The Nigerian Shippers’ Council, we must understand, was set up principally to serve as what I term to be a consumer protection agency. By that, I mean it was essentially set up to be an agency that was saddled with the responsibility of protecting shippers. And in this case, we are talking about protecting the interest of importers and exporters on matters relating to the movement of cargo from point of origin to the point of destination.
It is also meant to protect the shippers in the area of freight rate, the standard of services, and local shipping charges. This has been the case up till 2014 when the Federal Government enacted the reforms that we have in our maritime domain now. So, the government in its wisdom now discovered that there was a vacuum that had existed in the course of the reform that was considered; there wasn’t a regulator as far as the commercial activities in the port are concerned. Therefore, the government now appointed the Nigerian Shippers’ Council to be the port economy regulator in 2014.
Now, the implication is that as an economic regulator, Shippers’ Council’s activities now moved towards regulating commercial transactions of users and providers of services in Nigerian seaports.
And this essentially was to enable the Council to prevent arbitrariness and also to improve the standard of service delivery in our ports. In a nutshell, I’ll say that, that presently is the situation of the Nigerian Shippers’ Council – the correct positioning of the Shippers’ Council.
It is no longer strictly a consumer protection agency as it was in the past. It now has this additional mandate that makes it now sit more effectively as a regulator of commercial activities in Nigerian ports. That is the situation of the Council at the time of my coming into the office as the Executive Secretary of the agency.
For more than 20 years, the Council has been trying to promote the development of inland container depots in the six geopolitical zones of the country but the ICDs are not yet operational. What are the challenges?
Let’s get the record correct. The inland dry port, first we have to recognise, was conceived by the Shippers’ Council as a critical infrastructure as far as the connectivity of seaports to the hinterland is concerned. At the moment, the Kaduna Inland Dry Port is already in operation.
As a matter of fact, it is not only in operation, it has actually been designated as a port of origin and port of destination. So, it is not totally right to say that 20 years later, ICDs are not operational. I also like to inform you that the progress of work that has been made at the Kano Dry Port, Dala, within the shortest period of time as far as the record shows; the Kano Dry Port should soon go into operation this year.
This is the same as Funtua Dry Port. There is also a very wonderful story today about the Ibadan Dry Port, where the process of concessioning has virtually been concluded and China Railway Corporation Limited has been engaged in the delivery of the port.
As I said, the processes that are needed to be in place, the concessioning, other procedures, and all that we are waiting for now is the final approval of the Federal Executive Council (FEC) for the Ibadan Dry Port to take off. So, I think that is one area we should be beating our chest as far as the Council is concerned in the area of activities of promoting critical infrastructure.
Does that mean there are no challenges?
No, there are challenges. First, we have to understand that the module of development that we have put in place for the delivery of the inland dry ports is the Public-Private Partnership (PPP) module. This means we need a lot of stakeholders to get involved in the process. Remember that most of these dry ports are located in states. It means now that we need the support of the state governments for the dry port to be warehoused.
For instance, I can give you a few examples of the dry ports where it has taken almost 10 years for the state government to do a simple function of land allocation. And the land is actually on the exclusive reserve of the state government. So, we cannot just walk into a state and pick up a piece of land and begin to develop a dry port. But there are state governments that have shown a tremendous amount of support.
That is the reason why Kano Dala Inland Dry Port is kicking off operation very soon. The state government actually injected huge capital into the development of infrastructure around the dry port that has enabled it to arrive at the point we are today; same with the Kaduna Inland Dry Port. The Kaduna State government took a substantial interest in the project and supported our efforts tremendously.
The Heipang Inland Dry Port, Jos – as we speak right now, the state government has injected close to N2billion of their resources to ensure the development of infrastructure and then to partner with the Shippers’ Council to deliver it as a dry port. So, the challenges span from the unwillingness on the part of some state governments to cooperate with the Council in order to deliver these inland dry ports.
And I found that very surprising because if anyone understands the economic benefits that a dry port can bring to the environment, I think every state government should jump at the prospect of having a dry port located in their states. Second, we also need to understand that funding is also an issue.
As I said, the module of development is public-private partnerships. So, unless we are able to get serious partners who are really interested in bringing forward the funds, then the Shippers’ Council does not have the funds to develop these kinds of infrastructure on our own. We need to have those partnerships for us to be able to deliver such critical infrastructure.
Freight rates have been rising and the Shippers Council appears to be doing nothing about it?
First, you have to understand certain perspectives on this issue of freight. The first issue is that the time has come for us to recognise that the question regarding freight is one that is governed really by a commercial environment that is dependent on the rule of engagement that I referred to previously as the economic imperatives of how to arrive at these rates. Freight is governed by rules of demand and supply.
That in itself is a challenge as to how you are able to determine freight rates. I mentioned earlier that the Council was established in 1978 with one main mandate, which is to protect the interest of the importers or exporters on matters relating to the movement of cargoes from point of origin and to destination; of course to moderate freight rate and most especially to also determine the standard of services and then local shipping. This was obviously the case until 2014 when we were appointed port economic regulator.
Now, what that means is that as far as freight rate is concerned, we are no longer in a position to just sit on the fence and extend protection only to shippers; we are meant to provide an enabling environment in a commercial way that would enable all stakeholders to be comfortable in their business place.
We are also meant to provide an unbiased regulatory framework that would enable the stakeholders to have an environment that allows them to do their businesses at an efficient cost in terms of service delivery.
That is why when this issue of freight is mentioned, the first thing the Shippers’ Council would like to address is for our people to understand that freight rate is no longer directly under our purview as a function to be able to regulate.
What we do essentially is to intervene and give instructions and regulations as far as local shipping charges are concerned and in that regard, I can say we are daily involved in negotiation with shipping lines and with terminal operators. However, we have also identified that we need to have adequate automation of our cargo delivery procedures. At the moment, there is still, unfortunately, a lot of manual work that is going on in our ports and that is unacceptable.
We, at the Shippers’ Council, will continue to advocate that we need to automate; we need to digitalise; we need to move in an area we will have less interface in our port. This is because until we do that, obviously all the other unfortunate variables like incidences of corruption would continuously trend. It is when human beings are interfacing a lot that you also have cases of people demanding for something to pass under the table for things to be done.
Most importantly, for us is the relationship that we are developing here. We have reached out to Customs for me to have an engagement with the Comptroller-General. It is obvious to us that that’s the big elephant in the room.
And unless we have e-Customs in place which we have been discussing since my time as MD of NEPZA; unless we get the scanners, so that the clearing procedures can be reduced to the minimum, we will be recording avoidable issues.
These are the areas that we need to be focusing on because when we talk about freight and the cost of doing business in isolation, then you are not doing justice to the matter. It has to be discussed within the context of other variables. So, we are not throwing our hands up at the Shippers’ Council.
We are not saying we are giving up and packing our bags while we leave our offices. The truth of the matter is that there are issues that are not directly under our purview. In some cases, there is a requirement for us to engage in advocacy that we are putting the issue that concerns variables on the table to come to a conclusion as to whether to approve an increase.
Freight forwarders have remained fragmented and factionalised despite several efforts to bring them together. What are you doing to change the narratives?
Freight forwarding is actually a profession and at the moment, the Shippers’ Council actually participated in midwifing the Council for the Regulation of Freight Forwarding in Nigeria (CRFFN). So, that’s the body that now has the full mandate of regulating and ensuring that there is sanity in the operation of freight forwarders.
To that extent, the Shippers’ Council’s ability to forcefully intervene in the activity of freight forwarders is limited. But what we do is to now extend a helping hand; reach out to CRFFN, working together with them in order to ensure that
we are providing a sane environment. The rivalry amongst different groups of freight forwarders is certainly counterproductive. I’m not sure that it is even helping the freight forwarders themselves, much less the objective of having such a powerful and important group as far as maritime services are concerned.
So, I think to answer your question directly, we have taken cognizance of the fact that there is now a body whose responsibility is to provide regulation to ensure sanity in the industry as far as freight forwarding is concerned. But that does not mean that the Shippers’ Council will completely abdicate from having an intervention or a role.
Do you have sufficient trained manpower to drive the operation of the Shippers Council?
Well, that is a very valid question. First, let’s understand that the Shippers’ Council, as I mentioned earlier, when it was conceived, had a very narrow mandate so to speak; simply just to offer protection to our shippers. Of course, we have moved so many ways and now there is an enlargement of the mandate.
But the total staff strength of the Shippers’ Council, at the moment a lot of people may not know, is less than 600. I mean given the enormity of the work that is meant to be carried out by this agency – that for me is already an indication that as far as manpower requirement is concerned, we are short-staffed.
But it is also a function of the budgetary provision that we have. And so, by government requirement, there is a certain amount of funds that you are allowed to expend such that your recurrence does not exceed a certain amount of resources that the government is allocating to us.
The Council at the present time is strictly dependent on an allocation that comes directly from the government’s coffers. It means that we are not able to provide the sort of staffing requirements. So, to answer your question directly, I’m privileged and fortunate to have met here in this Council, a group of technically proficient members of staff who have aided and supported me all along since I arrived here.
And there is a saying in the maritime industry that if you are actually looking for an agency that would do the work for you, go to the Shippers’ Council. I’m sure there is a reason for why that is the case because there is no assignment from the record available to me from the time I’ve been briefed on my arrival that has been given to the Council that hasn’t been performed creditably.
You know, that to me is evident to the fact that the proficiency of the staff of the Shippers’ Council is without a doubt; one that cannot be questioned. But is it enough? I think that should be the next thing we really should be discussing. And I think there is a lot more need for us to enlarge our coast as far as the staffing of this agency is concerned.
But keep in mind that there is also an attempt at reforming, so to speak, the whole regulatory framework.
If you see where we are coming from as I indicated earlier from being simply a consumer protection agency to the regulator and now there is a likelihood that perhaps in our time, some regulatory framework that is undergoing processing at the National Assembly to even enlarge the scope of the Shippers’ Council would come to being. In other words, there is a tendency for the Nigerian Transport Commission Bill to be passed.
That clearly would mean that the staffing situation must change dramatically in order for us to meet the requirements and the services that the agency is meant to deliver.
What difference do you plan to make at NSC?
Yes, the vision of the Nigerian Shippers’ Council is to be the foremost port economic regulator or better still, to be the foremost economic regulator in the land. That is the vision. That is the goal.
My job here is to make sure that at the time of my departure, let it be said that the Shippers’ Council ranks as the foremost economic regulator in the land, and I think my job would have been done if I achieved that.
Credit: newtelegraphng
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