Buhari: Taking Maritime Sector to the Next Level • Performance, Agenda, Expectations of Stakeholders
On assuming office in 2015 as the Minister of Transport, Rt. Hon Rotimi Amaechi had expressed concerns about the contribution of the nation’s maritime sector to the Gross Domestic Products (GDP). He was informed that the sector contributes only 1.41 per cent to the GDP. Armed with this information, the Minister had tasked all the agencies of government in the sector to work hard to improve on the situation.. As the four years of President Muhammaud Buhari’s first term of administration ended May 29, one can say that the sector faced a lot economic challenges due to poor infrastructure that slowed down trade and therefore performance. The agencies struggled to find new bearings despite these hard times. In this report, SHIPPING DAY Correspondents x-ray efforts of the key agencies in the sector in the past few years, bring views of stakeholders as an agenda for moving the sector forward in Buhari’s promise to move the economy to the next level this second tenure…
Adjudged as the second to oil in terms of contributions to the national economy, so much is expected from the maritime industry under the present administration of President Muhammadu Buhari. Incidentally, it has not been rosy for stakeholders in the sector in the past few years. It has been rough from all fronts. The sector despite what appears like rosy revenue generations from the Nigeria Customs Service (NCS) is not contributing as much as expected to the Gross National Product (GDP). The current GDP of the sector to the national economy is less than two percent. A number of industry issues is responsible for this. Shortly after his appointment as the Minister of Transportation, Hon Rotimi Amaechi when briefed about the sector’s contribution of 1.41percent to the economy was surprised how low it was. He had therefore set out to ensure that the sector and indeed the entire transport industry improves on the situation. But as the four years administration of President Buhari ended May 29 for a new beginning of another four years, the target of Amaechi may have been far from being met. But suffice it to say that there have been a lot of ground work or foundation on improving the situation. Yet, what is required is implementation by either Amaechi or whoever will take over from him as the next new Minister of Transportation. However, one will say that Amaechi did his best under the circumstances. His efforts are clear in the rail sector and Nigerians will witness changes when the rail connections throughout the country and between seaports and dry ports are completed.
Boosting Trade
The major problem that has confronted the sector is the policy of 41-items on the list, now 43, under which importers are denied official foreign exchange by the Central Bank of Nigeria (CBN). The emphasis has been on raw materials for local production of goods as well as agriculture and exports. Government is making progress in agriculture to the extent that sometimes local production of rice has helped in bringing prices of the product, including the smuggled rice low. As at the time of filing this report, the price of a bag of rice was N15,500 for foreign rice. It earlier sold for N13,000 in December. In the South Eastern states, prices of rice are even lower for locally produced rice, but higher for foreign rice (about N18,000). The current situation in the industry is one in which many importers of other trade goods are full of lamentations because of the high cost of foreign exchange and the bottlenecks in clearing goods at the nation’s ports. The issue here is the extortionist tendencies and the multiple checks that importers go through while clearing goods at the ports. As the resident customs officers examine the goods and release them, the importers still suffer in the hands of Federal Operations Unit (FOU) and Headquarters Strike Force whose operatives mount road blocks for another round of checks. The importer has to spend thrice more than what is expected in the hands of the customs officers. The Customs Comptroller General, Col Hammed Ali (rtd) had in May decided to make some changes in the leadership of the Strike Force. However, one must note that the importers are to blame for what they suffer from the Customs as they are involved in a lot of malpractices ranging from under-declaration, concealment to under invoicing in the bid to maximize profit. This explains why customs operatives harass them to the marrow to also extort money from them. Strong views are that the resident Customs officers are responsible for this problem as they collect settlement and let go instead of adequate punishment to serve as a deterrent. And that is the situation at the ports. Industry operators expect the federal government and indeed the CBN to review the FOREX policy to accommodate some of the importers under the 43-items least. The strong belief is that when this happens, trade will boom and what follows is more revenue for the Customs Service. The Customs leadership had at one time or the other also expressed concerns on the effect of the CBN forex policy on revenue generation. The CBN policy has affected many importers and customs agents who are involved in trade goods not enjoying CBN FOREX . Although, one understands the policy of the federal government in trying to encourage made in Nigeria goods, policy makers also need to understand that there are some trade goods that Nigeria has to import for obvious reasons. These are goods that are not produced enough in Nigeria to satisfy demand and supply. For instance, foreign rice which is prohibited from importation remains the most staple food in many homes in Lagos and many states.
Ports Infrastructure Rehabilitation
One major issue that has affected Nigeria’s maritime industry is the poor infrastructure. The roads leading to the ports are in dilapidated state, particularly in Lagos. The Mile 2-Oshodi road leading to and out of Tin Can Island ought to have been among the priorities of the federal government all these years. The ports record as much as over N200bn monthly from the import duties, port charges and shipping charges collected by the Customs, Nigerian Ports Authority (NPA) and the Nigerian Maritime Administration and Safety Agency (NIMASA) alone. Nigerian importers are facing a lot of hardship and economic losses as a result of the bad state of the road. Containers are falling off trucks on regular bases. Many Nigerians who have no choice than to patronize commercial motorcyclists had died due to accidents suffered on the road. It would be recalled that the NPA had two years ago started the rehabilitation of the Apapa port road which has improved but not ended the gridlock particularly in the evening because it is the only motorable way out of the seaport. The Tin Can Island remains in a bad state. Just recently, the federal government awarded the contract for the reconstruction of the road. One expects that government takes the job seriously to achieve a tangible result on the road this year. The NPA in the wake of the gridlock and recently too provided Lily Pond terminal to serve as trailer parks. This has eased vehicular movement into Apapa for those coming from Ijora bridge and the Island. The Tin Can Island port road needs to be rehabilitated with speed for the smooth passage of the trucks and other road users coming or going. This is specifically the responsibility of the Ministry of Works and Housing and the NPA has been pushing the matter up.
Recently the Managing Director of the authority, Hadiza Bala Usman blamed the Ministry of Works for the many years of perennial traffic crisis being suffered in Apapa and Tin Can Island ports environments.
This was as the Lagos State Transport Management Authority (LASTMA) lost one of its officers while battling traffic congestion in Apapa. Usman said it has taken the Works Ministry 10 years to complete the trailer park in Tin Can Island which would have been able to serve as a safe haven for trucks in the port areas.
Usman had disclosed that the management of NPA had requested to take over the project to facilitate its quick completion but was not allowed.
She called on the Ministry to do everything to conclude the project, adding that this was the only way to address the congestion on the Apapa ports environment.
Usman called for the construction of more trailer parks outside the seaport environment to be able to decongest the roads leading to the ports.
She disclosed that the NPA had had to withdraw the lease granted for the use of Lilypond terminal to be able to use it as a trailer park.
The federal government had also recently apparently responding to outcries to the Apapa gridlock also set up a Presidential Task Team headed by the Vice President Yemi Osinbajo to free the roads leading the ports from congestion. The Task Team which was given two weeks to carry out the assignment did a good job by freeing the roads leading to the ports of heavy trucks that were used to blocking the entire environment. While on the assignment, the federal government announced the award of contracts for the construction of Tin Can- Oshodi road. Osinbajo had in the wake of the assignment visited Lagos ports to see things for himself. He had promised the determination of the government to end the gridlock in Apapa port.
However, the management of NPA also needs to continue to deepen the draught of the ports to be able to accommodate bigger vessels. Except this is done, Nigeria will lose the market to neighbouring ports of Cotonou, Ghana and other West African ports. Incidentally, most of these ports are lucky to have ocean deep seaports. Nigeria is currently building deep seaports in Lekki and Badagry which when completed is expected to ease the situation in Apapa- Tin Can ports.
NIMASA: Fixing Challenges of Piracy, Indigenous Shipping
For vessels trading with Nigeria, the biggest problem is the rate at which ships are attacked on the Gulf of Guinea and also within Nigerian waters. This has forced some big time multinational shipping lines to have their own security on board while bringing cargoes to Nigeria. The implication is also extra charge on shipping services. Sometimes, the incidence of piracy in Nigerian waters is over-bloated by the shipping lines as they try to justify their charges. But piracy is real in Nigeria and the Gulf of Guinea. The pirates apart from just attacking and stealing money and materials belonging to the crew on board also kidnap in a bid to make more money. Sometimes the crew involved in this hardly survive.
The management of NIMASA is currently working hard to address the issue of piracy on Nigerian waters and even on the Gulf of Guinea.
The Director General of NIMASA, Dr. Dakuku Peterside, had while defending his agency’s budget for 2019 described the level of maritime crime as high, saying Nigeria is seen as the headquarters of piracy in the world.
He told the Senate Committee on Marine Transport that this was the perception within the international maritime sector.
Dakuku was responding to a question posed by members of the Committee on why the agency’s contribution to the Consolidated Revenue Fund went down from N22bn in 2017 to N16bn in 2018, a development he attributed to maritime crime.
The NIMASA DG pleaded with members of the Committee led by Senator Ahmed Sani to assist in the concurrence process of the Maritime Security Bill, adding that the country needs adequate security on the territorial waters.
However, Dakuku assured that the agency is doing everything to check the incidence of piracy and other maritime crimes. According to him, piracy and other maritime crimes have reduced drastically in the Nigerian maritime domain, making it safer for investment.
He said in a statement, “You are aware of all the measures we are putting in place to take the Nigerian maritime sector where it belongs and when you look at the multifaceted approach of the Federal Executive Council’s approved deep blue project which covers every aspect of maritime security, you will realise that a lot has been done to get us to this stage.”
“Statistics do not lie and so when the IMB came up with the report of our waters being safer, we were not surprised because we know the level of work we have done with the support of the federal government to ensure that the Nigerian Maritime Sector becomes an haven for investors.”
As the regulator in the shipping industry, the Director General of NIMASA, Dr. Dakuku believes that the passage of the Suppression of Piracy and other Maritime offenses Bill (Anti-Piracy) will provide a robust and detailed framework to criminalize and punish piracy and unlawful acts in the Nigerian maritime domain. The Bill will also provide for International Maritime Convention on maritime security to which Nigeria is a party.
Dakuku early in the year during a maritime forecast for this year said that all these will provide the necessary assurance to foreign investors that Nigeria and the Gulf of Guinea to a large extent is a safe hub for International trade. He believes that other Bills that would impact on the sector are National Transport Commission Bill, Petroleum Industry Governance Bill, National Inland Waterways Authority Amendment Bill, Coastal and Inland Shipping (Cabotage) Amendment/Revised Bill and Ports and Harbour Bill.
The former Minister of Transportation, Hon. Rotimi Chibuike Amaechi, had also promised that the federal government will rid the Nigerian territorial waters of criminalities through the Integrated Security and Waterways Protection Infrastructure, otherwise known as the Deep Blue Project.
Amaechi disclosed during the graduation ceremony for participants of the C4I Intelligence System Operator Course for the Deep Blue Project attended by the top echelons of the Nigerian Armed Forces.
According to the Minister, the 853km long Nigeria coastline and the country’s location in the Gulf of Guinea made it strategic for both maritime activities and security issues. Amaechi said,” our exclusive economic zone, as well as our strategic location on a major shipping route, which is the Gulf of Guinea, means that we cannot afford illegalities, such as piracy, oil theft, sea robbery, and other crimes”.
He added, “The Deep Blue Project is a conscious effort towards addressing illegality in our territorial waters and, indeed, the Gulf of Guinea.”
Dakuku had also during the occasion said the Deep Blue Project was multifaceted and involved the training of selected officers from the various strata of the security services and NIMASA as well as acquisition of assets to combat maritime crime.
He said, “The Deep Blue Project is a multipronged approach towards tackling insecurity in our territorial waters and the entire Gulf of Guinea. What we are doing is fulfilling the training aspect of the project and this will also be complemented by acquisition of assets, such as fast intervention vessels, surveillance aircraft, and other facilities, including a command and control centre for data collection and information sharing that will aid our goals of targeted enforcement.”
“The Deep Blue Project is geared towards building a formidable integrated surveillance and security architecture that will comprehensively combat maritime crime and criminalities in Nigeria’s waterways up to the Gulf of Guinea.”
Piracy in the Gulf of Guinea remains a big concern to many. Just recently, the government of India issued a restriction banning all Indian seafarers from working on vessels in the Gulf of Guinea. World Maritime News had reported that in a circular sent to ship owners and shipping companies, India’s Directorate General of Shipping in Mumbai informed that the move comes on the back of an increasing rate of piracy and hijacking of crew for ransom in Nigerian waters.
The Chair of the UK Shipping Defence Advisory Committee and Vice President of Shell Shipping & Maritime, Dr. Grahaeme Henderson, had also expressed concern about the Gulf of Guinea piracy situation. He was reported at a symposium, ““The high level of piracy and armed robbery attacks in the Gulf of Guinea is not acceptable. Yet it is happening every day and this is not business as usual. We need to take urgent action now.”
Promoting Cabotage Shipping
Cabotage shipping regime which came into force since 2003 has not achieved the purpose for which it was designed. The policy was put in place to promote indigenous shipping participation in which local goods within the nation’s coastal waters are reserved to indigenous operators. This is to ensure that indigenous operators take part in local shipping like foreigners who dominate the international scene. Provisions were also made that in situations where the indigenous operators lack the capacity for certain jobs, foreign shipping operators should be allowed to come provided they have the waivers to do so. But experience showed that foreign shipping companies operating illegally took over the local shipping environment either with waivers sourced illegally or without waivers. The worst scenario was that the Nigerian National Petroleum Corporation (NNPC) and oil majors owned by multinational agencies have not been patronizing local shipping companies as required by cabotage provision. The two prefer foreign shipping companies, claiming that the local operators do not have the capacity. This has been the problem of indigenous operators. The federal government on the other hand has not helped matters as the Cabotage Vessel Financing Fund (CVFF) meant for local firms to develop fleet capacity with about $120million in the kitty has not been disbursed. So, the local operators are confronted badly from all fronts. They suffer lack of patronage from NNPC and oil majors, issue of foreign firms operating illegally without waivers and refusal of government to disburse CVFF which is supposed to be a loan to them. This scenario has left them in the cold as far as shipping industry development is concerned.
However, aware of the predicament of the local shipping companies and protests by operators, the federal government has been full of promises to address the issues. Part of this is a promise by NIMASA leadership to end cabotage waivers to non-indigenous ship owners within the next five years .
This decision was taken in collaboration with key stakeholders as part of the move to facilitate optimal implementation of the Cabotage law.
Dakuku during the meeting said his agency was determined to ensure that Cabotage waivers were stopped in the next five years.
He said, “NIMASA’s mandate is all about promoting and regulating shipping in Nigeria and we have no intentions to stifle anybody’s business. Rather, we are committed to promoting, protecting and providing the enabling environment so that the local ship owners can grow and compete with their international counterparts.
“We are, certainly, determined to work with our stakeholders.”
Dakuku explained that part of the strategy to bring an end to the issuance of waivers was to develop infrastructural capacity and human capital with respect to training of seafarers to attain global standards.
Calling for cooperation with the agency to realise the Cabotage implementation, he explained the sector holds a huge potential to create jobs, add to the Gross Domestic Product (GDP), and bring about a boom in the economy.
The former Director-General of NIMASA, Mr. Temisan Omatseye, believes that NIMASA was the only agency recognised and mandated by the government to regulate and enforce shipping activities in Nigeria. He urged the agency to use the powers bestowed on it by law to ensure total compliance with the Cabotage Act and apply punitive measures against erring shipping companies.
Omatseye said, “If we don’t begin to enforce the Cabotage law, the use of the Cabotage Vessel Financing Fund (CVFF) will be defeated.”
Other stakeholders who spoke at the event were Mr. Mike Igbokwe, SAN; Barrister (Mrs.) Obiageli Obi; and President of Nigerian Indigenous Ship Owners Association (NISA), Mr. Aminu Umar applauded the move by NIMASA.
However, Dakuku pointed out that the CVFF will not be adequate to address the huge demand for maritime asset, adding that this was what forced the agency to seek other ship financing models .
According to him, “We have been engaging with government at the highest level to push for special intervention fund, special interest rate and other incentives that will drive optimal performance in the sector. We shall not relent in our drive to put the right framework together to help beneficiaries and investors have good return on investment. The country is also making huge investments in human capacity development in the sector, which means that more Nigerians will get involved in shipping, especially, in shipping operations”.
Other incentives being sought by the agency include change of Nigeria’s crude oil trade term from Free on Board (FOB) to Cost Insurance Freight (CIF). The agency, according to Dakuku is engaging the office of the Vice President to see the need for a special tariff regime in the industry.
He told newsmen, “I am sure you are aware that NIMASA is pursuing a set of incentives for ship owners in the country. Tariff is just one of the many things we are pursuing in the basket of incentives. We have opened engagement with the Federal Ministry of Finance and Nigeria Customs and their position is that the decision on that is to be made by the highest level of government and so we have commenced engagement with the Office of the Vice President.
“We try to explain to them that if the Nigerian ship owners are going to compete with their peers and the rest of the world within the cabotage regime and the industry, then they must have a special tariff regime. Those who bring in vessels to work for short term must have a different tariff regime from those who are bringing vessels to the country. So it is not going to be competitive for the Nigerian ship owner and I think that it is receiving attention and they now appreciate the point. We are making progress and very soon there will be some good news for all of us.
“We are also pushing for the change of trade terms and we have addressed the issue to the point that a technical committee has been set up by NIMASA and when the committee has submitted its report, we will advance to engaging the presidency and I know they will support the change of trade terms.”
He promised that government will release the CVFF this year, adding that it was awaiting the President’s response based on the recommendations to him.
He said, “We engaged the President concerning CVFF and he raised a number of issues and we have responded to it and I believe that once the President reads the response we have made to the issues he raised, there will be favourable disposition to the disbursement of the CVFF.
“It will be disbursed this year and the ship owners will benefit from reviewed interest rate in terms of facility to acquire assets in the country.”
Optimism, Agenda for Shipping Devt, by Stakeholders
On how to move the sector forward, President of the Nigeria Indigenous Shipowners Association (NISA), Alhaji Aminu Umar said the sector needs a lot of support from the federal government. Umar said that if NIMASA should focus seriously on the policies it has drawn out, it will achieve so much for the sector in the next level. According to Umar, the shipping sector has been contributing to GDP in other countries and Nigeria cannot be an exception. He identified United Kingdom, Singapore and a host of other countries where shipping has played a major role in economic development.
Umar also expressed optimism that the government will eventually disburse the CVFF, adding that it was time to keep the promise after all these years. On how indigenous operators have been getting funding, he said it has been tough. Umar said the shipowners expect that the disbursement of the CVFF should be carried out under the second term of the administration.
On areas to applaud the present administration, he said, “ we have seen a lot of engagement which has never happened before in terms of talking to industry players, engaging industry players to ensure that the policies put in place are right, in order to create an enabling environment. This is unprecedented. We have not seen it before. This government has actually tried so much, we have seen from the business section headed by the Vice President. They have been engaging with industry players in developing the sector. We have seen a lot of engagement more than any other government”.
Umar also believes that this year will be remarkable for the maritime industry, adding that even with all the challenges, there are strong indications that the situation could be better.
“If we look at it globally, maritime business is on the growth graph. For 2019/2020, it is expected to be at the peak for the maritime business. So, Nigeria cannot be in isolation. We believe that the maritime business will be growing in these years.
“Yes, there are challenges in the sector, but over the years, we have seen many more Nigerians participating in the industry. Like in the past six years, the number of Nigerians who own ships have increased, far more than the number 10 years ago, in terms of number of vessels that are owned by Nigerians doing the business of maritime.
“The situation is tough, but we believe the growth can be bigger with improvement in the working environment. But, they need to be dealing with issues of finance, infrastructure, security and safety.
“If they deal with these issues, the insurance premiums we pay will reduce, loses we suffer when we want to take private security men will be taken care of, and those savings will increase investment in the business.
“It simply means that we would have bought more vessels if the environment were better than what it is today. However, if we do the assessment, the growth is there.”
Shippers Council and Drive for Ports Efficiency
The Nigerian Shippers Council (NSC) is involved in a wide range of development efforts that are aimed at improving the ease of doing business at the ports. The emphasis has been on checking illegal port charges and provision of infrastructure that will make the ports efficient. Having battled shipping companies and terminal operators to retrace their steps on illegal charges, the NSC is currently expected to negotiate out of court settlement on the case with service providers. This is about the fifth year of the case between the terminal operators, shipping companies and the NSC. The two had lost both in the Federal High Court, Appeal Court before heading to the Supreme Court. An out of court settlement is seen as a better option for the interest of the industry and the economy. On the international scene, the NSC is also taking the issue of surcharges by shipping lines to Global Shippers Forum (GSF) through the African Shippers Council (ASC) to call to order various conference liners who have been imposing all manner of surcharges on goods coming to the country. The NSC had as part of the efforts to save shippers from undue payment of demurrage had reached out to the terminal operators and shipping companies to extend their free demurrage days. Executive Secretary of the Council, Bello said the shipping companies extended the demurrage free days from 5 to 10 days, while terminal operators have reviewed their three free days to 8 days.
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The NSC is also involved in dry port projects in the six geo-political zones of the country. It is expected that some of the Inland Dry Ports (IDPs) may be completed this year. The Kaduna IDP started operation January last year. Now, there is a rail link directly to the dry port which was launched recently. It is expected that the Jos IDP may be completed this year. All the IDPs have potential to promote job creation in the states where they are sited. The idea of the IDPs is to make both export and import business easier for shippers. With the IDPs, importers and exporters do not have to come to Lagos or other seaports for shipment. Importers can just choose the IDP as port of destination where they can receive their goods when they travel to any part of the world for trade transaction. The same thing for exporters from any part of Nigeria who can stay in those IDPs to export their goods to any international port. It is envisaged that the IDP will equally address the issue of gridlock that has been associated with Lagos ports. The Council assured that with the planned construction of IDP at the terminal end of the Lagos-Ibadan Standard gauge railway, this will help in reducing the gridlock. The IDP will serve shippers from the South West with rail links. The dry port, according to Bello will create 3000 direct jobs and over two million indirect jobs. He said during an inspection tour by the former Minister of Transportation, Hon Rotimi Amaechi that the IDP is expected to be constructed in the next in 18 months and will be technology driven to avoid the mistake made in the seaports.
Bello told newsmen during the tour, “It is 18 months construction time and before that we negotiate the terms of the lease. It will be a modern facility driven by technology and we try to avoid the mistakes of the seaports.
“Most of the land will be for industrial park and truck transit parks so that there won’t be congestion, but most importantly, the dry port will eliminate the perennial congestion at the seaports in Lagos and other places and we will like to move cargoes out of the port to hinterlands because port is not a storage place”, he said.
The federal government, Oyo state government and a Chinese construction company, CRCC, had signed an agreement to construct new dry port at Ibadan for the sum of $134million.
The IDP has capacity for 40,000 ETUs and will be developed in three phases.
Customs and the Challenges of Reform
One must admit that the Nigeria Customs Service (NCS) is doing well in revenue generation and anti-smuggling operations. But observers believe that it is better if the Service introduces a drastic reform that will hurt all, the importer, agent and its resident and field officers. The Service has performed creditably in the area of revenue generation with about N1.2trillion recorded for last year as against N1.37trillion in 2017. The Service has also done well in anti-smuggling operations. There is hardly any hour passing without reports of seizures recorded by the Customs operatives on the field. It seized goods worth over N40billion last year. The seizures have also been mounting since then. This year, it has announced several seizures that have ruined many importers and smugglers. However, the biggest challenge for the management team of the Customs is to enthrone a lasting reform that will deal a big blow to corruption in the system. Even with the good work of the customs men, one will say that corruption is still an issue in the system apparently because of the unrepentant nature of some businessmen who must maximize profit. Bribe taking is of two sides, the giver and the taker. In the ports or border stations, the issue is that the importers are ever ready to spend money to cover their fraudulent practices. They do this when they are caught in under-invoicing, under-declaration and concealment, among others. It is then left for the officers of the Customs to accept the bribe or refuse it. As enticing as it could be, accepting settlement from importers is another way of asking them to continue in irregularities which have been the case in the ports. The tradition of collecting bribe and allowing importers to go has also led to the problem of multiple checkpoints by the same officers of the Service. Over the years, the Service has Federal Operations Unit (FOU) which has been complemented with Headquarters Strike Force. Few months ago, news had it that the Service took a decision to reduce some of the checkpoints. The Customs also recently announced some changes in the leadership of the Strike Force which are now present inside the ports with the resident customs officers. This implies double tragedy for the importers who have to settle all before their goods are allowed out of the ports. Yet, the presence of the operatives of the Customs apparently drawn from the FOU or the Strike Force is still felt near Apapa and Tin Can Island ports.
The worry of many is that the customs checkpoints are too close to the seaports and border stations which have been affecting trade facilitation and ease of doing business. But why multiple checks close to the ports and border stations. The argument is that a simple check to confirm that the resident officers or those at the border stations did a good job on what is expected before an importer takes his goods should be okay.
Multiple checkpoints retard trade and counter- productive on the entire national economy. It enriches officers and this explains why it has remained.
Agreed that Nigerian importers are not honest and would always want to cheat to maximize profit, but this is envisaged from the onset and explains the reason for setting up the Customs Service which should do their job effectively.
So, the leadership of Customs should enforce total compliance on trade regulations.. It is an agenda for the Comptroller –General of Service as a difference to other CGs in the past. It is the real meaning of reform and not the one that enriches few to the detriment of the national economy. Suffice it to say that non-compliance to trade regulation is because there is the soothing convenience of oiling the hands of resident customs officers at either the ports or border stations. The nation will be better for this when trade regulations are followed with the importers having no reason to bribe anyone. It will lead to more revenue and facilitate trade as well. It would be recalled that customs agents had made it clear that if the right thing is done, the Nigeria Customs Service could be generating as much as N3trillion annually from the ports. So, in addition to more revenue, the right reform will take Nigeria closer to what obtains in advanced ports where clearing and goods delivery are all automated.
NIWA: Unveiling the Potential of Water Transportation
The inland waterways if properly developed can contribute immensely to economic development in the country. With the six geographical parts of the country surrounded by river, water transportation remains a veritable source of moving goods from one part of the country to another. But the task is for the dredging of the channels to make them navigable. The other issue is to regulate the industry and allow private investors to participate in the development of the sector.
The National Inland Waterways Authority (NIWA) is saddled with the task of managing the sector and the agency has been working on concessioning some of the river ports. They include Onitsha, Lokoja, Baro and Oguta River ports. With the concessioning, private investors could turnaround the sector and make it possible for improved movement of goods from one point to another. In Onitsha River port, there are already facilities. It is expected that NIWA will impress on states incharge of other river ports to hasten action on development. An example of the importance of waterways is Lagos where the Lagos State Waterways Authority (LASWA) said about two million people use water transportation. What is needed very importantly is strengthening safety regulations to avoid boat mishap that has claimed many lives in the past. In Lagos for instance, the traffic gridlock on many roads is a big encouragement for many to patronize boats provided they feel safe with the enforcement of regulations. The Managing Director of National Inland Waterways Authority (NIWA), Senator Olorunibe Mamora had few months ago narrowly escaped death during an inspection tour. A boat carrying log wood had hit his boat in what became a close shave with death. The boat was hit leading to water tricking in. The NIWA team led by the MD had to change the boat for safety reason. The incident is enough to give the team an idea of further safety measures as the boat carrying the wood was floating under water.
Following the incident, the Public Relations Officer of Nigerian Shipowners Association (NISA), Mr Emmanuel Ilori who is the Technical Adviser to NIWA MD said the agency was concerned about the safety and security of inland waterways in Nigeria. Ilori said the first thing is to remove wrecks on waterways so that boats do not have issues in movement. After the incident, he told newsmen, “to prevent boat mishap on the inland waterways and to be sure that when wrecks are removed they are not dumped into another place where it will become another hazard.”
“What we are looking at is to survey the wrecks. It is not only wrecks that we see on the surface alone because we also have wrecks under the water and these are underwater issues.
“That is why we say when people remove wrecks; we want to understand how they will dispose the wrecks so it won’t cause another hazard elsewhere”.
Industry watchers hold the view that many Nigerians would be ready to invest in water transportation once government provides the right environment. And for many to patronize the sector, issues of safety and security must be taken care of to avoid incidents of frequent boat mishap that have sent many to untimely grave. The sector has been awash with so many quacks operating without following laid down regulations. This is one of the reasons why so many people have lost their lives in boat mishap. NIWA should be able to cover all riverine areas operating water transportation to enforce safety measures. Besides, government should be able to provide adequate security for both passengers and operators to avoid incidence of kidnap and other forms of attacks by hoodlums. NIWA should also be able to regulate the fares to be paid by passengers using boats. It is also on record that a good number of boats belonging to NIWA are lying idle due to one problem or the other. This has impacted negatively on the objectives of acquiring the boats at millions of Dollars. MFs Onitsha and NIWA were two vessels acquired by the organization that are currently lying waste. MF Onitsha was acquired at the cost of N40m but has been idle after few years of operation. Instead of repair, NIWA management acquired another vessel built in Nigeria but which packed up about a year later. This is considered by industry stakeholders as waste of resources. In future, NIWA really needs to do its home work well before acquiring any vessel. The durability and viability must be taken into consideration. Perhaps, NIWA could do better by simply improving on the business environment and allowing only private operators to be involved as government is usually not good in business. Just consider the case of the Nigerian National Shipping Line (NNSL) which was liquidated in 1995 over failure to perform with over 29 vessels.
CRFFN: Enthroning Professionalism among Freight Forwarders
One major objective of establishing the Council for the Regulation of Freight Forwarding in Nigeria (CRFFN) was simply to sanitise the profession. But this is yet to be achieved about 12 years down the line. The associations of customs agents or freight forwarders as the case may be are still poles apart from being united. Perhaps, unity of associations of agents may not even be an issue any longer for the government for obvious reasons, but what could be of concern to the government is the issue of professional conduct. The extent to achieving this leaves much to be desired. Every agent is running his own race and that is working hard to make an ends meet in an economy that has remained unpredictable. Tons of documents submitted by agents for their importers hardly scale through without having issues. This has affected quick clearance at the ports. The argument by agents is that it is not their problem since they are working according to the brief given to them by their importers. Nigerian importers have always been in the habit of cutting corners to maximize profit. They embark on either under declaration, concealment and under-invoicing all with an aim to make more money. The blame on the agent is however that they know the truth but would hope on settling the matter with the Customs operatives at the ports. Most times the agents succeed, other times the importers pay dearly for their malpractices – leading to seizures, high level extortion from different layers of units of operatives who start from the ports, border stations to other multiple check points until the importer receives his goods at the warehouse. The extent to which the CRFFN has been able to tame the agents to toe the line of decency is not known. Some of the agents have been blacklisted by the Customs over the use of their licences to run fraudulent entries. On the CRFFN board include Rtd Major Tsanni Abubakar who is the Chairman. Abubakar needs the support of other Council members to effect the much desired changes.
One thing about the customs agents is that many of them have divided loyalty having received their licences from the Nigeria Customs Service (NCS). The result is that many of them do not care so much about the much talked sanity involving them in the new dispensation. But the leadership of CRFFN should change this.
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