Harnessing Gains of New Seaports Reforms

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Nigerian Port Authority

Nigerian Port Authority

The Federal Government seems set and determined to take the Nigeria maritime sector up from its pitiable 146th position among 183 countries, as it begins an unusual reformation of the nation’s seaports. In this report, SAMSON ECHENIM writes that what is badly needed presently is a faithful implementation of the new reforms to place the maritime sector at par with international standards.

The Federal Government through the finance minister and leader of the economic management team, Dr. Ngozi Okonjo-Iweala last week slashed agencies at the ports to half retaining only critical agencies that would have permanent stay at the ports. She also announced the disbandment of the Customs taskforce and directed Customs to begin a 24-houwr shift operation. She also made a death pronouncement on the use of the controversial cargo tacking note (CTN).

The agencies issued a two-week ultimatum to vacate the ports included the National Agency for Food Drug Administration and Control (NAFDAC), Federal Environmental Protection Agency (FEPA), Directorate of Naval Intelligence (DNI), National Drug Law Enforcement Agency (NDLEA) and the Plant Quarantine and Animal Quarantine (PQAQ). Others are National Environmental Regulatory and Standards Agency (NESREA), and the Standards Organisation of Nigeria (SON), the Economic and Financial Crimes Commission, (EFCC), Independent Corrupt Practices and other Related Offences Commission (ICPC), among others.

Although the finance minister said there were 14 agencies at the port, most stakeholders put the number at over 20. However agencies clearly retained to have a permanent base at the ports are the Nigerian Ports Authority (NPA), Nigerian Maritime Administration and Safety Agency (NIMASA), the Nigeria Customs Service (NSC), Nigerian Immigration Service (NIS), Ports Police, State Security Service (SSS) and Ports Health. Apart from these seven agencies, other agencies will only have to come in to the ports only when their services are needed.

Okonjo-Iweala, who paid an unscheduled visit to the ports in Lagos on Monday October 10, in company of Minister of Transport, Mallam Idris Umar, Senior Special Assistant to the President on Maritime Services, Mr. Leke Oyewole and some members of the Economic Management Team made the ministerial directions and pronouncements in a sternly manner, clearly signalling the much cried-for change and overhauling of the nation’s highly corrupted maritime sector, which is said to be largest in West Africa.

The reforms, the minister said were targeted at reducing cost of doing business at the seaports, which experts believe is among the highest in the world, as well as reducing cargo dwell time to at most, seven days. She also said that an economic regulator would be set up by the federal government to monitor port concessionaires, most of which stakeholders accuse of unfairness and ineffectiveness due to lack of an economic regulator.

She said, “I am with a simple message from Mr. President and that message is that it is time for our seaports to start working and they must start working for honest and hardworking Nigerians not for those who are working to make things more complicated, make money out of our ports and make things more difficult for honest business person man or woman in this country.

“We must make our ports work for Nigerians who want to create jobs, that is really what Mr. President wants us to do and our being here today is a demonstration that we need to act and that this is no longer time for talking. We know that without an efficient port system, there would be high cost in the economy and so what we are doing now is to reduce those costs so that our business people would have the wherewithal to create more jobs.

“It is time for us to make things work in this sector. Things must begin to work, not for dubious characters who only want to enrich themselves, but thing must begin to work for honest Nigerians who want to create jobs. This is no longer time for talks. This is time for action and implementation starts now.”

While asking the Nigeria Ports Authority (NPA) to monitor the concessionaire in the meantime, the minister assured that the new reforms would be monitored to the letter.

She said: “We need the NPA to monitor the concessionaire in the meantime without failing. We will provide it needed equipment to make this job effective. We are not just going to leave this (reforms) just like that, but we want to enforce them and NPA will lead in the enforcement.”

Stakeholders and industry experts have since been reacting to the new reforms, which have received much more praise than criticism. Over the years, Customs agents and industry players have been crying foul, demanding a more efficient environment to operate in the ports which the World Trade Organisation (WTO) ranked 146th out of 183 countries in terms of efficiency. This is in spite of the concession of terminals which has brought about little improvement.

If fully implemented, the reforms would put paid to series of protests, accusations and counter accusations by most port users and other stakeholders for more than a decade, as they believe that these agencies, apart from helping to increase cost of operation, also constitute a major threat to the realisation of efficiency and timely release of cargo.

The General Secretary of the Indigenous Shipowners Association of Nigeria (ISAN), Capt. Niyi Labinjo told LEADERSHIP in a recent exclusive interview that shipping cost contributes about 40 per cent to the total import transaction where the transport element itself is just 11.5 per cent.

He had said, “The other costs are associated with handling cost because there is the problem of double handling. So, our shipping cost is 40 per cent, whereas Europe’s shipping cost is five per cent, including handling cost. The transportation element in our own case is 11.5 per cent of the cost of goods. The other 28.5 per cent comes in as a result of double handling, where more than one agency or contractor is doing one job.

“This is one of the factors responsible for the inefficiency of Nigerian ports. In the Nigeria system, we have about 27 agencies at the port. All we need is one agency, which will be in control of all the happenings and simply contact all other agencies at a phone call away. All other agencies should be at a phone call away. They don’t have to be located inside or around the port. That is the way it is done in other places.”

Chief Boniface Aniebonam, founder of the National Association of Government Approved Freight Forwarders (NAGAFF), reacting to the sack of the agencies said that the reforms had been long overdue. Another freight forwarder, Mr. John Ofobike, chairman of the Apapa chapter of the Association of Government Approved Licensed Customs Agents said, “At last, we can see that government has taken the bull by the horns.”

However, since the reforms were proclaimed, some analysts have made cases for affected agencies which they believe are indispensable at the port. A public analyst, Mr. Martins Ikhilae opined that Nigeria’s desire to achieve the United Nation’s set Millennium Development Goals (MDGs), which emphasises gross reduction in infants and maternal mortality rates may become a mirage if current government’s decision ordering NAFDAC operatives out of the nation’s seaports nationwide is not urgently reversed.

“The pronouncement is indicative of the policy’s lack of adequate and broad-based consultations before its adoption and subsequent implementation. The Federal Government should not allow itself to be misled by some self-centred individuals merely masquerading as patriots by daring to toy with the nation’s life-saving agency whose dynamic and selfless contributions towards efficient and effective healthcare delivery system are being ideally applauded both locally and internationally. It is absolutely indecent of government to either by omission or commission resort to leave the nation’s maritime gateways at the mercy of merchants of death-manufacturers and dealers in counterfeited pharmaceuticals and unwholesome processed edibles,” he said.

But the Seaport Terminal Operators Association of Nigeria (STOAN), hailed the Federal Government’s action saying that the presence of multiple government agencies, the high rate of physical examination of goods and the largely manual procedure involved in cargo clearance were the main factors responsible for the unnecessarily high cost of doing business at the nation’s seaports.

STOAN’s Chairman, Dr. Vicky Haastrup, in a statement in Lagos, said, “The roles of the affected agencies are important especially in ensuring that adulterated and sub-standard goods do not find their way into the country but our point has been that officials of these agencies did not need to be permanently stationed at the port.

“Customs should be able to perform these roles to a large extent and the representatives of the agencies can be invited intermittently and as may be required by Customs. The development is sincerely a major step towards consolidating the gains of port reform.”

Meanwhile the terminal operators have said that they will implement the presidential order reducing the number of government agencies at the ports.

“The directive of Mr. President is clear. Apart from NPA and NIMASA, only Customs, Immigration, Port Health, Police and SSS operatives are allowed to operate at the port and the other agencies have two weeks from October 10, 2011 to recall their operatives. So on our part as terminal operators, we will not allow any official of the affected agencies in our terminals after October 23,” she added.

The President of Nigeria-Danish Chamber of Commerce, Prince Koya Adako, said the reduction in the port tariffs and the pruning of the government agencies at the seaports were part of the many recommendation of the Chamber to the minister of finance in October last year.


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