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The Nigerian Ports Authority has continued to make quality investment in the maritime sector and the industry looks to be experiencing some strategic transformation. In no small measure the agency has contributed immensely to the economic and social development of the country. In this interview the Managing Director (NPA)Mohammed Bello Koko shared insights on what the agency is doing to improve efficiency in the industry and many more issues Excerpts : Ugo Amadi reports
Sir , Many peoples still believe that Nigerian Ports are not competitive and for that reason, importers still have preference for ports of neighboring countries. When will that situation change?
Honestly speaking , people take their cargoes to port of neighboring countries for various reasons; this is either because they do not want to pay the right tariffs or because they see those ports as more efficient than the ports in Nigeria. The ports in Nigeria were built so many years ago, and the city has caught up with these ports. The space available for stacking cargo is now smaller than what it used to be in terms of volume. We have a very large captive market in Nigeria; these ports were built many years ago and they are operating two or three times beyond their installed capacity. You have draft limitations when vessels come to the ports. The channel itself and then the quay walls are all old.
Because of the strength of the quays, the terminal operators are not able to install ship-to-shore cranes. Ship-to-Shore crane improves the speed at which you evacuate containers from the ships to the quay side. So you can see that there are limitations to what they can do. The stacking area is limited, so a lot of things have led to inefficiency compared to the neighboring ports.
I believe that with time the Lekki Deep Seaport coming up that is fully automated, we are going to start getting back some of those cargoes. It will reduce the pressure on Tin-Can Island Port and Apapa Port and then you will see all of a sudden, efficiency comes. Competition has set in now with Lekki Deep seaport, other terminal operators need to sit up and do better than they are doing now. It means Nigerians now have options on where to consign their cargoes.
But you also know the problem of that port: the road infrastructure, the environmental issues, the accessibility and cargo evacuation.
That road is now being expanded using the tax credit scheme by Dangote. And the road leading to Epe and that axis is the evacuation route, it is also being worked on and expanded. So you do not need to come into Lagos. There are already plans also to use barges. That discussion is already on. The Minister of Transportation came here and has given mandate that the port must be linked to the rail line. The Minister is going to the Federal Executive Council to get approval for that linkage by rail to the port. We are working on a multi-modal means of transportation. It is not just that the roads are there, they are being expanded and being worked on.
Promoters of the Lekki port are already discussing with owners of large size barges for evacuation of cargoes. I believe by the first or second quarter of next year, the rail link would have commenced.
Sir, what is the update since your assumption of office about a year ago?
When I assumed duty as the Acting Managing Director, I started by having a management retreat where we jointly decided on how to refocus the Authority and came up with the immediate, mid-term and long term plans. And one of the most important things is to improve efficiency of the ports and trade facilitation and we agreed on responsibilities by each management staff, by port managers; we identified where there were gaps in terms of responsibilities of terminal operators and other stakeholders in the industry. We identified the need to block leakages and reduce expenditure which has helped in improving our revenue and also our contribution to the Consolidated Revenue Fund.
What other value areas have you focused on in the last one year, Apart from operational, financial performance?
We also looked at what to do in order to reduce traffic gridlock leading into the ports in Lagos and we realised that the best way is actually to encourage patronage of the Eastern ports and the way we can do that is to ensure that you have the necessary services that will reduce ship waiting time at the Eastern ports and we also looked at the staff, the best to encourage staff to work in a better environment and be encouraged to perform their responsibility very well.
So what we have been doing in the last one year is to try to improve on virtually everything and we have plans for everything. We sat down and came up with the best plans in the interest of the Authority and the stakeholders and we have had tremendous support from the Federal Ministry of Transportation; we have always gone back to them whenever we need approvals and where we need their input, and they have always come forward to support us; we appreciate that. So it has been an interesting one year.
The summary of the first half of 2022 report of N172billion revenue generated and N78billion paid into the Consolidated Revenue Fund. We want to know if this is as a result of increase in charges or increased activities at the ports that improved your financial profile
The increase in revenue you are seeing is because we have improved our collection mechanism and also we have blocked leakages. We had ensured that invoices are raised as at when due. We have a revenue invoice management system that we have improved upon and this had improved collections actually. We have paid a lot of attention to collections of our revenue and wherever we know we are suppose to collect that revenue, we collect it.
The system can be attributed to be responsible to the increase in revenue. Although, it is a slight increase but you will see that with the global economic situation, the inflationary trends in the world, the economic chaos all over the world, we would have recorded drastic decrease in revenue but we did not experience that due to our system rejig. Then we also ensured that we paid emphasis on the collection of our debts. Debt recovery was a major factor for us because now our services should be paid for before we render the services, though we have relationships where we have no option than to allow people enjoy our services and they pay later. In the past we had defaults over time and we have had legacy debts but I made sure that we collected those debts and we have created an avenue where very little debts exist now as at the current financial year.
What of port efficiency, service delivery to shippers?
We have recorded a 5.16 days or so Ship Waiting Time which is an improvement over six or seven days in the past. Some of the figures you see in our first half 2022 report, most of them are actually better than last year’s figures. Except I think one of them which is the Cargo Throughput which reduced by a few percentage and you can attribute that to the reduction in the purchasing power of Nigerians.
We know the world economy, we know what is going on and inflation has gone very high and so on. That could be one of the reasons you have that reduction, but in terms of efficiency, Cargo Dwell Time has actually reduced; there is less traffic on the road which means that people are able to quickly go into the ports and bring out their cargo. So there have been improvements over time.
How do you measure your contribution to the economy?
If you look at it properly, the Nigerian Ports Authority, in the whole maritime domain, I think we are the highest contributor to the economy. The projections that we have ongoing are in two digits in terms of percentages and we believe that it has increased. Our contributions have increased but it can be better than it is if we harnessed the Blue Economy and the other maritime domain activities and improve on them. I believe Nigerian Ports Authority and the whole maritime industry can do far better than it is doing now and that is what government is looking into now. Government is looking for revenue and productivity outside the oil sector and a Committee has been set up where we will be looking at what maritime businesses can harness; what are the opportunities either barely existing or not existing in Nigeria that can be enhanced or created in other to improve productivity and revenue to government?
Talking about the use and port patronage in Lagos and how much you have been able to achieve when you look at the statistics, about 80 percent of the goods come through Lagos ports. You mentioned the use of the Eastern ports, how much have you been able to achieve in that regard?
There has been a tremendous increase of Cargo Throughput into Onne, Rivers State. In terms of percentage increases, Onne has the highest increase in percentages compare to last year. So that means it is beginning to work. We have also seen increased activities in Delta Ports and a slight increase at the Rivers Ports.
So I believe that it is what we have been doing that has brought these increases.
We have been engaging importers and exporters to say: ‘listen, there are other ports in the country’ and I think they have been listening. We have held stakeholders meeting in Port Harcourt and wherever we go we try and call stakeholders meeting to let people know that there are other ports, there are locations that can be used in terms of export and imports. We have encouraged terminal operators in other locations to also set up export terminals within their terminals. Like the West African Container Terminal, WACT, in Onne has an export facility, from there, people can export agro-produce from those locations. We are talking about non-oil exports. Before now everybody was concentrating on exporting non-oil exports from Lagos ports.
Onne has come up with its own terminal and I believe there is a proposal to start exportation from Calabar, in Cross River State. Now, this brings me to an issue because I know you will ask: the issue of why we are giving 30 percent rebate to terminal operators.
What we said then is that, terminal operators were recommending further tariff relief of 30 percent and what we said was that we will review it and look at the conditions and the basis upon which we will give it to them. We want a tariff relief that will trickle down to the end user, that is the importers and exporters so that they will feel the impact and know that it is cheaper to do business in those locations than in Lagos. I also want us to realise that any tariff given by Nigerian Ports Authority will not be enough. You need the Nigeria Customs to come along, you need other government agencies that are also charging tariff to come in and chip in and also reduce their own cost. It should not be only the Nigerian Ports Authority that is always giving tariff reliefs. When it comes to revenue generation, all the government agencies come into the port and collect their revenues. It is time to join the Nigerian Ports Authority to also bring in some reliefs in these Eastern ports so that it will encourage patronage.
Looking at the non-oil export initiatives, about two months ago, the CBN Governor made a passionate appeal to you asking for some measures like a dedicated platforms for non-oil exporters. What is the update?
Before the Central Bank Governor made that appeal, we had already taken some proactive steps to ensure that some of these things are put in place. We gave licenses to ten export processing terminals and the essence of these terminals is, first of all, for exporters, especially, agro-produce and mineral resources exporters, to be able to take their exports to those locations, they should be sorted there, they should be processed there, they should be tested, they should be certified, they should be packaged and then containerized and sealed there and from that location, that export consignment should be taken directly into the port and then on the vessel.
What we are doing here is to reduce cost for the exporters, reduce time it takes to export these goods and then make the process faster. Out of the ten, about three or four of them are already operating. There ought to be an export desk; Nigeria Customs export desk is suppose to be at such locations and every other government agency that is necessary to enable export should be at those terminals. We have written to the relevant government agencies to have presence at those locations. We have already taken that initiative before the Central Bank Governor made that request. What he was asking for is a dedicated export terminal; that means a terminal by the sea, with berth and others to take away vessels. It is something that is in the map, in the drawing but what we have done is to create something like that outside the port, and then we move it into the port. And we have encouraged all terminal operators to also have warehouses and necessary facilities for non oil export products. About five of these export terminals are within Lagos and the other five are outside Lagos and we made sure that they are in locations that are actually not too proximate to the ports. Some are in Lagos and some are in Ogun State.
Talking about your performance, how much of the traffic gridlock do you think affects your financial performance. Yes, we have seen some increases; to what extend do you think your revenue can increase?
You find out that when you have traffic, it means it is taking a longer time for trucks to go in and bring out containers, it also means that cargo dwell time will be longer, it also means that it will cost more for you to bring consignments into Nigeria; it also means that some people will rather use other port locations. So you see, it is a cyclical kind of a thing. The faster you are able to evacuate your cargo from the port, the faster it is for the terminal operators to offload the vessel, the shorter time the vessel will stay at berth and those at the anchorage will also spend less time to get into the ports. So you can see the chain.
The gridlock should affect our revenue because it means you are not collecting as at when due, a lot of people are dissatisfied with the port because of the time it takes for you to clear your goods and because of the ship waiting time also. We are working on it, we are paying a lot of attention to that. We are engaging the Lagos State Government to streamline the activities of its traffic operatives on the roads.
We keep doing that; we have identified almost 30 check points recently. What we have done is to work with the Police and the Lagos State Government to go around and decide how many locations are supposed to have approved check points. And we are going to brand those. Any check point outside those designated ones will be seen to be an illegal check point. There will be normal Police check points with civilian collaboration so that they do not interfere with the flow of trucks.
We are working closely with Lagos State government to ensure that the traffic management initiative they have put in place works. The truck call up system has helped a lot also. Do not also forget that to reduce traffic, we have also introduced barge operations; this is to encourage the movement of cargo from one location to another using barges. That will reduce the number of trucks on the roads. It is an initiative that we also generate revenue from over time. That way, we will be able to monitor the movement of cargoes from one location to another and that has helped us to a large extend.
The NPA recently created a desk specially to handle stevedoring issues with regards to being engaged by the International Oil Company, IOCs. How far have you gone with this?
We all know that NPA is the master stevedore and we are the one that have the responsibility to either carry out the stevedoring functions or get a third party on behalf of the Nigerian Ports Authority to do them.
Some years back, we appointed stevedoring companies but it has been quite difficult to get the IOCs to accept them to go into their locations. The IOCs are giving many excuses for not wanting to have the appointed stevedores on their facilities. Some of the excuses are that the local stevedores do not have equipment, they do not have staff and so on; some of the excuses they gave are not true in the sense that some of the stevedores have been doing related jobs for decades.
What we did was to sit down with the IOCs and agreed on timelines telling them that they must allow the stevedores take over this responsibility. We have written to the Federal Ministry of Transport on this also and a meeting was held between the stevedoring association and oil producing companies and the Federal Ministry of Transport. Some of the OICs have started allowing the local stevedores to move to their locations.
We do not have full compliance yet and we just wrote an update to the Federal Ministry of Transport. The other option we had is to stop providing marine services to the IOCs but that will not be the right decision because it will affect the economy, but we are working with them and I believe they are now beginning to realise that the right thing to do is allow the law of the land take preference. We have started seeing an element of compliance by the IOCs but we will continue to engage them. I believe that the Federal Government, knowing that revenue is being lost because the IOCs are not allowing the stevedores move to sight, will take it seriously. I am absolutely sure that in no distance time, there will be full compliance by the IOCs.
What is your position on the 45-days deadline given by the Minister of Transport to conclude the renewal of the concession agreement?
We are equal to the task; we will deliver within the 45 days; we will finish what we are doing and send it to the Ministry. You see, do not forget that it is not just Nigerian Ports Authority that is involved in the renewal of the concession agreement. The Federal Ministry of Transport is involved, the Federal Ministry of Justice is involved, the Bureau for Public Enterprise is involved, the Infrastructure Concession Regulatory Commission is involved. So it is a long process I can assure you.
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