Making a case for user-friendly ports

port

By Ace Omozuwa

Globalization is not a nominal ideology; it is the creative lifeforce of the prevailing worldeconomic system. Its ascent in the last few decades has incentivized the interlinking and interdependence of markets. It has also made cross-border movement of people and goods relatively easier and faster. Indeed, international trade liberalization, which could be seen as a key derivative and driver of economic globalization, has given rise to astronomical increase in the value and volume of goods traded across national borders. This implies thatmaritime ports are vital drivers of national economic growth.

Global economic institutions acknowledge the fact that Nigeria has enormous economic growth potentials. However, our series of failures to translate this huge potential to reality have made us an object of scorn. We are particularly scorned when our political leaders start soliciting for benevolent economic tokens, interest-friendly loans, and aids for infrastructural development earmarked for developing nations. We have failed to consolidate our emerging market status and attain inspiring economic heights, among many other reasons, because, of bad governance in the maritime sector.

Economic planners and government functionaries in our clime have not consistently demonstrated their awareness of the fact that maritime ports aresuperb gateways to global economy.Efficient ports are critical to the development of service economy, andmanufacturing sector.Nigeria and Nigerians cannot reap the fruits of economic globalization without efficiently operational ports, where import and export related business transactions are conducted seamlessly, and stress-free.

There are reasonable grounds for us to anticipate that while the price of oil is plummeting in the international market, Nigeria could rapidly replicate the economic miracle of the Asian Tigers,if our leaders would muster the political audacity to modernize maritime ports.

Due to a lasting cocktail of problems, and untapped opportunities in the maritime sector, every year, according to a recent World Bank estimate, various goods (notably cars, rice, eggs, and frozen chickens) valued at $5 billion (N1.45 trillion) are smuggled into Nigeria through Benin Republic.

Benin Republic has taken advantage of the lackluster state of Nigerian maritime ports. Her relative economic buoyancy is largely dependent on her policy initiatives aimed at wooing Nigerian importers to use Port Autonome de Cotonou, commonly known as,Cotonou seaport. Her import duty is always low. For example, in Nigeria import duty for cars is as high as 70 percent, while in Benin Republic it is 10 percent. Hence, Cotonou seaport is the preferred destination for profit-maximizing importers. Apart from her favorabletariffs, her ethical-service delivery, good road networks, promptness and ease of clearing goods are additional allurements which Nigerian importers find irresistible. As importers moved in their drove registered forwarding and clearing agents movedalong with them from Apapa to the Cotonou port.

This development is sad.  Benin Republic has only one seaport. Nigeria has eight major seaports. Despite this, with user-friendly policies and effective port governance, the government of Benin Republic has made importers to shun ports in Nigeria. It is not difficult to fathom why they succeeded with relative ease, in 2016;Nigeria’s Economic Competitiveness Index was abysmally poor. According to the World Economic Forum Nigeria ranks 124th position out of 140 nations. This is not a nascent problem, it is perennial.

The pathetic thing is Nigerian government is not taking far-reachingmeasures to boost her economic competitivenessindex, and thereby, end Benin’s parasitic economic relationship with Nigeria.  Rather, we gloat in delusive pride whenever Benin republic assuages our frail national ego by saying they are the 37th state of Nigeria. Yet, for the second time in less than three decades, they have compromised the territorial integrity of Nigeria by hoisting their national flag in three border villages in Kwara State.

The concerns of Captains like, AbiodunFatai, should be addressed. Captain AbiodunFatai, once operated a commercial ship from Nigeria before moving to Cotonou. He notes that the movement became expedient because of many factors. These factors include piracy, armed robbery, and many other criminal activities on the high sea.  Furthermore, he noted that ships that berth in Nigeria were charged high fees due to the so many government agencies operating at the ports.

Nothing buttresses the urgency for port governance reforms like the World Bank’s 2016 Annual Ease of Doing Business Report. On trading across bordersNigeria was among the lowest in the world, 182 out of 185 nation states. It is a well-known fact that trading across border is a critical index of a nation’s port efficiency.

Furthermore, the report indicates that Nigeria’s business environment is hostile, considering the fact that Nigeria was ranked 169 out of 189 nations. The fact that Mauritius ranks 32 making it the best place to do business in Africa should rouse concerned policymakers from the slumber of complacent dependence on oil revenue.

Similarly, the United Nations Conference on Trade and Development (UNCTAD) report shows that comparatively Nigeria’s ports and maritime services are at suboptimal level. Using the evaluative framework of annual quantity of Twenty-foot Equivalent Unit (TEUs), in 2014, a comparative examination of Africa’s maritime sector shows that smaller economies outperform Nigeria.    In this wise, Egypt leads Africa with 8,810,990 TEUs.  South Africa, which seeks to be the leading economic and political nation in Africa ranks second with 4,831,462 TEUs.  Nigeria,the acclaimed giant of Africa, with 1,062,389 TEUs languidly follows Morocco with 3,070,000 TEUs.

The foregoing suggests that there are amplitudes of empirical data that shows Nigeria is not making best use of her ports. The effectiveness of port operations in Nigeria are hampered by many factors.  Some users and operators at the ports have identified some of the key problems. The major problems are infrastructural deficit. For example, access roads to all the major ports in Nigeria are in deplorable state. Hence, gridlocks are regular features of port vicinities. This is a huge disincentive to growth and business efficiency. It economic cost is beyond imagination. Commuting is so stressful and time consuming that importing or exporting perishable items are now recipe for business failure.

Another growth retardant in port governance is the ubiquitous use of obsolete technologies. It is inconceivablethat most business activities in the port are analog based. Time-wasting manual scanners are the norm. Electronic payment systems are seemingly otherworldly luxuries that cannot be domesticated in our ports.  This is too sad.  Is it not a known that technology supports prompt service delivery? If we truly seek to diversify our national streams of income, it is imperative that cutting-edge technologies should drive business operations in our ports. This will reduce the typical timefor clearing TEUs from thirty days to two days, which is the global norm.

Another problem is policy and regulatory irregularities. The Obasanjo-led regime made significant efforts to reform the maritime transport sector in Nigeria. Forward-looking, growth-spurring policies were formulated to entrench the culture of good governance, and broaden the scope of private sector participation. However, after a decade the policy objectives of the reform are yet to be achieved. This is mainly due to policy inconsistencies and a culture of profiting from planned shambolic. The ideals of the reforms have been shattered by those who profit from illegality.

Bureaucratic chaos has also impeded the rapid growth of Nigeria’s maritime sector. There are about twenty government agencies operating within the port area. Most of these agencies do not have clearly defined mandates. As a result, their functions overlap. The resultant effects of these are numerous. Key among them is that it has created bottlenecks which make clearing of goods a nightmarish process that last about 14 days. Contrastingly, it takes about two days inPort Autonome de Cotonou.  Another problem associated with this chaotic policy scenario is that business operators in the sector are victims of red tape,shakedowns, and harassment. It is important to add   that the cost of business transactions in the extant policy regime is prohibitive, because of multiple charges by the different agencies of government.

To eradicate these economic growthretardants, it is imperative to reduce the number of government agencies in the port from about twenty to six or so, which is the global standard. Similarly, efforts should be made to address the fragmentary and overlapping nature of the governing legal framework of the extant public-private partnership agreements.

One way to ensure that Nigeria’s maritime ports become world-class and user-friendly is to strengthen the institutions that operate in the ports. Building institutional capacity is a multi-pronged task.  It entails human capacity development, value reorientation, technologizing operations, promoting adherence to standard procedures, and entrenching a philosophy of ethically oriented service delivery systems. 

Copyright 2017 Ships & Ports Ltd. Permission to use quotations from this article is granted subject to appropriate credit given to www.shipsandports.com.ng as the source.