Hassan Bello is the Executive Secretary/CEO of the Nigerian Shippers Council (NSC), a regulator and facilitator of the Nigerian maritime industry.
In this wide ranging interview with MoneyCentral’s head of business development and strategy, AZARAT HARUNA, the CEO explains how the NSC is helping to grow the Nigerian economy through shipping. Excerpts…
The Nigerian Shippers Council (NSC) is probably one of those Federal Government Agencies that is not clearly understood by Nigerians. What exactly are your functions?
We are an agency of the Federal Ministry of Transportation, and our mandate is dual. First of all, we are trade facilitators as far as the transportation aspect of trade is concerned. Secondly we are a Port economy regulator, which means we are striving to ensure that there is efficiency and transparency and competition in Ports and other services.
Transportation is key to any economy and it is the duty of the economic regulator to ensure that transportation is efficient, transparent and make sure that it has the expected contribution to the economy.
The Nigerian Shippers Council (NSC) is the superintendent, coordinator, facilitator, arbiter in all transactions if they are commercial. We are the regulator that has the mandate by law to ensure that the maximum contribution of the transportation industry to the national economy in terms of infrastructure, employment and seamless transportation so that goods are delivered at reasonable speed and cost.
We are therefore mindful of tariffs and moderate tariffs and make sure tariffs are not arbitrarily laid or unilaterally placed by operators, we make sure that there is reasonableness in freight rates and tariffs and no agency can increase tariffs without Nigerian Shippers Council negotiations.
We are the ombudsman in the industry and our mandate is not confined to the nautical or maritime sphere. We are also in land transportation, we are in rail transportation, we look at the economic issues in inland transportation like water transportation.
As a major regulatory agency for shipping in Nigeria, what do you think are the major issues hindering the growth of shipping in the country?
There are a few things. The first being infrastructure failure which has limited shipping to be more attractive and limited efficiency. For example, no matter how efficient a terminal is, it cannot get the goods out to be delivered in good time simply because the roads are not there.
That is one challenge, we need modern infrastructure, we need access for our goods to be delivered to the Ports, in and out, therefore our reliance on road transportation alone has cost us majorly in the industry.
Number 2, the process and procedures are not automated. Even though the NSC has pushed so hard so now the terminals are responding favorably to automation. Unless we automate our processes, we will begin to encounter international failings, such as the dwell time of cargo which is 21 days in Nigerian ports, compared to 7 days in ports in the West African and African region.
Don’t forget we are in competition with those ports, and the shipper is the one who determines where his cargo should be taken. That decision is an economic decision and he will weigh and compare to see where will I get my cargo out in a few days, how many documents do I have to sign, what is the bureaucracy, what is the burdensome nature of transactions in Port A or B.
He will weigh the options and decide what makes economic sense for him. In that regard it will be good for us to automate our ports so that you now have contactless ports.
If you go to a Nigerian terminal you will see 100 people all milling around, making the Ports unsightly and corruption prone, because it is the contact that brings about corruption.
But if we automate our processes, payments done online, checking of bills of laden and other transactions are done online then it will be efficient and means reduction in costs and ease of doing business.
How can the country solve the ever vexing problem of traffic gridlock in Apapa and its environs as well as improve productivity at other Ports in the nation?
The traffic gridlock in Apapa is an embarrassment and a tragedy. This is because of bad policy and lack of planning. We had relied so much on the road transport system alone. Road transport is not adequate for a Port to function efficiently, which means goods must be delivered and evacuated in an efficient, regular and predictable manner.
This is what we lack because the roads cannot do it alone, and because the roads have failed you can see the outcome. We need a multi-modal approach, and the Nigerian Shippers Council has helped by saying all ports and terminals, including inland Ports must be linked by rail so that goods can be evacuated by rail, which is safer, cheaper and more predictable to do that.
What role does inland river ports have to play in the development of the country?
We have the inland waterways which are very important. We now have the barges, and we are looking at increasing barge operations. We have held several meetings with the Nigerian Ports Authority (NPA), and National Inland Waterways Authorities, trying to regulate the operation of barges, so you have maximum safety, insurance and so on.
What is more important is that all the terminals will embrace this multi-modal approach. So if you have the roads repaired, plus the rail and inland waterways, then the congestion will naturally disappear, and then you can begin to measure the efficiency of each terminal.
This is because this congestion has distorted everything, and brought high cost of doing business, not because there has been any meaningful or substantial increase in charges, for 9 years, but what you have is the under the table charges, which makes Nigerian Ports very expensive.
We are also looking at corruption, you may recall that the Federal Government 3 months ago appointed the Nigerian Shippers Council as the lead agency in coordinating the whole agencies at the Ports so that the port processes, the standard operating procedures, every agency in the Port will be supervised and coordinated and through that we are going to eliminate red tape, corruption and inefficiencies.
This is already beginning to happen, we have arrested so many people taking bribes at the Ports, working with NDLEA, ICPC, NPA and so many others to sanitize the Ports, to make them a veritable source of revenues for the Government, to simplify our procedures and process so that we can have efficiency and to make sure there is competition between the privatized terminals.
How can we make exports flow more easily through our Ports? It seems like there is a disincentive for exporters through the Ports even though we need the Foreign Exchange?
There are a number of things we have to do for exports. First of all is identification of commodities that you have strength in. Then you have to re-orient the economy towards being conscious of exports.
Even our terminals are not configured for exports, the reason being that we have been importing forever. The NPA has prioritized exports, the NPA is also looking at export terminals.
Then we should have access to the Ports, because when you delay the owner of the goods overseas will not be happy and will look for alternatives. The factory owner overseas relies on predictability and certainty. Don’t forget we are in competition with other countries.
Nigerian Ginger for example is in high demand, but it is costlier to export Ginger in Nigeria than in Mexico this is because of the inefficiency of the logistic chain.
We must make sure that from the farmland to the ports the chain is efficient. Our exporters need access to markets and access to finance for exports and logistic chain. We need a holistic review to make this happen.
What is the role of Public Private Partnership in developing Nigeria’s shipping?
That is an important question because the government alone cannot provide basic infrastructure and amenities for its populace.
The government is facing competing needs from many industries. Its revenues are dwindling due to the vagaries of oil price.
Therefore, there has to be a partnership between the private and the public sector in propelling the economy. For example, the public sector allocates land that is free from encumbrances; it also creates a conducive environment for businesses to thrive.
On the other hand, the private sector provides the fund and uses its experience to run transportation facilities. That is the nature of it.
For example, we are developing two deep sea ports in Lekki and Ibom. These are done under the Public Private Partnership (PPP) bases.
And you will see the effect when the Lekki Deep Sea Port is completed by 2023. It is going to fundamentally change Nigeria’s fortunes because it underlines the country’s ambition to be the economic power in the region.
It is important this is done under PPP. Interestingly, the same thing can be said about our dry ports. All the dry ports are in concession to the private sector while the government will provide infrastructure and render many other assistance, but it is the private sector that will run the operations.
So, PPP is thriving under this administration. The Nigerian Shippers’ Council is working with Infrastructure Concession Regulatory Commission (ICRC) and the private sector to deliver modern infrastructure under the PPP bases.
What would you say has been your greatest achievements and challenges as Chairman NSC?
My greatest achievement is to bring out the best in our staff. I am happy to have diligent hard-working faithful staff who understand the metric of transportation and its importance to the economy.
Here, we have well educated staff, the best in the industry. And that is my pride because they have been able to deliver infrastructure.
They have been able to change the processes. We follow the trend in the economy and we know what is needed. And for that we are very proud of ourselves.
How do we stop capital flight and foreign ship owners?
There is legitimate capital flight and illegitimate capital flight. The management of Central Bank of Nigeria (CBN) and the Nigerian Shippers’ Council are working assiduously hard to curb some funds leaving the country as capital flights.
We have saved billions of Naira for the central bank because every transaction on freight and charter parties must be sanctioned by the Nigerian Shippers’ Council.
We must research and find out how much it costs to bring in containers from China to Nigeria. Some will inflate the price and take the money out of the country, but we have stopped it.
Again, there is the issue of demurrage. We have to take a critical look at the legitimate demurrages with a view to saving the country from illegal capital flight and loss of revenue.
How can we make our ports more competitive compared to other neighboring ports in the West?
We must automate the ports. A lot of payments are made online. If you automate the ports, the charges will come down, and that is what we are doing.
Now, there are efficient terminals. You know, there has been remarkable improvement in the level of efficiency in ports services, made possible by digitization.
And that saves cost. Transactions are processed with speed. The process of evacuation of cargoes, the boarding of ships and all those tedious things should be done through automation. It is faster and more transparent. It reduces delay and minimises wastage.
What legacy will like to leave behind?
I just want shipping to contribute more to the economy. I want us to one day close all the oil wells and concentrate on shipping.
I want the shipping cost to be reasonably determined. I want democratic regulations where all stakeholders will come and determine the polity.
I want shipping to employ 750,000 people at Lekki deep seaport, and a similar number at Akwa Ibom deep seaport, 50,000 in Kano, and 70,000 in Aba dry port.