Nigeria: Strides, Challenges of Ports Economic Regulation

(file photo).
18 June 2021
opinion

Abuja — The job of an economic regulator is no doubt a formidable task. It is even more so in a sector like the maritime industry. This is considering the setting and practitioners. Some would describe the environment as having a mafia setting and therefore a sector to beware because of the activities therein. Although, this is not to smear the good image of the providers and consumers of shipping services, the truth is that the sector is not one for cosy practitioners, so to say.

It is a sector where everyone is in the habit of hustling to maximize profit in a peculiar way. It is an industry where some would often circumvent trade rules for maximum profit.

It is also a sector where government has over the years continued to wage war against all forms of trade malpractices. This is not just about the shippers (importers and the exporters), terminal operators and multi-national shipping agencies, but also government's own personnel who are supposed to be gate-keepers in the system. In effect, what the shippers do is of interest to the gate-keepers without which the latter is out of business.

For instance, it would be recalled that the former military President, Rtd. General Ibrahim Babangida, while in office decades ago tried to reduce the number of security agencies at the ports to no avail. The security agents would get a directive to leave, but would have a way of remaining put, enjoying the spoils of the sector. The security agents would insist on being part of examination of goods at the ports, or mount their own roadblocks if not involved for extortionist tendencies with the excuse of protecting national security interest.

That was before the concessioning of the nation's ports in 2006. Since then and in line with the ease of doing business at the ports, the agencies have had their numbers cut down. Yet, those affected, like the National Agency for Food and Drug Administration Control (NAFDAC) and Standard Organisation of Nigeria (SON), among others, have not stopped lobbying to come back.

The scenario is that even some personnel not posted to the ports among the approved agencies have devised new means of finding their way into the ports, or staying few meters away to the ports. Operatives of the Federal Operations Unit of the Nigeria Customs Service (NCS) are part of this. Surprisingly, they even engage the services of freight forwarders to justify their being on the road.

In Apapa port, for instance, one can find operatives of the FOU stationed permanently near Flour Mills/Area B Police Station waiting for containers that have been cleared at the ports. The FOU operatives also have a check-point at Otor Wharf, near Mile2 waiting for containers from Tin Can Island, Kirikiri Lighter Terminal and Sifax terminals at Coconut. Owners of such containers and other goods leaving the terminals must settle the operatives or they will seize or delay movement of such goods on flimsy excuses.

The situation has even become so embarrassing to the resident customs commands whose personnel wonder why such vigil few meters away from the gates of the ports where these consignments had gone through scrutiny. The operatives have had to claim that they have information on the containers as their excuse for stopping any truck. They have the backing of some highly placed customs officers at the headquarters who undoubtably may be part of the 'deal'. Again, the truth is that the resident customs officers are also involved in their own deal in which they extort so much from the erring importers and allow them to go. So, he irony is that the importer is faced with a double tragedy in which he settles the resident customs officers and again settles those waiting for him few meters away from the gates and others on the high way. At the end, it is the final consumers of the goods that suffer the costs involved. To observers, the situation in the ports is therefore one of conspiracy in what some shippers and customs officers are potential beneficiaries in trade malpractices.

For the Nigerian Shippers Council (NSC) as the ports economic regulator, the task of addressing such ills in the system could therefore be herculean. Indeed the maritime industry is a major economic zone which operations could be likened to a mild war arena. And this is with poor infrastructure leading to unending gridlock. The ports economic regulator will no doubt with the sad scenario in the ports environment give credence to this view. Saddled with the task of leading other agencies in implementing the National Ports Process Manual (NPPM) announced by the federal government in December last year, the Council no doubt has sad experience to share about the activities of the security agencies. One example is the efforts to eradicate bribery involved in boarding of vessels on arrival at the ports. In the past, some agencies were in the tradition of boarding separately until the Council decided that this should be done jointly by all the representatives of agencies assigned to the ports. The old system was prone to corruption in which some of the operatives collected large sums of bribe from the ships. Executive Secretary, NSC, Mr Hassan Bello recently threatened to expose corrupt officials of government security agencies demanding bribe to carry out their functions at the nation's seaports.

Condemning such attitude, Bello said this has negative effect on the ports as it sends bad signal to the international shipping community. He appealed to the Nigerian Customs Service (NCS) and other agencies to support the joint inspection to work at the ports. Bello believes that seven days cargo dwell time can be achieved with joint boarding of vessels and joint inspection of cargo. He argues that 21 days cargo dwell time as has been the case was because there has not been joint examination.

He said, "What kind of country or port do we want if agencies responsible for joint examination don't report on time? Examination of cargo should be done at a given time and people should abide by the Standard Operating Procedure (SOP) as far as clearance of cargo is concerned"

Bello had disclosed that through joint boarding of vessel, the Committee recovered $20,000 being bribe money by people who go onboard vessels. He warned that boarding of vessels in the ports is being monitored, adding that any agency or individual frustrating this process would be exposed. "We are going to name and shame them publicly and we will arrest them," he threatened.

However, Bello disclosed that a lot of progress has been made as far as compliance with the ports process manual was concerned. Many of the agencies, he added, have been complying with the NPPM, though some were yet to fully comply with the new SOPs.

Under the mandate given to the Council as a lead agency in ports process manual is to create a port environment that is very efficient and comparable to what obtains in other global ports. The Council in a bid to carry out the assignment has been involved in sensitizing of the ports community on ending trade malpractices and creating an environment for trade facilitation. The Council has carried out equipment audit on terminal operators to ensure that they provide latest cargo handling equipment that can ease trade. In effect most of the terminals can boast of providing enough cargo handling equipment to position containers for examination as required by the Customs. The result has been impressive, but the other side is that most times the Customs has been overwhelmed.

Enough cargo handling equipment has made it possible for improvement on ship turn-around time as vessels are not delayed in discharge of cargos. What the ports economic regulator however is championing is the introduction of scanning machine which will fasten examination of goods at the ports. Incidentally, the Customs has insisted that all containers must be examined 100 percent physically in what is not cheering news. But it would appear the NSC is in a dilemma when the Customs argues that it is targeted at checking smuggling of arms and ammunition.

As the ports economic regulator, the NSC sets this month June to attain high level of automation in ports services. In April, Bello had given a score card of the efforts to achieve automation at the ports. He had disclosed that some terminal operators and shipping companies have attained between 50 to 90 percent level of automation. As at April, PTML BUA and Grimaldi were leading in automation. Bello is full of commendation for the terminal operators and believes that this is the way forward for the industry to attain global attention in trade facilitation. The push for automation is to end the era of human contact at the ports with associated corrupt practices.

He said, "We shouldn't forget that we have competition. Nigerian ports should be the hub in the West and Central African region. However, we can't achieve this without ports that are fully automated and operating 24 hours daily.

"Most ports across the world are digitalised. Human contact is dangerous, it brings delay and extortion. A port isn't a place for contact. We are trying to achieve 100 per cent automation. To do this, we need full integration with banks, Nigeria Customs Service, terminals and shipping lines, among other stakeholders."

If the ports which are already linked with rails attain 100 percent automation soonest, perhaps what remains is the issue of gridlock at the ports. The federal government is targeting between end of this year and early next year to fix the Tin Can Island port road. For Bello, with good roads in and out of the ports, rail network, multi-modal transport system such as deployment of barges, Nigeria would be among other global nations having efficient trade facilitation which impact will have multiplier effect on the national economy.

Ugwoke is the Publisher/Editor-in-Chief of Shipping World, an online platform in Lagos

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