By Samson Echenim
The certainty associated with having a benchmarked transportation cost will help investors make a more accurate decision in determining their transport cost element and the presence of this in Nigeria’s economic climate will encourage foreign investors into the country, Hassan Bello, executive secretary and CEO of Nigeria’s Shippers’ Council has said.
Bello spoke to business a.m in his office in Apapa, Lagos, following the council’s release of a harmonised and indicative freight rate for transporters lifting goods from the seaports.
“The indicative freight rates will bring certainty into Nigeria’s transport cost element when making investment decisions and this is one of the things that determine the ease of doing business in a country,” Bello said.
“If we have it, both foreign and local investors can now have a benchmark for their transport cost element when they want to invest in the country. They can determine that this is what they would be spending on transport when they begin to operate. There is nothing strange in it. We can’t go on without any policy plan as we were doing it in the past. We cannot say, oh, an investor is asking how much it will take him to get a truck move his cargo from Lagos to Owerri and he comes up blank; that there is nothing to point to his transport cost. He has to have something to point to his transport cost direction,” he said.
The announcement of the new freight rates was met with opposition by some transport services providers at the port, under the aegis of by the Association of Maritime Truck Owners, AMATO and Council of Maritime Truck Unions and Associations (COMTUA), who said government must provide needed infrastructure before attempting to regulate transport cost for private investors.
“The concerns are there: infrastructure, we are talking of accessibility to the port. Infrastructure such as good road, how the trucks can get into the port easily without hindrances. We have been on this issue for a long time. We have seen that the federal government is doing a lot in the area of road infrastructure,” Bello said.
However, the Shippers’ Council chief stressed that the concerns were already being taken care of by the government, maintaining that the new freight rates were recommended as indicative and not forcing operators to adopt a particular rate.
He explained, “There are so many road rehabilitation and dualisation projects going on now across the country. Look at Ilorin-Jebba Road that has been bad for a long time and now getting attention. Look at Kaduna-Kano Road, Maiduguri, Aba-Portharcourt Road, the Lagos Ibadan Expressway and many other roads. There is also the second Niger Bridge in Onitsha. Federal government is putting so much funds on these road projects. So, on the need for the transporters to have a regulated freight rate, we cannot sit and wait and say until we have good roads 100 percent across the country we should not begin to do or work on other aspects that need to be worked in terms of regulation. Let us start doing what we have to do.
“What we are trying to say is this: for investors to come to Nigeria, they have to have certainty; they have to have assurance to be able to plan well. For instance, they should be able to predetermine that these are rates for hauling their goods from Funtua to Ibadan. They have to be able to figure out the transport cost in their business plan. So, that is what we are doing and these rates are indicative. They are not compulsory. They are for guidance. Shippers Council will not force these things on anybody. We have caps; we have a range, say between one cost figure and another, which should be the highest. After all, demand and supply and economic issues will determine the charges for transporters but we need to indicate that this is the range.”