The appointment of Nigerian Shippers’ Council (NSC) as interim port economic regulator did not come as a surprise to many. The Council had lobbied for the position since 2006; shortly after cargo handling operations were transferred from government to private companies.
To say that the decision of the Federal Government to embark on reform of the seaports which culminated in the port concession of 2006 is the best thing that has happened to the Nigerian port system since political independence in 1960 is to state the obvious.
Prior to the reform programme, Nigerian seaports were largely inefficient and unattractive to port users. The ports could not even compete with those of neighbouring West Africa countries. The result was huge congestion at Nigerian ports and attendant diversion of cargo to the ports of Duala, Cotonou, Lome, Tema and others in the sub-region.
Nigerian ports were largely characterised by unnecessarily long turnaround time of vessels and long cargo dwell time prompting the imposition of what was then known as port congestion surcharge on consignments coming into the country by multinational shipping firms under the aegis of the Europe-West Africa Trade Agreement (EWATA).
There were also frequent cases of insecurity of cargoes giving rise to broaching and in extreme cases ‘flying’ of containers, which was the local parlance used to describe container theft from the ports.
The gains of the port reform are numerous but with the exercise came the challenge of regulation. The absence of an arbiter to mediate in times of dispute between the landlord of the port, Nigerian Ports Authority (NPA); service providers made up of shipping companies, shipping agents, terminal operators and others; and the consumer of port services made up of importers, exporters and their agents; has been a sour point in the system.
Government’s plan to create the National Transport Commission (NTC) through an Act of the National Assembly has failed in the past eight years. The NTC was designed to be to the ports what the Nigerian Communication Commission (NCC) is to the telecommunication sector.
While the appointment of Nigerian Shippers’ Council has been hailed by some – mostly clearing and forwarding agents – others have expressed reservations about the ability of the Council to be fair to all.
NSC was established during the military regime of General Olusegun Obasanjo by Decree 13 of 1978. It was set up primarily to fight the cause and protect the interest of Nigerian importers and exporters. As a result of this mandate, many see it as an interested party in the cargo delivery and logistics chain.
Now that the Federal Government has decided, in its own wisdom, to confer the role of commercial regulator on it, the NSC’s major task is that of confidence building. Without statutory backing yet, the Council will require the cooperation and goodwill of all concerned in the chain to successfully execute its brief.
The management of the Council should immediately convene a stakeholders meeting and give public assurance that it would play the role of an unbiased umpire. It should not get carried away by the noisy few in the industry.
The new port regulator should immediately debrief its staff and purge them of the notion of “protecting shippers.”
If it fails to gain the confidence of all interest groups and major operators in the industry, it will fail woefully in delivering on its interim mandate. The case of the Council for Regulation of Freight Forwarding in Nigeria (CRFFN), the freight forwarders regulatory body, which has been struggling since creation in 2007, should be instructive to the NSC.