Cabotage Review Will Address Anomalies in Coastal Shipping Regime
Director-General of the Nigerian Chamber of Shipping (NCS), Mrs. Ify Akerele, speaks with Francis Ugwoke on how the current efforts to review the nation’s Cabotage law will address all the inadequacies of the coastal shipping regime, among other industry issues. Excerpts
Onitsha River Port has just been inaugurated and others are expected to follow, but the fear among industry stakeholders is that these River ports may not be viable after all for a number of reasons, including security and poor infrastructure challenges, what is your take on this?
The River Port in Onitsha has huge potentials of being viable. But as you know, everything in Nigeria is linked to many other factors. It will definitely ease a lot of traders’ nightmares of having goods from Lagos by roads. For example, what 15 trucks can bring down just one truck can bring that from Lagos or Warri to Onitsha. If you talk to people in haulage business, they will tell you that their most vibrant route is Onitsha. Everything that comes from China and all over goes to Onitsha and where there are people, there is trade, there is money.
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So that port definitely can be viable. What we pray for is the willingness; government has shown a very encouraging step by ensuring that the waters are dredged to the draught of 2.5 metres. But of course, somebody is going to manage the port. Now, ICRC is carrying out their investigations and putting together terms of concessioning. But it also involves constant dredging of that water to be able to manage that port to make it viable. It is going to be a responsibility because you have to constantly dredge.
I don’t believe government can maintain constant dredging, so that is one area that is going to gulp a lot of money from whoever is going to manage the port. Bringing in goods from Lagos is something I am still trying to figure out. It is doable to take goods from barges here (Lagos) and go along the coast into the hinterland to Onitsha. But how possible is it with regard to safety? We have the Navy again to be involved to protect the waters. They have quiet waters offshore Warri and Port Harcourt.
Will modern vessels go there, will people like Maersk go there? How are we going to persuade traders when they are sending their goods to Nigeria to put as their final destination Onitsha. This needs a lot of awareness creation, understanding a lot more effort by major stakeholders and government regulatory bodies, NIWA is responsible and I believe they should be able to live up to expectation in this regard. If all these things are put into place, the sky is the limit for the River Port and Inland Container Depots (ICDs) which will now become alive because people will find a use for the ICDs. But right now, we are still using the old-fashioned Lagos ports with the attendant risk of containers that may fall on the road. But if Onitsha is put in use, it is a viable project.
Some people believe that some of these containers could be hijacked on their way to Onitsha. They still feel that the cost of bringing these containers could be higher than it could cost by road, what is your reaction on that?
It is still not very safe driving on the road because you could still be waylaid. It is probably difficult to transport a container by road. By river those who want to hijack a container also have to have their own barges or have their own means of taking the containers. I am not sure that will be a problem. I don’t know of it being very expensive, but if one truck costs the same as carrying 20 trucks, you work out the economics, carrying 20 containers by barge is cheaper than carrying one container by road. I think it is definitely cheaper to do that.
We definitely need security, the Navy needs to be fully involved. I am not sure it is easy to steal a container, but you never know piracy is something that they have well-versed people on the water who can come up with the means of stealing a container. But I don’t think that is really a problem. The major problem is how the waters can be navigated and how to encourage traders, whoever is saying that is probably gaining more by truck, may be a haulage company, they will always come up with negative ideas. There is nowhere in the world that moving goods by barges is more expensive than by trucks.
Your Chamber is very much involved in the development of shipping, especially as it affects indigenous shipping, how would you evaluate the current development in local shipping trade?
Let me say that awareness is better than before. We have been able to contribute a lot towards raising awareness in the sense of people coming to understand the indigenous role and indigenous ability to participate in shipping activity. Whether indigenous participants have reached their full potentials, of course, we are still lagging behind but these factors are because of financing. The industry is very capital-intensive.
But with government injections, I know the President is keen on growing the industry. He set up a Presidential Committee of which I am a member, and we put together all the challenges being faced by indigenous participants and try to proffer solutions. Although Rome was not built in a day, but I think the sector is a lot more aware now than let’s say 10 years ago.
Can you please identify some of the challenges that your committee wants government to address?
The first step in the right direction was the retreat which the President had with us. It was held some months ago. And from that, there was a Committee to review the outcome of the maritime sector. It was a committee set up and chaired by the Minister of Transport and Vice-Chairman, Mr. Olisa Agbakoba. That committee has worked tirelessly to look at all areas. We have a sub- committee looking at security, cabotage and local content, fishery, education. I can’t start pointing out, everybody is aware that every area I mentioned has a problem.
Cabotage is the one you know was made to help indigenous people work within the waters. Has it been able to achieve its objective? Not how we want it to be as even the law has areas that have to be reviewed. So, one of the recommendations is that we should encourage the legislature. Thank God we have taken the right step in the right direction, they are reviewing that law and we have asked the President to lend his own weight towards that law being reviewed thoroughly because it has been five years down the line and all the mistakes are highlighted.
So it does not favour Nigerians because Nigeria cannot build vessels yet in Nigeria. So, we should look at transfer of ownership. The law did not transfer ownership. It tried to cut off completely without realising that knowledge has to be transferred. Many things in cabotage, local content is a little bit better because it is within an area where the international oil companies are comfortable with giving Nigerians a chance to work because they want to stay on in the country and continue doing their oil.
So, they are ready to concede certain areas of jobs to Nigerians. The only problem there is they want to have Nigerians so we need to building capacity, we need to encourage maritime education to be up to standard of international labour. So we need to partner international training establishments. We need to ensure that knowledgeable people are involved in policy making. There is quite a lot. I am happy the President has somebody advising him on the maritime sector.
This is the first time we have ever had that. So, at least, we are not relegated to one corner, because in the past Nigeria’s maritime sector was not regarded as an area of importance at all. It was dominated by foreigners, but this committee has shown that the President wants to bring income to the maritime and the maritime sector has the ability to bring a lot of income. And this committee, the paper we submitted to him, I believe he is going to look at it carefully and will implement as many suggestions as possible.
For a long time, Nigerians have been agitating to be part of the transportation of crude oil like their foreign counterparts. Even in areas of cabotage, it has not been so smooth because of the gang up against indigenous companies by some officials of NNPC and multinational oil companies. To what extent has your committee drawn the attention of the President to these issues as part of the steps to develop indigenous shipping capacity?
That has been fully addressed. But we should not be sentimental and say gang up. What I observed and I try to be objective is that there are some Nigerians who were complaining before, if you go to them now, they will say they are happy with what happened because they went to their houses and put them in order. Some of the complaints you hear about… you are a professional journalist and if I come to you from the maritime sector, and say, I am a journalist, then I write something, there are areas, you look at and say, Madam, go back, this is journalistic language, this is how to address it.
And I insist and say, no, I am a Nigerian, so you must give me the job, I must write and you know that if I write it will not sell. I am using this as a simple example, but I am a strong advocate that Nigerians, please let us put our houses in order. I know quite a few members of the Chamber who are doing very well, because they took the pain. It is a lot of work to do to meet the best practices. None of these international companies will allow their standard to be brought down because they have to comply with giving Nigerians jobs. But at the same time, there is some kind of inverted coma… to use foreign vessels, this is what we pointed out to the President that the law, there must be an enablement to make sure that these vessels are arrested, are brought to book.
But if they want to operate, let them operate with Nigerians who have the potentials of learning and may be period of transfer of ownership so that is how I look at it. I don’t like saying gang up because there is a case where a Nigerian was given a job and he highly disappointed me because he did not meet up and he knew what to do. The thing is both ways, the foreigners take advantage of us, but if we are going to complain we must make sure we are ready to take the jobs up when they come.
When you talk of putting our houses in order, what are your specific observations as wrong among local operators?
Some shipping companies don’t have the right type of capacity. For example, somebody operating in the upstream is given a job and puts his relation as deck hands, he will not employ the right people with the right to work because it might cost him more. Those are the sort of things happening. That is just a simple example. You are told to get a proper certification. You go and get a mushroom certification. How do you expect the company that wants you to deliver to give you a job if you bring fake papers? So, these are the sort of things. They are our own problems.
We have to sort them out. But this present government is doing very well in the area of ensuring that Nigerians are given first choice of refusal. Nigerians are made to know, look, it is yours, don’t allow anyone to take it from you, but please let us back you, but while we are backing you, don’t go and embarrass us.
When you talk of capacity building, we know your Chamber is involved, how are you handling this?
We run regular training lessons for everybody. We run what we call ABC of shipping, which like you can come if you have knowledge of shipping, you are given a deep understanding of a touch of every area in shipping. We even take you on a trip on Lagos waters to see beautiful wrecks (laughs) and the Lagos coastline.
We run structured analyses of shipping within the local content, so we should teach you how to see to contracts, what you should do, how to interact with oil and gas companies, and hope to buy vessels, how to seek finances and insurance certification, safety measures and how to source funds from banks. A lot of people don’t understand what they require to do when they want to get a contract. We also take participants on how to draft a bidding paper, among other courses.
Right now, we don’t have an effective regulator in the industry, and this is affecting the industry, I want you to react to this?
Of course, you know that I was very much involved in the Ports Harbour Bill and we all worked together. The Bill is going to be ready; we all need a little bit of patience. It is a Bill that has to be looked at thoroughly and when it does come up, it is meant to address everything. I am optimistic the ports Harbour Bill should be out soon.
The importers, freight forwarders have been complaining of imposition of many illegal charges because there is nobody to check the concessionaires and shipping companies, what is reaction on that?
You know that the complaints are gaining momentum and when something is gaining momentum, it means that something has to be done, and we have a President with a listening ear, and a Minister who is very versed. He is a lawyer and is extremely interested in what is happening. So I want to say, let us wait, something will come out soon.
Can you talk about corruption in the ports, do you think government efforts have yielded any serious fruit in addressing this problem?
The removal of some agencies at the ports helped a lot. I want to say corruption at the ports has disappeared, but I will say that efficiency of the ports has increased. It is just that it is heavily over-laden. The ports cannot cope with the demands. There is a lot of silliness. I want to call it silliness where there is scanning facility, yet you find agents preferring that it should be done manually. Obviously, this is part of the corrupt practice which needs to be addressed.
But with an economy regular in place, a lot of these things will stop. The ports are so clean and tidy now. When I first came into this industry, I could not go near the ports, it was like mad house. But this is just a popular country, and Lagos has 60 per cent of the population of Nigerians. It is like this is India, China, It is a little bit more discipline, but it is almost like this, because we perfectionists, Nigerians like perfect things. Our expectations are always higher than what we have, which means we are heading towards the right direction.
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