President of the Port Harcourt Chamber of Commerce, Industry, Mines and Agriculture, Dr. Emi Membere-Otaji, raises the alarm over unwholesome charges by some firms as well as the need to closely monitor banks to curb sharp practices in foreign exchange transactions. He spoke to Ahamefula Ogbu. Excerpts:
How can Nigeria leverage on the numerous rivers and creeks to improve transportation system in the country seeing that our roads are always clogged and under pressure?
Nigeria is blessed with a lot of navigable rivers and lakes and nearly a million kilometers of coastal line; it is worrying when you see what happens in other countries like Egypt and countries you have around the River Nile do as well as what others along River Mississippi do and then see what happens here. Look our roads are poorly maintained and then driving along our roads you see a high level of accidents that occur, leading to loss of assets, loss of time and loss of human lives to move from say Lagos to the north or from Port Harcourt to the north or from point to point and yet we have so many rivers that we can use and don’t forget that first they take a lot of bulk at a time with fewer accidents and shorter time.
A trailer takes about 30 tons; a locally built badge pushed by a locally built tug boat, an average of 40 meters long will take about 600 to 700 tons, now compare that to what one trailer will take 30 tons and if they move in a convoy, you can imagine what that would translate to. So we need to go back and make sure that for the reasons I have said in terms of loss of time and loss of lives and then the pressure on our roads, to make sure that our inland rivers and lakes are utilised fully. Not too many years ago, the federal government dredged the lower Niger and I believe they are also doing maintenance dredging from time to time to make them navigable and if they do, we need to begin to take advantage of God’s gift that we have and when you look at it with what is happening in the country where there is a lot of things to do, we have to do that to promote import promotion and import substitution; it means that there is going to be a lot of activities that would go around agriculture, massive industrial scale, solid minerals and other forms of economy for instance furniture. We have Nigerians that can do most of the tables that we use in our offices and homes which are brought in from Turkey, Dubai, Europe and America. We can make them locally, even better ones. These things have to move, and where will they use? They are better off on the rivers direct or through the inter-modal mode of transportation.
Looking at this inland waterways transportation and even coastal exploitation, you still have the issue of security and piracy, how can we make sure that our waterways are safe?
Well, these are issues that we have but then we will not because of security which is a national problem abandon it; going by road, there are still security issues but here I know because as the President of Port Harcourt Chamber of Commerce, part of our shipping and logistic group do a lot of inland water transportation for the oil industry and we have been doing that for decades successfully. Until recently, most of the oil and gas activities were in the swamps, the creeks and the rivers in the Niger Delta and they move in a lot of equipment and these equipment move in by these barges and tug boats I mentioned. Now that those things are not used much in the industry, those assets can be availed to other uses. Then, security had always been there. Most people use the communities, the JTF and all manner of measures are put in place to curb the issue of security which I have already said is a national issue and that would not stop us from driving the economy.
Policy appears to be one of the problems of water transportation development in the country, how is it impacting on the activities of business in that sector?
I can tell you as we speak, I have complaints from some of our members in Port Harcourt; it is unfortunate and I believe that if we have to kick-start inland transportation that has to change. I will tell you practical examples of where I have complaints on my table; invoices and receipt of payments. Now, a small inland barge pushed by a small inland tug entering Onne from Port Harcourt, just two hours, just next to each other, the port charges you pay, of about $20,000, just entering in and coming back. I have Intels invoice and Intels receipt of payment, $20,000 and this thing I am talking about is just the toll gate, not the mooring or port charges and for these barges and tug boats I have described to you, if they have to be on charter daily, this $20,000 converted to naira is nearly about their two months charter as toll gate; so how is it going to work? So if you have to move items just to promote inland transportation, that we said we should start doing, so just entering there and moving out to say Onitsha, that is Intels though I do not know what transpires say from Onitsha to Lokoja; I do not know what transpires within the ports say at Lagos, we are just finding out but this is a problem we have, maybe it is peculiar to Rivers Port or Port Harcourt where Intels is the agent because I don’t want to believe that the same thing happens in other ports. If you pay $ 20,000 to intels and you still have to crane and do other things but my problem is that anything that would make toll gate so high must be changed and as a matter of fact the Port Harcourt Chamber of Commerce we are in the process of arranging meetings with federal Ministry of Transportation on the issue because it is quite important that things like this, these types of obstacles are taken away so that this means of transportation can grow.
There is a Central Bank policy that specifies that no transaction in the country should be dominated in any foreign currency, does that not apply to Intels?
No. Some of these invoices were done before that and were paid in actual dollars but now you still get the invoice in dollars and pay in naira but it is same charges.
Is it affecting business negatively?
Oh yes, as I told you, if I have to move a cargo from say Port Harcourt and we need to go to Onne which is a few minutes across just like having various ports at Apapa and I have to pay this to enter in order to pick a cargo to Onitsha or Lokoja and the toll gate alone is about that, what’s my profit?
So there is no regulation on such charges?
No there is regulation, we have taken up the issue with them and they said the barge itself which is like a trailer is weighed as a cargo, not the cargo itself but the barge which is huge and when they do their summations, it comes up to that.
Is it what obtains in other countries?
No. The truth of the matter is that all these things were happening when there was oil money. But Nigeria is not gaining much when it is oil, you enter and pay that much as toll gate, Shell or the oil companies pay and because it is a joint venture, 60/40, it is government that pays, so the government doesn’t get the money because it is in and out.
How do you think this problem could be solved?
Time for change; the good time when everything was around oil is over. It was just because of the oil ; in other places where oil was not the main thing, you don’t charge because oil was $100 a barrel, it was so much and everybody wanted to have a part of the oil money; that honeymoon is over and it is time to look at things critically. As a chamber we have moved into the issue and we are analysing it with facts and figures, evidences of invoices and evidences of payment, I’m sure something would be done about it. We have also met the management of National Inland Waterways Authority in Lokoja and they are also very happy and would want to see activities happen in the inland waterways. I believe it can be done. Look at the Mississippi River, it passes through many states in America, through many cities and over the decades, many cities have developed along the river. River Nile is also called the river of life not just for the resources but because it is a means of transportation, human and material, development hinged along the river. In downplaying oil, issues like this have to be reviewed. A member came, he had a coastal barge pushed by inland waterways, Port Harcourt into Onne and he paid $140,000 just to get in and out. It is impossible or that means of transportation is dead on arrival.
How are your members coping with the free fall of the naira against the dollar?
That is a very serious and worrying problem that the country is facing and our members are part and parcel of the country doing business. I can tell you it is troubling, we all know oil price has come down drastically from over $100 going below $30 per barrel so it means that there is less revenue from oil and knowing that Nigeria depends about 90 per cent on oil so it means they get naturally less from oil. Why is it that the problem is more here than other countries that produce oil? Look at the Naira in a free fall, the economy is in problem; I think that there are issues with les supply and more demand but again, the dramatic way it is here is not so in other countries. I believe there are many factors. Before the fall in oil price, we had issue of the Petroleum Industry Bill that was not passed and signed into law and because of fiscal issue that made the oil producers step down a bit on their activities in terms of offshore investments, that was a problem we had and this issue of freeze in investments in the oil and gas industry also is now compounding the issue. Government has done something very good by cutting down on some items and making only some items eligible for foreign exchange; it is very good because when we were told that even toothpick that Nigerians were importing, it is sad. You use dollars to import and we don’t have dollars now to import. We were importing even tables that we can make.
The good news is that we have the population of over 190 million people, good arable land mass and nearly a million kilometers of coastline; with these there is going to be a lot of activities beyond oil. Before we get to that point, there is going to be a recovery but the recovery is not going to be a V, it is not going to be a sharp fall and a sharp rise but it is going to be a U; a plateau before we rise but before then, during the plateau state, something has to be done. Government has taken one step; bureau de change there are rules about them, the President has said it is an area that is a problem that the right things were not being done, they collected the money and misapplied it and he stopped them. The other place to look is the commercial banks. Everything you talk about, the eligible items, sourcing of the foreign exchange which a customer does not go directly to source, the banks do on his behalf. What makes you think that for those eligible the banks will go and collect for company A and give to company A. There have been reports of sharp practices by banks on importers. It is not just enough to know how much that was collected but also the beneficiaries should be published so that it would not be a case of the same people benefitting or the relations of people in the banks benefitting. Just as the government has done to the bureau de change it has to be done to the banks to determine if naira is on a free fall or if it is being manipulated, a lot depends on the banks. There could be one person in different companies getting it all or the company of the management of the bank or they get the money and don’t give to people who own it.
One problem most of our members in oil and gas, logistics or maritime are facing is that not too long ago, the mantra was Nigerian content and it was a national song, Nigerian entrepreneurs brought in rigs, some brand new, others not older than five years, some oil and gas vessels to support upstream oil activities and each one cost several millions of dollars. They all flew the Nigeria flag. I must commend Nigeria banks that increased their lending and were able to fund the acquisitions in the oil and gas value chains competing with the likes of Schlumberger and others. Today with the happening in the sector there are few jobs and it means that those companies that borrowed to get these things are moored without jobs and they have to incur some costs to make them operational. So are the banks considering the reality on the ground so that it will be a win win situation or are the banks saying kill them? AMCON already have their hands full, do they want more companies going the same way? For the other ones in AMCON’S hand they are understandable, maybe mismanagement but these one it is due to no fault of theirs but due to slump in oil prices. For those owned by foreign companies, it is different because if there are no jobs they can shift out of Nigeria and they also have cheap long term funds. There has to be a way where something will happen so that they can meet half way.
We are looking at the banks like Access bank. We are looking at the complaints what is happening.
So you want the Central Bank to come in and prevail on the banks not to liquidate companies with facilities and are defaulting due to the situation?
Exactly. We have ways and means of addressing it because some of the banks are already acting like cow boys. Even still talking about the banks, export proceeds come in and can be diverted through the commercial banks if not well monitored, Exporters will get proceeds and incentives for export, they collude with the banks and sell it through the black market and the essence is lost. There is need for a closer look at the commercial banks.