Nigerian maritime industry has been stagnant in the last couple of years’

Maritime lawyer and Principal Partner of Akabogu & Associates, Mr. Emeka Akabogu in this interview reviews activities in the Nigerian maritime industry in 2011. He laments the allocation given to the transport sector in the proposed budget of the Federal Government for 2012.
Excerpts: 

How was the operating environment for your operations in 2011?
I will say it has been quite challenging essentially due to the sole reason why business has been challenging for most Nigerian businesses this year (last year), the elections. The year (last year) was quite slow getting started and even when it got started many businesses have been very cautious. And really business should not be dependent on a cycle of governance that is not defined; business should be immune from the idiosyncrasies of government, whether the government is having election or whether the government is feeling nice or otherwise. Businesses should run on auto run universally and that should apply to Nigeria.

What about the latter part of the year, after the elections?
I will say business picked up later in the year (last year) generally but it is still suboptimum.

How about the maritime industry in Nigeria, how will you rate the performance? Any marked difference from the status quo?
I will say no! There is no marked difference because the various initiatives of government as far as the maritime industry is concerned have been stagnant in the last couple of years. This year (last year) has witnessed no radical change. So if we are going to achieve progress in the industry, government at all levels and regulators of the maritime industry in 2012 must be up and doing. They must be alert.

Government at all levels including the Federal Government must be up and doing, must be alert and if they are going to be alert we should be seen that from the budget framework presented by President Goodluck Jonathan to the National Assembly, so, are you seeing that in this budget for the transport sector, for the maritime industry?
Not exactly, that’s the truth because looking at the budget estimate which has been presented to the National Assembly, indicates a budget of about N56 billion for transport and that is encompassing the various components of transport and that is about 1.26 per cent of the federal budget. And for a sector that is so critical to the galvanization of the economy, I think that is quite sub optimal amount. Of course we don’t know what the Federal Executive Council still has up its sleeve as far as budget implementation is concerned because ultimately I believe that a lot of achievements could be factored within the industry if budgets are well implemented. I tell you if you’ve got a budget of one billion naira for a sector and the one billion naira is judiciously, creatively deployed, there will be some impact, even if limited but there will be some impact.
So ultimately it is about how well it is implemented but I must say that given the challenges that are facing the transport sector, here I am talking about those components of the sector that are not self funding, railways, inland waterways, giving the huge challenges, that amount is quite suboptimal and you know that most of this is really going into overhead cost. Most of that amount which has been budgeted is going into overhead cost.

So there is no serious attempt at capital project development in the industry?
Capital project development. We know that there were attempts when they tried to allocate money for dredging of the River Niger for instance but the question we must ask ourselves at this point is, at every point in time when you allocate money for projects, do you ensure that we get value for the money which is spent? The dredging of the River Niger, was it done under a holistic template that ensures that the dredged River Niger becomes navigable, is utilized for the development of economy, the navigability of the waters, I don’t yet have news on that. If there is, we’ve not been updated on that.
So these are issues, we should stop a situation where we are trucking goods every day from Lagos to the north, to the east; these are issues; so the money which has been deployed in the dredging of River Niger, has it been judiciously and effectively utilized? So that’s one of the questions. You now see a sector like railways for instance, is the railways positioned to move goods and services around? Don’t forget that in 2012 subsidy is being removed, we have a challenge of increased pressure on the spending power of Nigerians and giving that, you have a framework which ensures that the pains would be cushioned. And the greater part of the pain for subsidy removal relates to transportation. So these are two critical areas that in terms of palliative measures which the government is talking about could go a long way in ensuring that the pains of the subsidy removal are removed largely because subsidy removal is all about transportation. And if we can take care of mass transportation; cross country, a lot will be achieved by cross country movement. So, a significant portion of subsidy charges and that cross country movement must be facilitated both for goods and for passengers.

You talked about the self sustaining agencies, those that generate and spend by themselves NPA, NIMASA, even the Nigeria Customs Service. What will you want to see them do next year (this year) in terms of their budget implementation?
I will rephrase that by saying that I recognize that the president has given significant attention to the maritime industry, at least in terms of what he says. He has said that maritime sector is going to be prioritized, but I have not seen that in the budget, that is my concern?Absolutely if I am to read the lips of Mr. President, he has said that the maritime industry is important to the economy. He has appointed a Special Adviser on the industry and he has specifically mentioned that the maritime industry as one of those areas, drivers for employment, he specifically mentioned the maritime industry in the port reforms. So against that backdrop, I would believe that the various agencies, now the self funding agencies of government should prime themselves towards realizing the president’s vision. And they can only do that by ensuring that in the implementation of their budgets, they are transparent and that they give value. I think that, with a lot of consideration. A body like Nigerian Ports Authority for instance has a budget which is in surplus of many states in Nigeria. So this organization is positioned to really catalyses the industry in many respect. Their budget for 2011 indicated about N85 billion for capital project and about N45 billion for recurrent expenditure. That’s a lot of money, unfortunately, we don’t get to see what this money is spent on I know for the last five years critical dredging which has to occur within several ports in Nigeria have not been done and a lot of that money is meant for dredging, for infrastructure development. NPA as we speak is simply a landlord. To that extent that the capital projects it is undertaking are common-user capital projects which I have not been seeing. So one the question we will have to ask ourselves and we have to follow up as far as budget implementation is concern within the maritime industry as issues relating to budget tracking. Most times we leave budget tracking to the NGO’s in the broader framework. Within the maritime industry we have to now become much more agitated, alert to ensure that there is value for money in expenditure. That the agencies of government are able to deliver value in the implementation of their programmes, you know when they talk about ensuring that the budget is implemented hundred percent, it is not ideal that the budget is implemented hundred percent without more. If the hundred percent is just to ensure that the money which has been allocated something is spent, that is not the issue! The issues, what is the quality of that expenditure, so I believe that stakeholders in the maritime industry are becoming more alert, as far as the details of issues are concerned.