Bello: NTC Will Revolutionalise Nigeria’s Economy
Executive Secretary, Nigerian Shippers’ Council, Hassan Bello in this interview with Eromosele Abiodunspeaks on how the National Transport Commission will enhance the country’s foreign exchange earnings as well as support its diversification drive, when it becomes operational. He also talked about how the NSC is curbing the excesses of foreign shipping companies
I will like to start by asking you to give a brief summary of your experience in your first term as the Executive Secretary of the Nigerian Shippers’ Council and your plans going forward.
My first term experience was quite exciting, but honestly, it was challenging. In the first four years, the NSC was grappling with both internal and external structural changes. We have been appointed as port economic regulator and this was thrown to the industry rather late. It should have been at the beginning, however, we struggled to get first recognition by the industry, which I think we got grudgingly. There were no rules and regulations and eight years after, the NSC appeared with the whistle in its hands and introduced rules and regulations.
Naturally, there would be the initial teething problems of recognition. It was a difficult journey, but overall, we superintended very well and, in the end, we did not only get recognition, but respect. But then the chaos at the port was also a daunting problem, everybody was doing what they wanted to do. There was nobody to supervise.
The port environment was not controlled, even though the port reforms were very good, there were threats of turning back the gains of the port reforms because there was nobody to look at first the efficiency of these ports, the competition amongst intra and inter terminals, the ease of doing business and the cost of doing business. The challenges first came when we rolled out our regulatory order to stop some arbitrary charges that was making Nigeria ports very costly. As a matter of fact, it was the most expensive port in the West African region, if not the world. We said there cannot be arbitrary charges, even if you want to charge, discuss with the NSC. This is what we did, but it resulted to court cases. Unfortunately, we negotiated with both the shipping companies and the terminal operators. The court has interpreted it recognising our regulatory power and declared the charges illegal.
So, we started negotiating and went to court, we are back at the table negotiating. So, we should not have gone through that journey of court, but that was challenging for us. But I think that inch by inch, we are making ourselves relevant. We are trying to bring a new port order, we have done so by prescribing the operating procedure for every agency at the port and we are trying to enforce that.
We have come out with the port complaint portal. It is electronic and when we started, we thought we could have an office at the port. This was approved by the landlords, but somehow it was not possible and we said we don’t need to be at the port just like any other agency to exercise our regulatory functions. We have a web-based complaint portal where every person can lodge a complaint, give a commentary or advice. The portal can also allow an individual track the progress of the complaint, and then escalate these complaints to the appropriate agency and we will have feedback. This has made our work easier and we have got cooperation. We are working very seriously with the shipping companies. We are about to come to an agreement and sign a memorandum of understanding (MoU) which will have tremendous impact on the way we do business in Nigeria especially in terms of cost and competition. We need our agencies to compete in healthy way against each other so that the customer becomes king. We want our ports to be efficient so that we capture goods from our competitors. We need efficient ports with linkages with the hinterland. We need deep sea ports instead of the river ports that we have in Apapa and Tincan. We need a new vista so that large ships can call to our ports. We need to have clearance procedures that are automated so that people can clear their goods within 48hours. We want our ports to work 24 hours daily like the airports. We want to attract cargo and bigger ships so that Nigeria can be a centre or a hub, that is the function of the NSC.
Determined to ensure that the Inland Dry Ports (IDP) and Truck Transit Parks (TTPs) flag-off operations as soon as possible, you approached investors and financial institutions to show interest in the modern transport infrastructure schemes. What has been the response so far?
Part of our regulatory function is to coordinate investment in the transport industry. We need to have more than infrastructure. We have a large deficit of infrastructure especially transport infrastructure. But I don’t see it as anything daunting, we need to upgrade our infrastructure and create new ones for efficiency. This is why we came up with the concept of dry ports or truck Transit Parks. These dry ports are located in five places and two are ongoing.
Unfortunately, we could not have all of them come up, because they have already been concessioned to the private sector. The misconception is that the NSC is building port, which is not correct. It is the private sector, because the NSC has recognised the potency of the private sector in driving the economy. Nigeria’s government has paucity of funds and budgetary constraints. But you align yourself and partner the private sector, then you see the sharing and apportionment of risks.
This has proved to be an international arrangement that will bring development. The first thing for the dry port is to bring shipping to the door steps of people in the hinterland. Nigeria is so blessed with vast hinterland.
We have 925 Square Kilometers with about 200 million people. Therefore, there must be inland connection. There must be integration. The Nigerian government is very much focused on the rail sector and the dry port is supported by the rail. Now, if we do that, we are making it easy for our people to import or export. We are di-congesting the sea port and transferring the economy of the sea port to the hinterlands.
Whatever happens in Lagos could happen in Kaduna. In Kaduna for example, some freight forwarders have already moved in there to get an office, so that is an example of inclusiveness. These ports are ports of destination and origin.
You can consign your cargo from any in the world to Kaduna, the bill of lading would be read, and the cargo will be examined. It is important that we have Truck Transit Parks, instead of delivery of goods by trucks, which delays and degrades the environment and causing much accident. It is good to have off the road facility which is modern so that we can house these trucks, they can have showers, hostels and hotels. They can also have conveniences and supermarkets. They would have garages for the repair of their spare parts and gas stations. Now, these have attracted a lot of investments in the transit park and we are about completing the issue of procurement. Soon we will go to work to have expression of interest and people can come and bid for it especially in Enugu and Lokoja. These are the two pioneers of truck transit parks.
We are working with ICRC and the Ministry of Work so that there will be some synergy between these organisations. An important element is the employment structure of these parks, we expect them to employ a lot of people because if you have restaurant, you will see a lot indirect employment, such as garages, clinics and others. This park is not only for trucks, it is also for the public. The luxury buses could have their terminals, and they could be warehouses. It is a modern way and it is going to be technology driven and payment is by chips. In the long run, we are adding value and making our infrastructure modern and the country modern too. The way trucks are parked in villages and towns is really not a good site. Therefore, we need to correct that.
President Buhari recently inaugurated one of your inland dry ports, can you tell us what is happening there right now and are you happy with the level of activity over there?
I am happy with what is happening, even though we have challenges. First, let me say that the Kaduna dry port is a custom port. Therefore, one can consign goods there and pay the cost of duty. Other agencies such as National Agency for Food Drugs Administration Control (NAFDAC) are also trying to get there. Freight forwarders have already started moving there. There are levels of operation of the dry port in Kaduna. First of all, customs have trained the operators of the dry port in Kaduna, which is ICNL Limited on their pricing system and also, they are trying to integrate it on the pricing system. Custom have issued station code to Kaduna, making it one of the ports of destinations and origin.
The Central Bank of Nigeria (CBN) has provided a form ‘M’ that Kaduna is also a port which is also a significant achievement. The Nigeria Ports Authority (NPA), the terminals operators and the shipping companies are aware and they are making arrangements to start issuing bill of lading. Now, the operators, ICNL is also going to open an office in China and United Kingdom. So that they can canvass for goods to come, our only snag is the Nigeria Railway Corporation (NRC) and they are working very hard to see that this thing is done.
They have given us one locomotive and 20 wagon for exclusive usage of Kaduna dry port. But I think the NRC is having small snag with their manufacturers. But very soon the wagons will be allocated. So many things are going on with Kaduna. Cargo throughputs has increased, trucks are using the amenities. This is very good. The dry port has recorded increase in export of ginger, five to 10 containers weekly and that is by trucks from Kaduna. So, this is the diversification we are still talking about. Now, we are still talking with NEXIM so that this dry port will be centre of export, which means we are going to have more amenities such as refrigerated warehouses for pressure of top agricultural produce. We also intend to set up a cluster of industries for packaging and processing of agricultural produce. So that we can put value on these exports before they leave. So, you would see that around Kaduna and the port, many industries will spring up and spread. You would also see that a port economy has been transferred to Kaduna. We are almost completing Jos and it is 75 per cent ready. Duncan Enterprises are the ones it was concessioned to in Jos.
We are talking with the NRC so that the rail siding will go in. The importance of Jos is that it is situated very proximate to the airport and you could use this airport especially because of the vast potential of Plateau State especially in potatoes, bananas and others. If you go to Europe, you find a lot of bananas coming from South Africa, they are found in retail shops in Europe. They get these products from KwaZulu-Natal mostly, which is 13 hours by air to Europe. I think from Jos it is six hours to central Europe so you see the competitive advantage that Jos has. When we do that, you will see that a lot of people will be employed, and you will see the impact. But in all what we do, the private sector is very important.
The TTP project is a modern transport infrastructure which aim is to ensure safety and security in the movement of goods from one destination to another. In what way will its success enhance the contribution of the transportation sector’s contribution to the country’s GDP?
For the TPP, we look at the employment content and the revenue local, state and the federal government will all have revenue from it.
The investors will also make their profit. We are going to give a lease for 35 to 40 years for investors. Anybody coming to Nigeria when they see our trucks parked like that they may be discouraged from investing. But when they see us in very stylish and productive way, that will be an incentive for them to come. So, the TPP has got extremely important lenders and investors. We have had many meetings with them. The state governments have been very helpful. They have given NSC land in Enugu, Lokoja and Sokoto because we are thinking of TPP in Layla along the Niger Republic border, which is what is also very important, and we are going to do that in many places. In Ogun state for example, there has been a tremendous interest. It is also the same in Oyo State. The truck transit park is a possibility and the moment we have that, our life is structured and our life is modern. Then there will be seamless transport system.
The thrust of the National Transport Commission Bill is economic regulation. This is also the main thrust of the NSC Act. For example, section 6 (1) (b) (C) and (H) of the NTC bill and section 3 of the NSC act 2004 have similarities of function. Why then is the NTC important?
The NTC has been passed by both Houses of the National Assembly. But there is a harmonisation committee of the two Houses working on it. But I think they finished working recently. Therefore, the bill will be brought to the two Houses for them to see if it was done well and if it represented various input and after that it will be signed. The reason for the similarities is historic: The NSC was setup in 1978 to be a regulator of the industry from the beginning.
The reason why it may not be emphasised is that government was handling all the transport issues such as the NPOs and other issues. If you look at section 2 of the NSC Act, it states that, “the function of the council is to liaise with appropriate arms of the government of the federation and other organisations in accessing stability and adequacy of existing services and make appropriate commendation on their behalf.”
We are also to see to matters of structure of freight rates, availability and adequacy of shipping space, frequency of sailing, terms of shipment, class and quality of vessels, ports charges and facilities, and other related matters.
Now, this is regulatory, we are also to consider coastal charges, inland water ways transport and generally relating to transport of goods. This gives us our regulatory functions primarily from beginning. It was a latent regulation, we were the same government, and the private sector was not there.
The issue is to enhance what shippers’ council does when the private sector stepped in. This was what happened when we were given the role of internal regulator. Therefore, there are similarities between the Shippers’ Council Act and the NTC Act, a lot of similarities.
This was why we said you cannot reinvent the wheel and we are happy that the both houses have resolved to make the council the nucleus of the NTC.
The main objective of the NTC Bill is to provide efficient economic regulatory framework for the transport sector, mechanism for monitoring compliance of government agencies, transport services providers, users and regulate the transport industry. This to my understanding will expand the scope. How prepared are you for this huge challenge?
We have been doing that even when we didn’t have express powers to do so and now we have the powers. We are really prepared. The council has the most trained staff in the industry. We have raised our capacity in regulatory issues especially in auditing of ports, auditing to see the efficiency of ports in terms of pricing and tariff mechanism. But you know the NTC is multi-sectoral, it covers all the ports, the roads, the rail and others. This is huge. What we do is to get the competence. This is why all the other agencies – Nigerian Maritime Administration and Safety Agency (NIMASA), NPA, and Nigeria Customs Service (NCS), all will have a stake in the NTC. The idea is to court people who are relevant in regulation and build capacity towards that. But automation is the ultimate thing. We are building the NSC council to be a paperless organisation. We are going digital and we are in the process of doing that to ensure that we are knowledgeable in the way the ports operate and the economy because that is the ultimate thing. If the bill is signed today, we are ready to take off and we will be able to discharge our responsibilities.
Despite efforts to curtail the excesses of foreign shipping companies, they still do not have regard for rules and regulations. For example, they have refused to set aside holding bays for their empty containers. What are you doing in this regard?
The rules and regulations were not spelled out in the NTC. It is not a ‘we’ versus ‘them’ thing. It is our duty also to protect the shipping companies and terminal operators because they are working in what could be described as an unhealthy and tough climate. Look at the roads issue for example, no matter how efficient a terminal is, how can they convey cargoes outside a shipping company when the infrastructure is not good. Government has been inconsistent for some time. I always argue that the case of Roro terminals that were lured to come and set up in Nigeria, only to have the policy of importation of cars that was enforced later and it affected their businesses. That meant they cannot fulfil their obligations in the concession agreement. So we look for the operators because the terminal and the shipping companies have changed the way we do business in Nigeria. In shipping, they have increased efficiency and made investment in the terminal and there is improvement in the turnaround time for ships.
However, we still have cumbersome clearing procedures which should not be the case. We should be automated so that people can clear their cargo from the port without going there. There are so many things we have to do and there must be reforms in freight forwarding.
I believe in consolidation of freight forwarding because freight forwarding is very important in logistics. We have to have tracking systems. The tracking system itself must be informed and I think that this is the next stage the NSC is going. The reforms have to be total and comprehensive. Therefore, for us to deliver a new port policy, there must be reforms and the NSC is already on that path. We want to clear our goods in a very good time in relations with our competitors. We are battling for Niger to have its transit cargo here. But they find solace in other climes because of the problems we are having here. So, we are trying to eliminate that and we are getting the cooperation of the NCS, which has been behind us. NIMASA, CBN, the Nigeria Economic Summit Group, the Manufacturers Association of Nigeria (MAN), NACCIMA, all of whom are members of the Board of Directors of the NSC. So, we are essentially economic regulators, we are not technical. The technical aspect is left to the various agencies there. We are concerned with the contribution of all these to the economy.
Also, stakeholders have accused the foreign shipping companies of insisting on the status quo because that is good for business. As the port economic regulator, what measures have you put in place to put them in check?
As an economic regulator, we have taken measures, you will notice some charges coming up to change what could be described as indecent practice. We have tried to curb those things. The shipping companies have to be ethical in the discharge of their duties. Here and there, something will crop up. For example, there are some terminals where it is wonderful to visit to see what is happening and there are those that are eyesore. For instance, they keep containers to attract demurrage and this is what we frown against because the port is not a storage place. Why we were doing that, the importers also allowed their cargos to dwell at the port because to them, it is cheaper than getting warehouse outside. We were the ones that introduced progressive storage charges because they will abandon their cargo there and it will bring congestion. In fact, cargo should not stay at the port for one hour, it should be on transit. So, you see there are both sides to a lot of things and the NSC is the umpire who coordinates everything. We have a view of what is happening in the port at any time and also, it is important that we talk to those shipping companies.
We have recently sealed one or two of them. What is more annoying is that they are doing what we banned them from doing. These are the black sheep among the shipping companies, majority of them have structure and system.
But stakeholders have also accused the Shipping companies of charging abnormal fees?
We have gone very far. The first thing is to look at these charges. If they are so many, we have to reduce and structure them in such a way, that everybody knows. The whole issue is transparency and these charges will be in the website of the shipping companies and terminals, so that investors, importers and exporter will know that what they will pay. So, everyone will know there are no hidden charges. Secondly, we have to give caps. We will not fix charges and say it is X amount you are going to pay, but within percentage one should not charge less than an amount and we should not charge above an amount. This allows for competition. Just like they have now, their charges are not the same. Some charge arbitrarily higher, while others charge lower to attract clients. That is how it should be, so when we do that you notice that shipping cost will come down. It is justifiable to increase charges and there are times when they decrease charges. Now, we have told them to decrease the port tax charge. We have told them to reduce it drastically by between 20-25 per cent. This is just an interim thing we saw because these charges were imposed without recourse to NSC and they are all ready to do that. Then we sit down and ask for their justification. All charges must be tied to the service you are rendering. We cannot have fancy charges that don’t constitute anything.
We understand you are signing an MoU with the shipping companies on this matter, how true is this?
We are working hard on the MoU. I think by July, we would have signed the MoU. Negotiation is going on with the shipping companies; we must first of all talk to our principal, the Federal Ministry of Transport and the stakeholders (the shippers, the freight forwarders, the manufacturers, NACCIMA and others). We will have stakeholders’ engagement.
But some of these companies are still charging illegal fees?
I think it was the port and harbour that was involved. We understand they introduced royalty and they are no more charging that. If all the companies are doing that, they have no choice, but to refund because those are illegal charges. We have enforcement powers and we are maybe reluctant to use it because this is business environment. But we will never hesitate to do what is right.
Give us more insight about the NTC?
The NTC as I said is multi-sectoral. It is time we place shipping in the context of economy contribution. It is an alternative and a source of diversification of the economy. As matter of fact, even the oil and gas depend on shipping. So, special attention must be given to shipping for diversification of the economy and revenue, efficiency, economic growth and employment. These are very key issues, which I think are important.
First of all, there will be coordination of multi-border transport system, inter-modalism. You have to have seamless coordination between the ports and the inland waterways, the railway, the road, the pipelines and any other means of transportation, including economic regulation in the aviation industry.
The NTC will be the coordinator and the superintendent ensuring that the potential of the maritime industry is realised. If this is done, you will have development in infrastructure, employment.