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.
Photo Caption: R-L: Major Henry Ajetunmobi (rtd), Executive Director , SIFAX Off Dock and one of the panelists; Dr. Adewale Olawoyin, Lecturer and Staff Adviser, Maritime Forum, UNILAG; Chief Adebayo Sarumi, Former Managing Director, Nigerian Ports Authority and Chairman of the Occasion and Mariam Afolabi, daughter and representative of Dr. Taiwo Afolabi (MON), Group Executive Vice Chairman, SIFAX Group at the third edition of the Taiwo Afolabi Annual Maritime Conference held at the Main Auditorium, University of Lagos.