Chief Adebayo Sarumi served as Managing Director of Nigerian Shippers’ Council from 1996 to 2003 and as Managing Director of Nigerian Ports Authority (NPA) from 2003 to 2007. He executed the Federal Government’s port reform.
In this interview, the Ibadan chief speaks on sundry maritime trade issues including the need to focus more on export trade.
Excerpts:
What is your assessment of Nigeria’s participation in international trade?
We have placed too much emphasis on imports trade with little or no reference to exports. International trade is both in and out. Any country that does not handle both sides can never make it. It will be perpetually in debt to other countries. You have probably heard of what they call balance of trade. It’s about bringing in and sending out, and we all know the repercussions if we do otherwise. You have inflation imported into the country and your young men are jobless because your factories are not producing. You are taking other people’s goods and that is precisely what is happening now and we have seen the repercussions of it. We thought this is the best time to now focus on export trade. As far as Nigeria is concerned, import trade takes over 85 per cent of trade while export trade only takes 15 per cent. Most of the export is crude oil and some agricultural produce. We believe Nigeria has a lot to export and we are encouraging people to export and facilitate exports. When you talk of facilitating exports for purpose of trade, then you are talking in terms of taking your own goods either from your farm base or from your factory gate overland into the port and also waiting in the ports are ships that are going to take them to where you are going to be able to sell them.
Is that all about export business?
Of course, in between this chain that we are drawing out are also so many nuances: export financing and quality control. We are still talking about the ship that will take goods. Ships that are used to bring imports are not the same ships that are used to take out exports because they differ.
Ports that have been specifically designed for imports are different from ports that are designed for exports. Let me give you an instance. If you want to export 1,000 tonnes of pineapple today, which Nigeria is able to have, even before it reaches the farm gates it has lost its contents and quality. From the farm gates, you will probably require the kind of overland transport that is climate controlled and specifically, the goods should reach where it is going at minimum moisture, at a certain minimum low quality of infestation. But if you don’t have the right type of logistics to move from the farm gate up to where you are going, you have already lost them and when they get to the ports you have to be sure they will be alright before the arrival of the ship that will take them and this must also be climate controlled in terms of infestation.
I need to point out that there is a specific type of ship that is designed to do the job. They are available all over the world but they don’t come to our shores because they don’t take us serious and because we don’t take ourselves serious too. When we are ready, they will start coming and this is what it’s all about. Now it’s time for us to start thinking how to embellish our export trade not only from the point of view of productivity but also from the point of view of logistics and from the point of view of quality control.
There are two issues involved when it comes to export business. You have to talk about production of export materials, then production of processed goods, which one are you strategically focusing on because you have been talking about raw produce?
We talk of both. Ordinarily, I hear people talk of production for export. Before you can produce for export, you have to have a gestation period that lasts so many years. For example, when our textiles factories were working what Nigerians had against them was the quality of the yarns. If ordinarily, the quality of what is produced is not acceptable locally, do you still want to export it? Usually, most countries of the world that want to export, what they do first is to produce for local market and then whatever forms of problems you have would have been fine-tuned before they are ready for export. So if you see us talking mostly on primary products that is because we are talking from our point of view of where we are strong.
To what extent will you say government has been supportive?
To some extent, I will say government is not supporting. Do you think the door that is locally produced in Nigeria can match the door that came from Turkey? However, if the Nigerian producer has been producing that door for so long, that door will soon match the imported ones. We are doing two things together but initially, we want to look at areas of core competences which are the raw materials or primary products but that does not mean we are not going to talk about export as well. We will talk about that one as time goes on but produce first for factories. Let the products of your factories be acceptable first by your own people. Let them be large enough to satisfy the local market and import substitution is very important.
How can we strategise to achieve a stage where we produce in quality that attracts outside market?
Ours is maritime and logistics. We are talking about international trade. Trade is moved on ships and through other forms of transportation including air. It is possible for us to produce flowers in large quantity here and for the flower to be flown by air every day. The aircraft will leave here by night and will still be fresh by the time it gets to London the following morning from where it is sent to all the flourists around London.
To what extent can maritime business be relied upon for the higher returns?
When we are able to provide the needed infrastructure for efficient and effective export of our products, the products themselves will reach the market at lower prices and the lower the prices of export products, the more acceptable that products for the importers from the other end because if you take too much from importer from the other end, then you will have a situation where he will not buy from you again. But if everything is taken care of as we were saying, by the time the products reach the world market, it will not be too expensive and that means you will have a ready market because the man will be asking you to bring more.
The other way is what he gets back. He gets foreign exchange, so rather than we running after dollars, the way we do now, we will just be bringing in that same foreign currency and that was what I mean when I talked about balance of trade.
We believe that maritime and logistics arm of this business can be done in such a way that the export products will be cheap in the market where it is taken to, so also in the same manner, it will fetch money back. Within the export process and the logistics process, we can introduce the issue of quality control and this will become a gateway in preventing disasters.
The logistics side can also embellish the quality of export through the use of climate-controlled containers. There are certain kinds of overland transport facilities that are specifically produced for that type of service and even, we can then let the ship owners know that when they come to Nigeria, it is also possible to lift few containers of either mangoes or tomatoes or something like that so when you are coming, come with refrigerator or something that has facility where everything can be controlled until it gets to the destination.
People have accused the Nigeria Customs Service of concentrating too much on revenue collection rather than trade facilitation. What’ s your view on this?
I think Nigerians are being unfair to them. They are working. I think the major problem Nigeria has is everybody pay more attention to imports with less attention to exports.
What is the problem of Nigerian shipping companies?
They make the mistake thinking that because they were indigenous ship owners they should all go and carry crude oil. We have been talking about export, why can’t they think of how they would be useful in this line instead of struggling for a piece of action in crude oil lifting. Let me give you an instance. In the eighties , I was a manager in the Apapa port and about that time, two guys came around and approached us and said they wanted to bring in ship that would be exporting to Lome in Togo, Accra, Tema in Ghana as well as Abidjan, Cote d I’voire. They started with converted trawlers. As a way of encouraging them, the Apapa quays had to be structured to accommodate their trawlers. What they carried were the produce of the Nigerian industry which they bought in Oke Arin area of Lagos and we designed a process of rolling these items into their small ships.
Ship owners can be encouraged to participate in export if they can only reason. Why can’t Nigerian ship owners devise such a method? Are you saying they don’t need Nigerian products in the neighbouring countries of Abidjan and Conakry? What the typical Nigerian ship owner is after is to participate in the lifting of crude oil. A typical vessel for crude oil lifting costs $100million and Nigerian banks will tell you they don’t have that kind of money. The next thing is that they will want to lift finished products. Nigerian ship owners can make it if they can start thinking about how to make impact in regional trade. Who says they can’t carry goods from here to Douala? Even passengers, who says they cannot do that?
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