Recently, many maritime stakeholders have expressed concerns over the lack of a ministry solely dedicated for maritime businesses. The trend has been blamed for the near-insanity currently beclouding Nigeria’s maritime sector. In this interview with SAMSON ECHENIM, frontline shipping industry player, Iju Tony Nwabunike speaks on the performance of Nigeria’s maritime industry in 2019 and how to reposition the sector and maximally exploit its potential for development, among other issues. The Mac Tonnel Nig. Ltd CEO and national president of the Association of Nigerian Licensed Customs Agents (ANLCA), also suggests ways Nigeria can harness opportunities to become a port hub for neighbouring landlocked countries.
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How would you assess the performance of the maritime industry?
I will start by saying that too many things happened last year. Many maritime policy decisions were taken by the federal government and so many guidelines were changed too. The industry experienced a different level and pace at which things happened and there were network of new ideas, new hopes and new dimensions to businesses.
Last year we had new members offering for the Council for the Regulation of Freight Forwarding in Nigeria (CRFFN) and this marks a new beginning for freight forwarders. For more than seven years now, we never had freight forwarders at the council.
We also have many terminals coming up and works on more dry ports peaked during the year. The Kaduna Dry Port which was commissioned in January 2018 peaked up many businesses came up there.
In the area of government policies, we had the government decision to close all land borders in August and this had another impact on freight forwarding and maritime industry. Other policies that affected the maritime industry in addition to border closure and dry ports openings are improvement in the eastern ports. For the first time, the ECM Terminal in Calabar port received containers.
The border closure had effects on freight forwarders, the economy and on individuals. Also in 2019, the AfCFTA was signed by President Muhammadu Buhari, making Nigeria the last country to sign it after Eritrea.
We have very high level of maritime industry activities and events. We also had the Chartered Institute of Transportation approved by the federal government through the legislative arm of government. We also had NIWA and its new MD coming with his new ideas and some scuffles between NPA and BUA Terminals and OMS on maritime security. So there are so many developments that shaped the industry last year.
We had the Nigeria Customs Service closing car shops, telling to review the tariffs they paid on the imported vehicles and pay more to meet obligated trade requirements. We also saw the federal government encouraging local rice farmers to end importation of rice and other food items. So, with all of these happening, we can say there was a beehive of activities in the maritime industry and this does not include the cabotage activities in the waters.
Some experts have suggested that Nigeria can actually become a trade hub for West and Central Africa if she harnesses her dry port opportunities to serve neighbouring landlocked countries. How can this be done?
Remember that the president opened the Kaduna Dry Port on January 4, 2018. The onus is on the Nigerian Shippers Council to sensitise importers to begin to use the dry port. The dry port is ongoing now, though the patronage is not as we expected. We can look at the problem critically from two angles. Firstly, the true bill of lading has not been effected by shipping lines coming to Nigeria. The dry port is a port of origin and final destination. What this means is that the bill of lading will be to the dry port because cargoes are meant to go direct there. But the shipping companies which are supposed to do their bill of lading to the Kaduna port have their reasons. They said land freight transportation is very difficult for them to ascertain, unlike the sea freight. For instance, shipping companies can easily charge for cargoes, say, coming from America or China to Nigeria; they can say $3,500 for a 20ft container, but they cannot ascertain how much a truck will take the container from here (Lagos) to Kaduna. So, this is discouraging them from doing the true bill of lading and what they are trying to do is to bring it down here and clear the goods, which negates the principles of dry port and international trade.
So, we are looking at a situation where we can have a total logistics, where from point A to point B goods will not be tampered, vis-a-vis the area of transportation.
Secondly, another reason for low patronage is most importantly, the neighbouring countries like the Niger Republic and Chad, who really want to use these terminals are saying that all the federal government agencies and their charges should be totally reviewed. They agreed that getting their goods from Lome in Togo to Niger is almost 2,000 kilometres and from Kaduna dry port is just about 500km, but they are concerned about the cost implications. So, they don’t have any reason not import through Kaduna if the cost is cheaper and their goods are safe. These are the areas we were working on before the closure of the borders. I think that when the borders open and the true bill of lading start working, the dry port will bounce back.
If this is the case, what is the promoter of dry ports in Nigeria, the Nigerian Shippers Council doing to ensure that the true bill of lading is generated for the Kaduna and other dry ports?
Of course, the council is working hard on that. I am telling you all this because I’m inside the business so I know the issues we are having. The issue is that to encourage businesses and importers to use the Kaduna dry port, they have to be assured that the true bill of lading is going to work and they will have reduced cost incentives
People like me travel to Niger and Chad to discuss business with them. They are ready to come in and use our port, but they want us to put up a platform that they can see and compare with what they already have. One big advantage for us is that our port is nearer to them, but they really want to know the actual cost for them. Will it be cheaper to use the dry port in Nigeria? Is it safe? How about the security of the goods and services? How about the government agencies…their relationship vis-a-vis the transit goods. Now that the border is closed, automatically, nothing will happen, until it opens.
Despite obvious potential, the maritime industry has not been able to contribute meaningfully to the country’s GDP. How can we make the sector to contribute meaningfully to the economy?
First of all, this sector needs a total reorientation. It needs a total overhaul. The sector needs government to think out of the box and do something new and drastic. People do say that after oil, the maritime sector is the second largest revenue generating sector. But both of us can understand that we need a whole lot of reorganisation in this industry. Our expectations, orientations and attitude to work must come to play. For instance, sometimes, we say the Customs revenue increase by N1.2 trillion etc all these things we dont even know if they are true. Put it in cost effects, how do we do Customs performance? Take for example, we get N2.3 trillion at exchange rate of N360 per dollar, compared to N960 billion at the exchange rate of N160. You find out that that value is almost same in 2014. You find out that nothing has really changed, except that N2 billion in 2014 is actually bigger than N2 billion now. So, we need to reorganise our system, rejig the way and manner people in the industry reason, especially people putting a kind air where every agency wants to be in charge of the maritime industry. The ministry of finance will tell you they are in control; the ministry of transport will say they own the ports; the ministry of health through NAFDAC is also clamouring to control the ports. There must be a particular ministry that will supervise all the functions of these ministries at the port. I am just thinking allowed. We must have a ministry of maritime resources so that we have where to channel the problems to and have solutions coming from it. Most importantly, it is the institution to hold responsible to that effect. Some countries have a ministry of maritime and I think Nigeria should as well think towards that direction so that we can have sanity in the industry and some sense of responsibility from the ministry in charge.