With the 2014 over, the shipping industry stakeholders are anxious on what the federal government and its agencies are able to do to improve the harrowing experience in the sector this year. Stakeholders who spoke on the way forward were of the view that their expectations this year should be on seeing practical efforts that are capable of addressing years of failure on the part of government as far as the industry is concerned. They spoke on the Apapa gridlock as critical area that government needs to urgently address as soon as possible.
Apart from the high cost of doing business, there is also the risk factor in the operating environment that Apapa has suffered in the past few years now. They also spoke on the collapse of indigenous shipping at a time when foreign concerns are thriving. Even with the cabotage shipping regime and the local content law, the foreign firms which are aided by Nigerians still control shipping activities within the coastal areas.
In the ports industry, the stakeholders are worried about the high cost of doing business. They point out the imposition of high shipping charges on Nigerian importers and its effect on the national economy and every consumer, and expect that every effort is sustained to stop the multinational shipping companies. They equally pointed out that apart from what the Nigerian Shippers’ Council (NSC) has been able to do in checking the activities of the shipping service providers, government has to demonstrate some level of political will by calling to order all the service providers to subject them to regulation for sanity in the industry.
Finding Final Solution on Apapa Gridlock
Stakeholders who spoke on the Apapa gridlock said that government does not appear to consider the economic value of the road to the nation. With falling oil revenue, they pointed out that the shipping industry which is next to the energy sector in terms of revenue generation is very vital to the economy and should be protected. Chairman, Corporate Affairs and Strategic Committee of Manufacturers Association of Nigeria (MAN) who spoke to this writer described Apapa gridlock as a harrowing experience for anybody doing business in the area, adding that except government moves fast to act, the nation will lose a lot of business interest to other neighbouring ports of Cotonou or Togo. Aluya disclosed that apart from Cotonou which is competing with the Nigeria, Togo is currently building a deep seaport that is 10 times bigger than those in Nigeria. He said that the country took a World Bank loan for the seaport project. According to him, since Togo does not have that kind of market for such seaport project it is building, the country is expecting that it will be given the status of a transshipment centre in West Africa. With the state of Apapa road and corruption in the ports, he said Nigeria may lose the load centre status to Togo with the new deep seaport.
He called on the federal government to be fast in addressing the issue of gridlock as this is also capable of robbing Nigeria of the transshipment centre status which according to him will have a multiplier effect on the national economy. Aluya also called on the government to pay attention to dredging the Warri and Calabar ports to improve on the current low traffic in the areas. Aluya also noted the Federal Government’s efforts on the dry ports and said that making these ports functional will also save importers that are far from Lagos the terrible situation they go through to clear their goods.
Rail Links to the Ports
An improved rail system in both Tin Can and Apapa areas was also identified as very effective in addressing the Apapa gridlock. The rail system, according to him Aluya will reduce the number of trucks on the road. A freight forwarder, Mr Tony Ojei, who also spoke said that the government needs to improve on the rail links to the ports. Noting that the rail system remains an integral part of ports development plan in every maritime nation, Ojei said that government had been paying lip service to the urgent need to have a functional rail links in all the ports. He called on the federal government to give the Transport Ministry and the Nigerian Railway Corporation (NRC) a one year target to provide an effective regular rail service beginning with Apapa. He said that if Apapa rail link can be fully functional, moving containers on daily basis, it will reduce the terrible traffic situation being caused by trucks going into the ports to pick containers or bulk goods. He advised that the Apapa rail should be linked to the Ikorodu Lighter Terminal where trucks can move to pick such containers. He said that in doing this, enough security could be provided for the containers being moved to the Lighter Terminal.
Truck Bay/Relocation of Tank Farm
Apart from the rail link, Ojei said that there is the need to build a truck bay where all trucks picking goods at the ports can be parked until it is one’s turn. He recalled that the truck owners have been making efforts to get a permanent bay outside the ports, and called on the government to come to their assistance. Similarly, he called for the gradual relocation of the tank farms outside Apapa because of the dangers involved. With insecurity in the country, Ojei said any attack on Apapa targeting the tank farms was capable of putting the whole area on fire. He recalled that government had indicated efforts to relocate the tank farms, and said that concrete plans should be made to enforce decision because of the danger ahead. According to him, any crisis in Apapa port was capable of crippling the national economy.
Reducing Cost of Doing Business in Nigerian Ports
Aluya also argued that except the terminal operators and shipping companies were checked through strong political will of the federal government, they will do a lot of havoc to the nation. Noting the efforts of the Ports Regulator in ensuring that cost of shipping services were checked, he said that the federal government needs to demonstrate enough political will to get the shipping service providers to comply with international standards of doing business.
The Nigerian Shippers’ Council (NSC) in December last year won a case against the shipping service providers on reduction of shipping charges. Both terminal operators and shipping companies had taken the Council to court for reducing some of the shipping charges. However, the service providers have appealed against the judgement of the Federal High Court, Ikoyi, which affirmed the Council as the Economic Regulator and okayed the reduction of shipping charges as demanded by the Regulator. Aluya. while noting that the shipping charges in Nigerian ports were too high, said it was among the reasons for diversion of goods through the neighbouring ports.
He said that the shipping charges in Nigeria should not be higher than what obtains in neighbouring countries. With the deep seaport in Togo, he said that except the shipping companies and terminal operators were checked fast, many Nigerian importers may divert their goods through the seaport when completed. With the diversion already through Cotonou ports, he said that this was not the best for the country. Besides, he said, this will open up the chances of Togo becoming a transshipment centre in West Africa. Supporting Aluya, a maritime lawyer, Mr Emmanuel Ofomata, said that government needs to create an enabling environment for the Shippers’ Council to carry out its regulatory functions, including making Nigerian ports comparable to what is found in neighbouring ports. Commending the efforts of the Council, Ofomata said the moves to achieve efficiency at the ports through reduction of cost of doing business should be sustained by the Regulator.
Indigenous Shipping Development
On the way forward for the indigenous shipping industry, the Secretary, Institute of Marine Engineers, Mr. Alexander Peters, said that the planned National Carrier by the federal government should be a reality in 2015. Apart from the involvement of other stakeholders, he said that the fund for establishing the National Carrier could be sourced from the Cabotage Vessel Financing Fund (CVFF).
Peters also called for serious work in developing the deep seaports because of their economic value to the country.
However, other industry stakeholders called for the disbursement of the fund in CVFF, arguing that it was one of the ways to assist many local shipping companies acquire their own vessels which they need to take part in the lucrative shipping trade. Besides, they argued that concentrating efforts on human capacity without more Nigerian owned ships will spell doom for the industry as trained seafarers will remain unemployed.
Copyright 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.