Galtima Liman is one of the very few professionals in the maritime sector who was and still is on top of the ladder. From being the pioneer controller, Apapa port in 1988, he became special adviser to at least two Directors General of the then-NMA. He is a politician, transport specialist and consultant to many private and public sector interests, within and outside the nation’s maritime sector. In this encounter with our man, Dapo Olawuni, he spoke on his key industry –centered issues.
What is your appraisal of the maritime industry in the past 50 years?
As a country, we tried to go the fleet ownership side which is the commercial side and it proved very difficult. When in 1987, the national shipping policy decree 10 was actually promulgated there was the Nigerian National Shipping Line which was government -owned and we had the Green Line, Capital Ocean Line and so on which were private sector owned, but then the problem we had was that there was tremendous amount of competition from the advanced maritime nations in terms of financial wherewithal and the managerial skill. Nigeria as one of those developing countries could not face the competition, as a consequence, the fleet development initiative blundered and later, the National Maritime Authority transmuted into NAMASA and now the Nigerian Maritime Administration and Safety Agency (NIMASA) so there is a lot more focus right now on the safety aspect of shipping than fleet development and that is basically where we are at the moment. As I am speaking to you right now the oil cargo is still being transported on free on board (FOB) basis which means that the transport leg that should have brought in local content is absent, we are an oil producing country and if you look at what is happening in other oil producing countries which have done very well, on that scale if you are putting Nigeria, it has not been quite positive.
Then will you say that Nigeria is truly a maritime nation?
The definition of a maritime nation is really quite comprehensive, the fact that you are a coastal state with more than 900 nautical miles of ocean, and the fact that you also have a tradition of shipping does not mean much. Mind you, it’s just policy summersaults that have brought in these difficulties; otherwise Nigeria had run a shipping fleet very successfully even though it was government –owned. Apart from the fact that there was globalization, competition and so many events that have taken place, it was government’s bureaucracy that was basically at the height of it all and the maritime administration could not cope. But, we are now looking at Cabotage and so many possibilities, so probably on the basis of that you cannot say that Nigeria is not a maritime nation, being in the category C of the IMO at least; it is how to move it forward that is most important.
As pioneer Controller of the Apart Port in 1988 what does your duty entail?
It was the implementation of the port level of the shipping policy to ensure that it was followed, it was the UNCTAD 40-40-20 code that formed the basis of the shipping policy in the country even though on the bulk trade it was the 50-50 code that was operating and when it came to government cargoes it was 100 percent assigned for the national carriers and there was the freight committee that was composed of the organizations that are in the transport sector; the shipper’s council, maritime authority and the ship owner organizations. So, once the decisions were made, they where communicated to the ports for implementation and the premier port controller is the one responsible for making sure that cargo allocation was done according to the letters of the law and at the same time we were the first at the port level to ensure that the tenets of the NMA’s 3% service charge was complied with. It was a very tall order but I can proudly beat my chest and say we were able to generate an unprecedented US$1.8million at that time and this formed the basis of the mechanism that is being used now by NIMASA to raise close to about US$100million out of which over US$75million have now been set aside for the shipbuilding fund, so basically this was what we were doing in 1988.
Whom where you accountable to then?
It was the National Maritime Authority, they have their port offices, but unfortunately the European Union did not allow the expansion because the decree was to give the NMA the possibility of having port offices worldwide; in places like Tokyo, New York, Marseille and so on. We went for training in Marseille in order to see the type of structures that were put in place and subsequently, the idea was for us to have foreign booking office but unfortunately this was not to be.
The port of 1988 compared to the port of today, what is the difference?
There is tremendous amount of difference, because those days the port ownership and operation was under the public sector management and the NPA was responsible for procuring cargo lifting operations and purchases and at the same time they were responsible for the super structures, dredging activities and so on. So the huge responsibilities was on the NPA, the economy was growing in terms of the impressive oil output, cargo import became very large and so NPA which was administratively a public sector- led outfit found it difficult to cope and this forced the Obasanjo administration to look into it, and some summations were made. I could remember our consultancy firm then working with the National Assembly in conjunction with so many others like the World Bank, the BPE and so on, they looked into it and the recommendation worldwide was that government should naturally act as landlord; leasing out to terminal operators, and this has brought in players like the AP Moler, the Greenview, the Grimaldi and so on, they are all there right now.
There could be a lot of efficiency; the argument has always been what happens to the tariff?
Based on this can, you now say that Port concession has been a blessing?
The whole idea was that we are supposed to have a harbour regulatory authority so that you don’t allow the private sector to metamorphosed into what is called private sector monopoly, and these are the anti trust policies that have worked well in the USA where you don’t have private sectors taking dominant positions like dictating and fixing charges. But here you have seen a lot of arguments where the Nigerian Shippers’ Council which are the custodians of the interest of the shippers have waded in and recorded like overN500 billion being saved as a result of illegal charges. So these are some of the constraints that had come up and at the same time we are not seeing massive development in terms of new ports. The economy is growing; no doubt, but if you look at it, it is still the constructions that have taken place in the 70s that are still on ground with few changes in terms of the equipment brought in by AP Moler, so we don’t see massive development in terms of port development to commiserate with that which have taken place in economy activities.
So what is your recipe for these problems?
It is a demand and supply kind of situation, what has happened in countries that have looked at port reforms particularly India, Brazil and other emerging economies is to make sure that while you are bringing in the private sector into port management, you do not make it possible for capital flight to be in such a way that the indigenous economy suffers, it’s a balancing act and much as you will like to see foreign investments coming in, you will also want to see a situation where commercial best practices are being monitored by port and harbour authourities that has the power to look at the kind of excesses and see whether or not the charges that are being placed on shippers are commensurate with the type that are delivered worldwide. Once you make the other arm of the port activities which is trade facilitation and make the port user- friendly, you begin to also attract cargo from other competing ports within the sub- region. Most important also, the internal infrastructure in terms of multi modal transport has to be seamless so that you will not just have a very good port but you need to also have consolidation centers like the Inland Container Depot (ICD). You can also have river ports which brings me to the dredging of the River Niger and so on, so it’s a whole gamut of activities that brings in what they call supply chain management and fitting- in into port operations. At the same time, we also need to have a national fleet, as I am speaking to you right now, I am not sure we have one standard vessel that is ocean going in this country and this is a big shame.
In view of all these, which is more pressing, the National Transport Commission Bill or the Ports and Harbor bill?
These things are all evolutionary and are positive developments, the whole idea of the transport commission with the shippers council transmuting into it was that we need a multi- modal seamless transport mechanism and if there is one body that could also harmonize the activities of all the various agencies, its key and positive development. A bill of such magnitude will take long in coming into force, for the simple reason that a lot of the interest groups will like to protect their windows of opportunities and so on, but the greater consideration for the economy will hold sway, it’s an idea whose time has come in the light of the issue that right now maritime shipping, land transport and all the rest are looking at one single supply chain and so having a government agency that will supervise this with specific mandate on how to monitor and how to positively implement the findings of the various interest groups and stakeholders is very key. The ports and harbor bill is basically a sub- unit that would look at what is happening within the port because the port is just a link in the chain, if we now have a transport commission invariably you are now going to look at the inland waterways system and even the pipeline system as part of the multi- modal mechanism. You need to have one supervisory body that does this for efficiency.
As special adviser to two Director Generals of the defunct NMA, what does your job entail?
It’s more or less like the technical adviser trying to look at the overall policies and objectives of the organization. And sitting strategically in the office of the chief executive, you will be able to help him in the formulation of policies that could expand the frontiers of the objectives of the maritime authority and this we have been able to do in terms of raising the profile of the organization, we have been able to raise the income of the organization together with the various directorates. At that time, we had the Ship Building and Ship Acquisition Fund in terms of giving out loans to various national carriers, so we had very serious role to play in the International Maritime Organization. And we were also into a lot of negotiations then to safeguard the sanity and integrity of the organization because the advanced maritime nations never really wanted the existence of that organization and so there were a lot of negotiations and this took a lot of the time and efforts of the maritime authority. I am not surprised today that the element of the commercial aspect of shipping which ought to be on the front burners is today relegated and the organization is gradually turning into just a safety agency instead of a fleet commercial agency and that is a shame.
Can you tell me why one of the DGs that you worked with Alhaji Munir Ja’far was removed from office?
He just finished his four- year tenure and that was basically what happened, he was never removed, he was considered as one of the finest and amiable directors general that brought in a lot of sanity in the industry, he has a very good reputation.
I was told it was because of disparities in the disbursement of the ship acquisition funds
That is not true, he served the organization very well and he left with a very high reputation, the other director general; Buba Galadima left because there was change of administration from Abacha to Abdusallam, and having come from an appointment from Abacha, he never had any problem and neither did Buba Galadima.
Why was it difficult to get the repayment of the ship acquisition loans which were granted, I understand that most of them never paid back?
Initially they were having some difficulties, but let it be put in perspective here that the bulk of the ship building and acquisition fund actually went into the Nigerian National Shipping Line (NNSL), the records showed that over US$56 million or thereabout was used because most of the ships were detained in various ports and it was serving as an embarrassment to the Nigerian nation and there where specific directives from the Head of State at that time that funds from the NMA should be channeled to defray the cost of some of these charges, most of the ships were billed for judicial sales abroad and this was not in the best interest of the image of Nigeria, so substantial amount of the money went into NNSL.
With all these funds, why did NNSL still go into liquidation at the end of the day?
It was because the fund was still inadequate and NNSL required a lot of funding and a change in the management scheme from public to private sector.
Where the SASBF loans securitized?
They were, because thorough search was done on most of the companies that got those loans then and they were dully recognized national carriers, they have their offices and their own staff. The problem has not really been the question of disbursement or lack of repayment; in my own opinion the funds are inadequate for the purpose. I am not sure more than 70million dollars was disbursed and the bulk of that money went into NNSL, and when you now look at a situation where for a shipping company to say it is in operation, it must have three ships on ground, one in the low port, discharge port and one you can call on the high sea anytime you are having a problem before you begin to charter it, you know what I am saying. I am not sure of the price of a container ship today, but on the average they are about US$100Million, and when you talk of three ships its US$300Million, what about support facilities? So for you to talk about ship operations, you are talking in the magnitude of having about a billion US dollars. This is the kind of funding that will begin to make sense, and this explains why most of these developing countries find it difficult to have ship financing mechanism, its quite a capital intensive mechanism.
So how will you advice NIMASA to go about with fleet expansion?
I am looking at the same mistake in the Cabotage Vessel Financing Fund, because NIMASA is now about to disburse US$76Million for Cabotage vessel financing. In my opinion, that amount of money ought to go to not more than two companies with the contract of afreightment guaranteed and this is the way it should go. With these contracts you can bring in a first class vessel and basically the Cabotage was meant for the oil and gas sector because it’s a high volume and high freight business, so if you have a charter contract with any of these oil majors, you can now bring in vessels that are world class with the financing option from ship yards. If we have two very solid competing companies that takes into consideration the national Interest and the indigenous capital fleet interest, employment generation, using best practices with people of integrity, it will go a long way, but my fear is that it is going to be politicized, it’s going to be some few dollars here and there to different companies and at the end of the day what are we going to have? I hope and pray that this does not happen.
What will you consider as the most important achievement of your NMA regime?
A lot of people said we did well at the time and I will also congratulate ourselves for the efforts we put in. I think what drove the mindset of the maritime authority at that time was the patriotic zeal and the major thing that was a concern for us at that time was the fact that we were able to generate close to US$90Million for ship building, our sadness was that we have not been able to utilize that money in terms of fleet development and there was nothing we could do at that time because it was a military dictatorship that gave the command that such fund should go to NNSL and there was nothing we could do but to comply. This was the low point of my carrier because our imagination was that with that amount of money, we will have been able to have substantial amount for yard financing so that we will be able to develop the shipping fleet in terms of RoRo vessels, container vessels, tanker fleets and so on.
What is your assessment of Cabotage implementation so far?
The point is that when the Cabotage policy came into existence, it was also frustrated by the overall trade policy of Nigeria. The implication of this is that by the time long term contracts in the oil and gas are done on-behalf of government by the NNPC with their joint partners, the freight element that would have accorded the local content the capacity to charter vessels is frontloaded in favour of the supplier abroad. So by the time NIMASA comes up with the support of the Cabotage law, the cargo is already delivered to site and freight has already been earned, and when it now comes to the coastal movement, the reality of the oil and gas is an integrated economy, from design stage to exploration, exploitation and refining is more or less dominated by the international oil companies who are the operating partners. Much as the Cabotage regime will wish to push the fortunes farther, the indigenous competence is being frustrated by the lack of the Petroleum Industry Bill, the local content element itself requires the PIB. The Cabotage is also frustrated by waivers and so the five years of implementation have not been able to achieve the kind of objectives set to achieve because you need to also look at the freight terms and the economic melt downs where most of the commercial banks are ill- prepared for long gestation projects like that of vessel financing; mostly they give three months window with a very high interest rate and most of the companies that were complaining and which went ahead to even procure ships could not have contractual commitments from the international oil companies or the NNPC to enable their vessels to be used. So these are some of the experiences that have to be looked at very seriously.
What is your reaction to the clamor by stakeholders that only transport professionals should be made minister of transport?
At the level of ministerial appointments is mostly managerial, the technical skills can help, but they are not basically immersed in it, these are political leadership positions and it now depends on how you harness man, money and materials, it does not necessarily have to be a transport guru.
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