earnings for freight.

Let me give you what we are losing. Each year, we lose about 9.1billion Dollars in freight to foreign ships. Between 2004 and 2017, Nigeria recorded total vessel traffic of 25,256 vessels with the total gross freight of $39billion and earning a paltry sum of $1 billion as levy for NIMASA.

So you could see the effect it will have. It means greater revenue for the government, employment for our people. It means setting up of associated industries, ship building, ship repairs, involvement of our financial institutions like banks and insurance, even the pride of having ships flying the Nigerian flags.

But then, there are lots of reforms to be made and the reforms include the flag administration and the ship registry of Nigeria will have to be reformed in line with international standard so that we can attract people to come and register ships in Nigeria.

We need a vessel repairs and vessel building so that we don’t tow our ships to Singapore or Ghana for repairs. That will be a drain on the business.

We need a reform of our nautical colleges, MAN Oron especially so that they will produce the best of cadets so that cadets produced will have sea time experience using Nigerian ships.

If we have investments and we are able to establish the fleets that means NIMASA would accord that fleet the status of national carrier. And if this is done, it means that they would have first priority in cargo; project cargos, Nigerian cargo, cargo belonging to federal, state and local government. This means they are on contract to lift cargo, the same thing we are doing with wet cargo.

NIMASA has led the Nigerian Shippers Council and other concerned organization in respect of lifting of our crude so there are times we have to change the policy or the law.

Instead of Free On Board (FOB) carriage of crude oil, we have CIF.

These are policies we are preaching so that we clean up the atmosphere so that the private sector will come and see that Nigeria is ready.

 Besides, there are certain incentives that are extremely necessary for shipping to survive or prosper in the country.  We are talking about Tax holidays, pioneering status, suspension of certain levy for a certain time three-four years to national carriers so that they would compete favourably with others and we have to make our atmosphere competitive because the foreign ships will always see the advantages over us.

So we have to clean up the system. With the economic team, we are now working with the Nigerian Investment Promotion Council and it has reacted positively and we are working day and night to sharpen out the policies on shipping especially on these incentives. We are working with Ministry of petroleum, Customs, Ministry of Finance, and Federal Inland Revenue services so that incentive will be given and clean up the place for investors to come in both foreign and local.

Besides that, we have met with Minister of Budget and Planning. This project is in line with the EPRG because we want the potential contribution of Nigerian fleets to the nation’s GDP. The Minister of Budget and planning was extremely receptive to the idea of national fleet and he is planning with the committee to have a focus lab; a place where we bring investors together internationally to look at the prospects, challenges and this is the next stage.

We are not spontaneous; we are being deliberate and systematic not to rush this. The goal is not to have a national fleet but to have a sustainable national fleet.

Sir, the scenario you are painting gives the impression that it is going to lead to an overhaul of the shipping sector. And this will involve re-jigging the laws and with the way the national assembly operates, this task might take two or three years.

If it takes two to three years, is it not worth it to take that long in order to have an enduring and sustainable national carrier that will stand the test of times?

The government initially put the cat before the horse by rushing to sign MOU with PIL and has to rush out when it saw the murky weather, so to what extent do you think you can surmount this gigantic challenge of making government to create enabling environment to attract foreign investors.?

We have a plan which the committee follows. Don’t forget that this committee is supported very strongly by NIMASA and NPA. They are very active members of the committee besides, the committee is also populated by the private sector. These three agencies are meticulous. We have the support of Minister of Transportation, Economic Management Team, Minister of budget and planning.

This week, we are going back to Minister for National Planning to plan for the focus lab on this. You are right there are policies and laws to be changed, we are also doing that. We have a very responsive National Assembly, there are some laws that will not stay long with our advocacy but we need the support of everybody. We are not in a rush. We don’t want a fleet that will come today and tomorrow it is gone.

What kills most projects in Nigeria is the human factor and the first national fleet would not be an exception. To what extent are you taking this into consideration so that this will be a sustaining one?

This is private sector-led. Nigeria National Shipping Line was government owned and run. That is fundamental. Shipping at this time cannot compete with international shipping because we all know  what government is and at that time it was a monopoly  but now we could have one or two national fleets so that there will be competition. This is going to be a radical departure from what we had in the past. Then it is going to be a partnership between foreign and Nigerian ship owners. It is owning and managing ships.

We look at what we can do   in our economy, the rail contract with Chinese and insist that all things that the Chinese are going to import either in rail, ICD’s, dry port must be carried by the national fleet. That will give it an edge because its upon the sea, we really have to protect. So you are seeing the multiplication on the economy. We build ship repairing yard, ship building yard you will see that it will create employment.

Honourable Amaechi always asks what is employment content of a project, so we are keeping to that. We hope we are going to call a larger press conference because we do not want to rush to press or anything unless we are ready to see the path eliminated to us by the extremely important response from the government and we are working towards that.

The national carrier is not what we should expect in the foreseeable future because it will take a lot of time to do the ground work, two-three years. But you want to lay the foundation.

We will lay the foundation; look at the change of policy, the challenges to the development. I won’t put it to time.

What is the extent of government involvement in this project?

We are trying to look at 40% for foreigners, 60% for indigenous. Government is just a facilitator. Shippers’ Council will call the meetings.

What is happening to Nigeria Transport Commission which we learnt the Nigeria shippers’ council will   transmute to make it strong to execute its functions Can you clear the air on what is happening in this commission?

Nigerian Shipper’s Council is not going to transmute into National Transport Commission because the Commission is a multi-modal regulatory authority for the regulation of Transport but Nigeria Shipper’s Council will form the nucleus of the NTC. It has been passed by the National Assembly and transmitted to the President for his assent who is now seeking comment and advice so that we will assist him in trying to assent to the bill. It is a multi-sectoral bill, a lot of sectors: rail, road, maritime.

 

On Cargo Tracking Note (CTN), it was shut down by stakeholders because of their misconception

(cuts in). Actually it was not shut down by stakeholders but there are stakeholders who were opposed to it; the organized private sector. We have had meetings and they have explained their fears and very soon we will have something that is valuable so Nigerians will reduce the cost of the CTN so it does not increase the cost of doing business. What CTN does is tremendous. For more than any transport document, electronic cargo tracking note will mean the era of concealment or under declaration is gone. We have vessel reception. It is also a security document because anything coming into Nigeria will be known, fire arms, dangerous goods and one will be able to track cargo wherever one is. The clearing processes with CTN are simpler and more transparent. So manifest is sent electronically even if the ship sails. That means cargo reception, vessel reception, less dwell time at the port among many other things. We are back on track now and very soon we will start implementation of CTN, maybe next year.

Given what you have just said, to what extent will the new document add to general cost of doing business at the port?

The cost will be minimal, I would not know the percentage now because there are so many things to work out and going to be open. Even then when we started and ran it for one month, many countries are doing that, Ghana, Uganda, and Niger  have CTN, so why not Nigeria to enhance the accuracy of our shipping documents for statistics and data.

Initially, it was introduced two times but that idea was killed.

It was not killed. Shippers’ council will never introduce a product that has no general acceptability. We are stakeholders-based and there must have been fears that it would add to the cost of doing business. And some fictions by some foreigners they cannot dictate for us what we do with our economy. This is happening over the world especially Nigeria because of certain interests.

People who under declare, conceal and benefit from the chaos at the port would not like CTN but as usual, everything you produce you expect opposition because it is regulatory.

How well have you secured the approval of the organized private sector?

 

We have had discussed with  MAN, an active member of Nigeria  Shippers’ Council Board of Directors, we have talked with the Shipping Companies, the Shippers, Freight Forwarders, Customs, NPA, NIMASA. This project will not be handled solely by the Shippers’ Council. There will be a committee that will be assigned these issues and we are going to be the facilitators. But for now it does not matter who is running it. Nigeria Shippers’ Council is just one of the stakeholders in this project.

Where will the money go to?

The money will be decided by the government, the operators will have a sharing formula. The money is not important, what is important is its effect on the Nigerian trade because if to have CTN, it adds up to your scope in ease of doing business. We should de-emphasize the revenue aspect.

But in whose hand will the money domiciled? 

The money will be with the Nigerian Shippers’ Council but it’s a little administrative cost.

You made mention that it will help in ease of doing business. As at now, we see some countries that are not as big as Nigeria beating Nigeria to this. To what extent is the Nigeria Shippers’ Council contributing to the ease of doing business?

Ease of doing business has become a philosophy in Nigeria. PIBEC is populated by young extremely efficient people especially in the office of the Vice-President and they have changed the way we do things. One of the things is accountability. You are accountable. The government is the servant and the private sector is the master. Before it was the other way round .We have to introduce professionalism, transparency, simplification of processes and procedures.

Nigerian Shippers’ Council for example has insisted that manifest must be transmitted electronically, all charges must be published and this is being done now. If for example Shippers’ Council grants license and private sector applies for that license, there is a time when we have to approve it or by default it is approved.

 

We are accountable to the private sector; meaning the private sector is leading in the economy of Nigeria for greater participation, efficiency and effectiveness and that is what PIBEC has done.

I think when the history of this country is written one day; PIBEC must occupy a very important chapter.

Few years ago, we lost most of our land locked countries doing business with us. What happened? 

They are back. Shippers from Niger are now using Nigerian ports but there are still issues. The NPA has led Nigerian Shippers’ Council and some other agencies to look at this situation of transit trade. We are under legal obligation by international conventions to assist that land locked countries get their cargoes through us but then we have to make our ports efficient again. There is no monopoly and that is why Niger sometimes goes as far as Cote D’ivoire or Togo or Benin to import their products but through the help of NPA now, many conditions are being met.

And Niger, I am happy that even through last month some substantial cargoes were transited through our ports and we are targeting 2000 metric tons of cargo that Niger brings. We have to have the support of shipping companies, terminal operators, NPA and Niger, more importantly, would like to use the Eastern port like Warri and Calabar instead of Lagos. We are killing two birds with a single stone by patronizing the Eastern port, decongesting the Lagos port and also getting revenue for our trade.

We learnt others are not willing to come back.

They are coming back. It depends on competition. The Nigeria Customs, Shippers’ Council, the Niger operators, Shippers Council had a meeting two months back where we looked at the issue of transit cargo. The only difference is whether Nigeria customs will insist on bank guarantee and then the Niger shippers will rather have insurance bond. We have made progress.

There are issues of physical barriers to movement of goods, whether to charge for  the escort or not. Customs are alive to these responsibilities. Nigeria ports are becoming increasingly efficient. This year alone, the cargoes that came to Nigeria are one of the highest so you could see that there is efficiency. If not for the infrastructural decay in Apapa which is temporary and being addressed by the government, we would have had more advantage because we are better than our competitors.

What are those issues that made them leave in the first instance?

The first issue was the transition when the ports were privatized, NPA was no more operating the ports, the issue of transit cargo was never considered. They would have told them to negotiate with terminal operators or would have somehow accommodated them but unfortunately, this was not done.

Secondly, the cost was high both at the port and during the movement. There are lots of physical barriers, it is a question of competition but I am happy now that we are all cleaning this and I want to really appreciate what the NPA and Nigeria Customs have done towards this.

During that time they left, how much do you think Nigeria lost?

We have lost a lot. 3000 metric tons, you can do the maths but they are coming back.

Recently, there was this talk about the ICDs and you have been much involved as the head of the Shippers’ Council.  We heard you went to Ibadan, Oyo state. What is the situation now especially for states that have been longing to benefit from the venture?

The dry port is not a constituency project that every state should have one. We need viable dry ports. A dry port is always successful by the tonnage it can accord it. It is an economic thing rather than political. Ibadan is strategic; it is the gateway to the North and East. It is proximate to Lagos, so you would need to decongest Lagos.

A dry port is a port just like Apapa and Tincan. You can consign your cargo to Ibadan and it will not be opened at the sea port but what is critical is the rail.

With the Chinese company, we have promised to invest in total of 500m dollars to create ICD, industrial park, Oyo state government is ready to give 90 hectares of land for that. We are thinking that if this is done, Oyo state government will donate the land to Nigeria Shippers’ Council. We give concession to the Chinese and then decongest the ports in Lagos. When the ship comes, it has gears, it is loaded to the train and the train will come to Ibadan and then you have everything, the Customs, Immigration and every other agency are there.  The same thing we are having in Kaduna. Although in Kaduna, we need rail transport and the Nigeria railway corporation is working hard to provide locomotives and coaches for that. It is bringing shipping to the doorstep of the people.

Initially there are ICDs located in about six geo-political zones of the country, but probably one or two have been completed but we do not know what happened to others.

It is the private sector. The port was concessioned to the private sector.

Talking about environment conducive to ICDs, those existing ones are having issues to be linked by rail even the Kaduna ICD. 

Yes, but it is not insurmountable and we are working on it.

To what extent have these ICDs achieved the purpose for which they were created?

The ICDs have started. Kaduna was commissioned in January by Mr President and so far has imported and exported a good number of cargoes but it is insignificant really but with the rail as the key to the IDPs. There are lots of things to be done. We need the shipping companies to sign the bill of lading but they would not even know the cost. There is no fixed cost of transporting containers by the rail to Kaduna. All these things have been straightened out and the Nigerian Shippers’ Council is on top of it and we hope by first quarter of next year, all the Ts would have been crossed and Is dotted.

It brings us to the same problem of government putting the cart before the horse. These ICDs are redundant because some have not taken off and few that have taken off are having challenges. The rail should have come first 

They are not redundant but rail is critical. But ICDs can function with even road just like it is happening in Kaduna where most of the containers come by road, but this is just a gap that has to be filled. I agree with you that maybe we put the cart before the horse but we can have them altogether, reverse them.

The NRC CEO said without enough cargoes, they will not be able to release their coaches.

That is putting the cart before the horse, but how can you get the cargo when you don’t have the rail. It is something for synergy and that is why Shippers’ Council has called meetings where we have the operators, shipping companies, the shippers abroad, freight forwarders, and the customs. Customs have done very well for the ICDs. Central bank has recognized ICDs in its Form “M”. These are all the things we have done and really moving toward proper utilization of ICDS.

Recently, you said your aim was to reduce cost of shipping by 25% but you have to juxtapose this with the recalcitrant nature of our service providers who impose arbitrary increase, so how do you manage this scenario? 

Costs are structured and service providers must operate within a systematic tariff system scientifically laid out, what we are trying to do is not to fix the price.  But we are going to fix the minimum and the maximum and within those range we will have different amounts so as to encourage competition. But we have had the cooperation of shipping companies and had series of meetings with them and have almost concluded the arrangement which we also have to take to our stakeholders for validation. The government first, then our principal stakeholders. Whatever shippers’ council does, the input of stakeholders is extremely important and that is what we are doing. But we are targeting 25% reduction in the cost because it is not even the money collected but  the more cargo come, the more your revenue but there should never be arbitrariness or unilateralism in fixing price. So the days of illegal shipping charges are now gone.

We commend your efforts sir, but we are aware that some of them have taken the Shippers’ Council to court. Does that mean they are still contesting your legality as economic regulator? 

The shipping companies’ ground was that the negotiations was not completed before we published the price they are supposed to pay  but we have now gone beyond that and they are trying to settle the matter out of court with Nigeria shippers council.  We would not have gone to court in the first instance and very soon we would come to a settlement and I am sure this would be known to the stake holders.

Another problem which has led to inefficiency of the port is traffic gridlock. The stakeholders are complaining that the cost of taking containers out of the port has gone up more than 300%.

It is a temporary thing which is caused by failure of infrastructure and we should also be able to see that the government is very serious about it. Not long ago, the Minister of Works flagged off the Oshodi up to Mile 2 then Apapa; Dangote is also doing road up to Costain but even more importantly, the Federal Government is now linking the port with rail. It is a policy and the Minister of Transportation said certain structures will have to be put down. So if we have multi-modal approach to evacuation of cargoes instead of only one dominant mode which is the road then we have washed off the problem.

What is your outlook on the maritime sector next year? 

The maritime sector will be a prime honour of additional revenue to the government and by the end of next year, our ports would have been competitive and Nigeria should have been the preferred destination of cargo in the West and Central Africa sub region. There would be certain automation, modern traffic management, diversification of the mode of transport by introducing rail-road-inland water ways. We would have started introducing a national single window project which is the ultimate port community system procedure where all the issues are simplified in one stop-shop so that we will have efficiency. I am  seeing also the development of the Lekki deep water port I think I am looking forward to that because this is a modern port, a port with the economies of scale that should bring more cargo to Nigeria that will be more  than processes, procedures and systems and  will be automatic modern by international standard. 2019, is going to be a very rewarding system for the maritime industry.

Finally, the Single Window project that has been on for so many years, what has been its challenges? 

Lack of synergy. The problem is ownership. Parastatals like to own it. It does not matter who owns it but let it happen. The Minister of Transportation is very clear on this. He said it does not matter who is running the national single window, let it just happen and I am sure that is what we are going to see.

who is going to run it?

There are many ways of doing that. You could have an agency or a private company to run it but what is needed is coordination. The office of the Vice President is already doing that. NPA, the Nigeria Shippers’ Council are all important. The issue is we all have our single windows but they are locals so we need to have one-stop shop that is connected, integrated so that there will be ease of doing business.

So the presidency has taken over to project? 

Not really, what I am saying is the Vice President is the chairman in PIBEC issues in ease of doing business and how else can you get ease of doing business apart from the national single window?

 

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