We’ll introduce capital base for freight forwarders –Bello, NSC boss
By Isaac Anumihe
As part of measures to sanitise port operations and make freight forwarding a transparent business, the Federal Government plans to introduce a new capital base for freight forwarders and also ensure that they are properly registered.
Executive Secretary of Nigerian Shippers Council (NSC), Mr. Hassan Bello, disclosed this during an interactive session with the media in Lagos. He spoke on other plans the government has to clean up the port operations.
He highlighted other issues bothering the operations in the ports and what the government is doing to address them.
Cost of ports automation
Automation is a very expensive project. Automation of the ports is not the NSC exclusive. For example, Nigerian Customs Service (NCS) has automated their payments system. Before, you have to spend about six days to make payments. You go to the bank in Surulere or the one on Victoria Island and make payments, then you bring it to the Nigerian Ports Authority (NPA). This was done about a year or so. But now, they have automated their charges. What took like six days is done in six seconds. So, this is their contribution to the automation of the ports. The NSC is spending a little above N1 billion for the automation of our system.
Nigerian Maritime Administration and Safety Agency (NIMASA) has also automated its system. Nigerian Customs is, as a matter of fact, well ahead of automation. So, it is the aggregate of all these automations that will be integrated as a unified platform and will have a national single window. National single window is not built on nothing. It is built on separate system. But these systems must be integrated. So, NSC is spending N1 billion annually. All the freight forwarders will have ICT interface. We will make sure that takes place. If you want to be part of it you must be on the side of automation.
Minimum capital base for freight forwarders
We want to change the policy of selling our crude oil on Freight On Board (FOB) and make it CIL. But then, what is the situation now? Americans have had their oil and other places have had their oil. And the element of recession is very important to what is happening. But the most important thing is that all policies must be run by people. We, Shippers Council, have introduced and promulgated the council for the registration of freight forwarding, for example. It is a Shippers Council Act because we wanted to see that freight forwarding is actually a profession. So, a freight forwarder is as good as a lawyer. It is not anybody who will come and practise and say he is a lawyer. He has to pass certain exams and be an advocate of the supreme court. That is what we want the freight forwarders to do. The problem with changes is that if you don’t make changes, sometimes, the world will pass you by.
I have already said it is important and that is why the Minister of Transportation has already set up a committee on the implementation of a national fleet. It is important that Nigerians own and operate this and the government will not participate in that project. Already, there has been a Memorandum of Understanding (MoU) between Federal Government and the PIL, which is an international shipping line in Singapore. A delegation led by the Minister of Transportation signed the MoU, which says that PIL will have 40 per cent of the equity and Nigerian entrepreneurs should have 60 per cent of that equity. So, the government is not putting in a kobo in that venture. That is why we are here. We are better having a private sector and that private sector has to be responsible.
So, that is why we are going to have Nigerian fleet and the Minister has agreed that we will confer on those vessels flying Nigerian flags as national carrier. When those vessels have national carrier status, it means certain cargo, Nigerian cargo, is guaranteed. Look at the colossal investment the government is making on the Nigerian Railway – Lagos-Kano-Calabar-Port Harcourt – and having rail in all the ports.
This is the rule of the government on that. So, that is what we are doing to encourage vessel ownership and I have said that is not a coincidence that NSC has been appointed the chairman of the implementation committee because it supervises and advises the government on very important policies.
Concessionaires’ complaints about tough cost
I tend to agree with them but if there is no system in the ports, there is no standard operating process. We have introduced that now. Tariffs are supposed to change; sometimes they go up, sometimes they go down. Sometimes it is the chaos in the system rather than the individuals that brings out all these distortions. And once you have the distortions, you can’t do anything. The terminal operators are in sync with NSC. They don’t have competitive tariff so as to attract more cargo and these cargoes come into Nigeria. So, I think, sometimes they may be right in saying that other agencies add to the cost and we are now streamlining what other agencies are doing.
All ports are Customs ports and it is the Customs that will invite the agencies for specific consignment and for specific time. You said that 30 companies have left Nigerian shores; they are always saying that but one thing is, why are you going in? Maybe the 30 companies are from big oil operation or supply vessels. That could be true. Some of the policies have to be modified but the most important thing is that all policies should be introduced to you and other critical stakeholders so that they will have general acceptability.
Provision of data in ports
Data is a bulwark of trading. Now, one of the issues with the ICTM or advance cargo system is the data it provides. NPA is already providing that. You may not have the particular commodity but NPA has the data on how many containers or the bulk commodity or even oil it has among the terminals. ICTM will provide the whole gamut of the data. As soon as we start, it will be very easy. Even before that, NSC has a data bank for trading. Of course, it is difficult to make it real, sometimes because it depends on the data we get.
Forty per cent is going to be given to PIL while Nigerian entrepreneurs will take 60 per cent. And this venture will start immediately we do that and we are going to start with two or four ships so that they will fly Nigerian flag and have a status of Nigerian carrier in accordance with Nigerian law, which means they are going to have the advantage of getting national cargo.
Exportation is the hallmark of diversification of our economy. We have a high cost of importation. We have an import economy, which also employs people. Now, we are here for export and NSC is at the centre. The problem with export are about four. We have the infrastructure. That is, how do we evacuate this up to the point of export? We have to have the infrastructure like rail and good roads from the farm to the point of export. Even at the point of export, we have to have consolidation centres like providing refrigerators for perishable cargo. We also need to have access to the market, then access to finance. Between the CBN and NEXIM, is about $500 million for export and that we intend to utilise for export. But there are issues like standardisation. Many of our exports are rejected and brought back to Nigeria because they don’t conform with standards. Then you have to have standard organisation here in Nigeria certifying them and saying they are up to standard. This is not done.
Another issue is that of packaging. You have to package your products to withstand the temperature and other vagaries at the sea. Also, for competition because packaging is a very important capitalist order. You have to package your products very well so that people will buy. We are setting up a two-day national discourse with NPA, NSC, NEXIM and Nigerian Export Promotions Council (NEPC) and we have to have ministers of transportation, finance, agriculture, solid mineral and then trade and industry. We are going to write a joint memo to the Federal Executive Council (FEC) bringing out a particular area, which must be addressed as far as export business is concerned. We either export or we perish. We really have to start exporting. That is very important.
Encourage importers to use Nigerian ports
We have said it in different fora that we want to encourage others to use Nigerian ports and we can always encourage people to do that if the port is efficient. These are the applications we have demonstrated here, which we think is our contribution to make these ports efficient. We have wooed Niger to bring their goods to Nigeria, not only to the port in Lagos but the ports in Warri and Calabar. The most important thing is to make the port efficient. Once your port is efficient, the shipper who has the right to choose where his cargo will come to will make that economic decision and not on sentiment.