Major Henry Ajetunmobi (Rtd) is Executive Director of Sifax Haulage, a subsidiary of Sifax Group. In this interview with Shipping Position Daily correspondent; Dapo Olawuni last week at his Ijora office in Lagos, he talked about the challenges confronting terminal operators with regards to the prevailing Naira-Dollars exchange rate. He equally proffered solutions to a number of issues; including how to get back Nigeria's transit cargoes.
"The concession agreement entered into in 2006 made provisions for periodic review of port charges"
About 10 years after port concession, would you still say it has been a success?
Naturally the answer is yes, but it has to be explained. Before concession, it was a common experience by all port users, the dwell-time and turnaround time of vessels at the terminal was high, there was uncontrolled human access to the terminals, in fact, it would be right to say that before port concessioning, most of the ports in Nigeria were not customer-friendly, you had to pay both official and largely unofficial fees to get services. We would not easily forget that era, and this was what led to government having a re-think that there is no future if they continue with that kind of system. Today, the best advertisement for our port system can possibly come from the mouth of the port users themselves; the rowdiness at the ports has disappeared, in those days it was common to talk of dark spots in the port, these were the haven of port rats and other hostile port elements, but today, these features have disappeared completely. If you look at the cargo throughput, the number of ships that call at our berths, if you look at key efficiency indicators like customer friendliness, turnaround time of vessels, security of cargo and equipment, opening up of the terminals in terms of lighting, you cannot but say that concession is a good wind that blows everybody well.
Are we where we ought to be now?
The answer is No; this is because the expectations that came along with port concession are still far from being fully met. Part of the expectations of the port reform is that services rendered to users will come at a cheaper rate, but this has not been realised, why? One of the reason is that the cost of efficiency has become a burden on the terminal operators themselves rather than something that should be shared by all the key players of port reform, the key players are; the terminal operators, the shipping line, and principally the government itself, it is like a chain, if the link of chain is not efficient, it affects the entire chain. In other words, however much the terminal operators invest in the port system, if the other key players are not at the same pace adopting the principles of reform, so much would not be achieved. Take for example a government agency like the Nigeria Customs Service, the expectation of port reform is that there would be 24 hours port operations, but because of so many other ancillary factors like the security system in the country, trying to achieve 24 hours port operation would still be an uphill situation. For example, no bank in Nigeria would want to operate late at night, there are other segments that can operate for 24 hours, discharging of vessels could be done 24 hours, but if you now say that importers or their agents should take delivery at night, nobody would want to take delivery by 12midnight. Another reason port efficiency has continued to be a mirage is the mode of evacuating cargoes from the port, we are yet to get it right as a maritime nation, we have multi-modal means of evacuating cargoes from the port, but for reasons peculiar to us, we over-concentrated on only one mode to the complete neglect of the others, why are we concentrating on only the roads? What happens to barges and railways? Maritime nations all over the world don't limit themselves and thus precipitating problems for themselves in terms of cargo evacuation.
Why are Nigerian ports so expensive in terms of charges
Again, there is still a knotty issue that required constant meetings and negotiations, one of these is port charges, it has to be a product of negotiation, and the concession agreement which all the terminal operators entered into in 2006 made provision for periodic review of port charges, this is because the economic factors that determines charges are quite dynamic, you cannot say because you fixed charges five years ago, then it must remain so this year. One other consideration which most commentators tend to miss is that there is no clear distinction between port costs and port charges, port costs are much more than port charges, under port costs, other factors come into play like un-receipted payments that comes in the course of business. Port cost is the totality of what it takes for a person to get his business done at the port, this is beyond receipted payments, this is the greatest headache.
Who do you think should tackle this problem?
It is you and I. What we have in the port system is a microcosm of what goes on in the larger Nigerian society, why do you think that these faceless transactions which is the ultimate that everybody wants, why is it difficult in our country? It is because these things that result in port cost are not done away with, why must I see you before I clear my cargo?
We have an economic regulator that is supposed to check all these, what is your assessment of their performance?
By law, the Nigerian Shippers’ Council is the port economic regulator, and it is a task for which all players really need to help them, it is an uphill task, they want to set down a number of rules and regulations to ensure fairness to all parties and ensure enhanced efficiency of the system. It is a call for them to really spearhead a shift in paradigm from the old ways of doing things to the new; this takes time, so one needs to be patient with them. The first thing is acceptability, how well are they accepted? Today it is the shippers’ council, tomorrow it could be any other agency, but whatever it is, they would face the same set of challenges; getting the industry acceptance of that regulatory role, the shippers’ council is trying to create order out of dis-orderliness, and dis-orderliness has a way of fighting back so we much be patient. For the Council to really discharge it's regulatory responsibilities, their role must be accepted by the key players in the industry.
How can Nigeria get back its transit cargoes to boost our economy?
In international trade, over 80 per cent of the world trade cargo is moved by sea, this naturally confers advantages on littoral states, but the mistake that so many people make is that, the mere fact that you have a body of oceans does not naturally transform you to a maritime nation, you need more than the presence of water, if you don't harness these maritime resources, all you could claim is having oceans. With what nature has benevolently granted Nigeria as a nation, how many ocean going vessels have we put on the waters? If Nigeria has ocean going vessels on the waters and berthing at our ports, naturally, these land locked countries’ cargoes would be brought by our vessels to our ports. We cry and pray and claim to be the hub in Central and West Africa because we have a body of water, but what is our level of utilisation to ensure that these other countries continue to depend on us? What is the level of the efficiency of our road network to neighbouring countries? What is our level of security in the movement of their cargo by road? What is the level of our infrastructure that will encourage them and give us a competitive edge over some of our rival port nations around us? There is no sentiment in business, I dare say that no landlocked African country neighbour of ours will continue to do business with us because we have the largest population, it is that it pays them to do business with us, if the security of their cargo is threatened at our ports or along the transfer corridor, if we cannot guarantee them basic amenities, if they decide to patronise a smaller nation that have succeeded in putting their acts together better than us, they will go to where there is the least cost. So until we are able to address that additional cost of doing business, we cannot even convince our own nationals to bring cargoes to our ports, a business man would always want his cargo to go to where the price is cheap. If we get it right, even if the countries that do not really like us, but because of the profit guaranteed to them in the course of their business, they will patronise us, it is not about sermons.
How have Sifax Group been coping in the face of recession, has there been retrenchment of staff?
No. The reason is more to the magnanimity of the chief investor, there has been a downturn in maritime operations and activities, recession simply came to worsen it, it has not been easy, the first symptom that maritime operations have become a difficult affair is the exchange rate, many of our obligations are to be effected in the US dollars, suddenly there is a complete deregulation of the sector, suddenly there is a drying up of the sourcing of dollars through official channels and yet you are still expected to service your obligations in the same US dollars, most procurement activities in our maritime sector is denominated in dollars, even the obligations to the NPA, they still insist on getting paid in dollars, how you get the dollars is not their concern, this is really tough for us. One other indicator of the struggle is the near emptiness of the terminals, most terminals at the port are empty, if you are on the marina and you take a look at the berths, you will equally see the emptiness at the berths, this is to show you that things are not well. So how can a dynamic and creative terminal operator pass through these challenges without retrenchment of staff? This remains a big challenge, but this is a kind of situation that separates the boys from the men.
As Vice Chairman of the Port Consultative Council, what advisory role is Council playing these days, it seems to be docile
The Nigerian Ports Consultative Council (NPCC) is the oldest advocacy group in the country; it is as old as the Nigerian Ports Authority established by the Act of parliament in 1953. It has done quite a lot and it is still doing a lot now, the only thing is that the operating environment seems to have changed in Nigeria, it is only the noise makers that carry the recognition and accolades that it is working. But if you look into the library of NPCC, if you look at the number of maritime challenges that it has conducted researches on in the last 12 years, you will be surprised that most of the problems that maritime Nigeria is still struggling with today had already been seen by the council and it had carried out highly refined intolerance into it and had come out with an array of solutions, both long term, medium term and short term. Even the deep seaport establishment that everybody is talking about today has been researched, maritime security, and the gridlock along the port corridors have all been researched upon with solutions. But the Council is an advisory group, so the main outcome of its efforts are targeted at the NPA and the Ministry of Transportation that are saddled with management of the industry, so the general public may not know about all these.
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