The Nigeria Port Authority is, no doubt, the cash cow of the economy. It is, however, beset with a few challenges, in recent times. In this interview with Kunle Aderinokun, the Managing Director of the port authority, Mallam Habib Abdullahi, addresses issues affecting its operations, as he unveils plans to make some of the nation’s ports dedicated terminals for exportation, in line with the diversification drive of the President Muhammadu Buhari-led administration
You have been in the saddle for about one year. How has it been?
I have been in the system for a very long time; therefore it is not new to me. I was an assistant general manager and executive director, before becoming the managing director of the authority. So any other challenges I must have encountered when we first came in, may not necessarily be new to me. But in the last few months, there is a new government. The change of government is a complete change of regime, ideas and philosophies.
It is an overhaul of the whole system. With these changes, there is bound to be challenges. These changes will not only be in the maritime sector, but in the overall economy. The government will have to sit down and think of the problems facing it. This, in itself, made us to face some challenges. Maritime sector like any other sector is affected by policies of government. In the last few months, we had some policy challenges and we were waiting for the government to be stable. We would also try our best as an industry to see how we can best face these challenges.
What are some of these challenges?
Maritime sector is dependent on import and export of goods. Right now, there is less business in the port, which means less revenue and this is a very big challenge.
In which way has the current policy direction affected the fortunes of your operations?
There is a foreign exchange challenge, which is related to the revenue of the nation (which is highly dependent on oil revenue). We are very much connected to the world economy, but industries are dependent on world trade. So in that way, it is impacting our activities. Whatever impacts negatively the national revenue will definitely have a negative impact on us.
If you look at goods and service, we are less by about 10 per cent. Looking at the ship tracking, the number of ocean-going vessels last year is 5,900, a decrease of 8.1 per cent from 5,500 in 2014. The gross tonnage of ocean-going vessels is 124,200, 722, a decrease of about 2.5 per cent from where it stood in 2014. The number of coastal vessels is 10,200, a decline of about 59.9 per cent. If you look at all these ship tracking and cargo tracking, you will see that it has some negative impact on our revenue as a nation. When you look at it, it is less 10 percent of the revenue we received in January 2015.
How are you re-orientating the port so that it attracts exports, because when challenges come, you need to re-arrange the port?
We have to follow the current thinking of the new government, which is diversification of the economy so that we are less dependent on oil, which is the government policy direction. What we are trying to ensure that we encourage export and we have written letters to the Ministry of Agriculture and Nigeria Export Promotion Council. There is quite a number of empty containers in the port, if we can take them out and encourage people to export; people are exporting different agricultural products.
If we do this, it will diversify the economy, we have quite a number of solid minerals as well. So we can diversify the economy into agriculture and solid minerals, in order to utilise those containers that are lying idle in the ports , instead of being taken away empty. This is to encourage exports. This is one area we can diversify and compensate for the revenue we are losing.
How are you preparing the ports, especially the various terminals to accommodate the volume of exports that come, in line with the change agenda?
We have to work hand in hand with the concessionaires. You know the terminal operators are the ones running the ports, therefore we have to re-orient them. At the same time, we are also synergising with Nigeria Customs Service, to see if we can make some dedicated terminals for exports. We had a meeting with the Comptroller of Customs at Ikorodu recently. In Ikorodu, the number of empty containers is huge and the place is messy. So we are trying to see how we can make Ikorodu an export terminal.
We have some interested parties that are coming in, and they are trying to help with some dedicated ports. We have the Ilaje port in Ondo State; the former Olokola port that was being promoted by Ondo state government, because of certain things, Ondo decided to go on its own. They are trying to dedicate that port to solid minerals. So quite a number of people are coming and they are showing interests. We have dedicated ports and our terminals for export.
It appears we are overusing Lagos port and the congestion is much. Before, we were using Sapele, Warri and Kaduna ports but today, they are not functioning actively. What are you doing to bring them back to life so that they will be involved in the exportation of goods and agricultural products can flow easily?
Interestingly, quite a number of people do not understand our functions and roles in the maritime sector. Now that all the ports are being concessioned, all we have to do is to give the necessary infrastructure to all the ports. It is now left for government to encourage. Also, the concessionaires and the terminal operators are expected to encourage people to use them. Interestingly, people decide to use Lagos, even when it is choked up. Instead of people using ,for instance, Calabar which although have some impending problems but with its sea port several depths higher than Lagos; people do not still use it even when it’s having the West African container terminal there. Even though quite a number of things that are coming, goes to Aba market, people prefers to come to Lagos.
You talked about development of Infrastructure. Over the years, the Apapa Tin Can Port, in Lagos, has been experiencing challenge of moving goods. What is NPA doing to address the challenge?
Again, I would like to state here that it is not our responsibility to create access roads into the ports. It is not in our powers; I wish it were, we would have done them, because it is very disheartening and challenging to us. This is because anything that happens, they blame NPA. But access road is the responsibility of the federal ministry of works, Lagos state government as well, especially regarding certain policies. It is also the responsibility of the local government, but we assist them. We spend quite a lot of money.
Last year, we spent N500 million , in order to carry out our Corporate Social Responsibility (CSR). It is not our responsibility, but we have to do what we can, to ensure that these port issues are treated to promote easy flow. The only thing we can do is within the port. There are places we are developing infrastructure within the ports. There is the 1.6 kilometres dual carriageway road that was done in Apapa. We are also trying to do similar works in Tin Can Island. The federal government is doing something about it. There is already a committee (of which we are members) to ensure that there is access road; government is also giving the contract from Oshodi to Apapa.
Could you please speak on the inter-modal transportation, even though it may not be your responsibility?
The inter-modal type of transportation is one of the key issues that I forgot to mention when I was talking. If only railway is working as it used to be, all these congestions would have eased off. Our responsibility is to develop the rail system, which we did. If you remember about two years, this railway we built in the port was commissioned around the ENL area. Also in Port-Harcourt, we are developing the infrastructure within the port, and I think the work has gone 93 per cent. It is being completed which is our own responsibility, but as I said we just take it to the point of the ports and leave the rest for the Nigeria Railway Corporation (NRC). But there has to be an articulate policy.
Due to the decay in the rail transport subsector, the government is now giving priority attention to the sector, which can be seen from the budget.
We say we are losing revenue, and you discover that Nigerians import their cars from Benin Republic and Togo, it all amounts to the fact that cost of doing business here is high, bringing in materials and clearing them. Can there be technologies that will reduce the cost of doing business?
People don’t import their cars through Cotonou, instead they smuggle cars through Cotonou. It is ridiculous ! People are complaining that this port is congested but they’ve forgotten that there are other factors that are militating against bringing in goods through the port. They say the port is expensive, but it is not so, when you compare with others around the world.
Our port is relatively competitive, and the terminal operators are making a living from there otherwise they would not have been there.
One of the criticisms against agencies like NPA is that they appear to be comfortable being rent collectors and with the new thinking in town, one expect that NPA should look at other ways of generating money instead of just collecting rents from concessionaires. What is your administration doing to address this?
Collecting the rent is very difficult because we are owed a lot of money. We have our own responsibility; we don’t go outside our mandates. We have other cargo shipment dues, pilotage dues; we are trying in our own way to see how we can expand and set up a few things. We have the Seaview Properties, a subsidiary of NPA. There are so many challenges; we need to have a good orientation, because we were doing the business before, now we are just the landlord. There is a change of mandate; we have to start thinking of how best we can expand so that we get some revenue.
Recently, the finance minister was supposed to visit here with regards to some revenue generating agencies; they have become more of an Octopus, to the extent that some are richer than the ministry. There are some areas they are hiding under such as operating expenses, they hide under it; what they are supposed to do, they do not do it and wait for government subventions. Therefore most of these agencies are riddled with so many things. With specific reference to NPA, I learnt that there are opportunities that are not being tapped. The maritime sector only can sustain the economy to a large extent, we have the cabotage law and the local content, but most times, these things are at a surface level. People come in, do their own bit and go. What is your response?
In what you are saying there are some contradictions; we don’t collect subventions or money from government, we are self-sustained agency. We are expected to even to give some money to government. When we first came in 2012/2013, we remitted N15 billion; the highest amount that was ever remitted was N2 billion. From that 2012 to now, we have remitted up to about N60 billion. The NPA has tried relatively in sustaining itself. More than75 per cent of Customs collections is from the maritime sector.
People think the maritime sector is only Nigeria ports authority. It is not correct. More than 75 percent is from the port, so we consider that it is part of maritime. This is why whatever we collect is part of maritime; if you aggregate the revenues that we collect in form of taxes and others, you will realise that we are getting huge amount of money. The maritime sector is huge, but people focus on the small aspect of it. The private investors coming to invest in Nigeria are bringing money and also assisting the economy. So if you look at it from that aspect, the sector is huge and we should do more, but the sector cannot exist on its own. It is dependent on the policies of the federal government; transport policies and others. Therefore there has to be an enabling environment for the maritime sector.
You stated that it is a little bit difficult collecting rents. How many of them are owing, because we learnt that almost all the concessionaires are owing and some threatened to go to court that they were not owing. Some of the concessionaires stated that their rents would be due in 2016, but have been extended by five years without evaluating what they have done. What is your reaction to this?
First and foremost, there are quite a number of them that we owing, but for a business like this, it continues, periodically, we sit down and sign. It is an issue that monthly, we sit and properly evaluate the rent and collect the money. There are different types of funds that we are supposed to collect from them, it is not only the lease. Government is very much aware of what we are doing, the only thing we need to do is to comment on it and send to them.
Due to the challenges that we started with, the question of the TSA, which some of them don’t know what to do. On the issue of foreign exchange, we insist that they must pay us in dollars and we agreed on that. They are saying that they cannot access the foreign exchange in naira. As far I’m concerned, what they are collecting is in dollars not in naira. So they should pay us in dollars.
Therefore these are the challenges we are trying to sort out. Part of our responsibility is port development which we have to do; some of them, they want their key sites, since the volume of business has increased. Some of these key sites have been there for many years, for a place like Lagos, it has been there for 50, 60 years.
While in some areas, it has collapsed, we have so much challenge that we cannot do everything on our own, so these concessionaires volunteer to assist us, but they request for two or three years more so that they can collect back their money. It is because of this reason that we have to write to government through the federal ministry of transportation, Federal Executive Council (FEC) and NCP. It was NCP that gave this extension based on our recommendation that a particular concessionaire has done X Y Z project, which has to be confirmed (also the amount of money spent on the project). So, in order to recoup their money, we have to extend to their period by one, three, four five years. So in most of these cases, that was what happened.
When Port Harcourt was concessioned, the two terminal operators there inherited a bad structure. The port is over 100 years, they agreed to fix the key one which is their responsibility, not the responsibility of the concessionaire and they did it, then the recovery agreement was made in order to recover the money they invested there. This is what he has just explained.
Still on this concession, some of your traditional mandates have been taken up by these concessionaires to which extent has this affected your revenue generation coffers?
It has affected it positively. When we were operators, we also took care of the infrastructure, and engineering works. We spent a lot of money on it; there was also a lot of patronage. This was the essence of port report, so that this responsibility will go to the concessionaires.
So by doing that, government become more efficient, the port operation also becomes more efficient. We were also assigned to take our own part of the responsibility.
The volume has increased, people now have to go out and look for market (which are the concessionaires themselves) , which increased the volume of business. If you compare what we were earning in 2005 to 2006, and what we earned in 2015, the difference is over 1,000 percent. What we are collecting in this crucial time, is much higher than what we collected in the past, so it has helped us. I disagree with what people say that the concession was not a success. But there are challenges and I believe that we should have been much better.
There is confusion between the role of the NPA and the role Nigeria Shippers Council. But for now, it appears that the shippers council is in charge of ICTs. What is supposed to the role of the NPA or is it a professional body?
It is left to government to decide what their role is. They said we are technical regulator, that is what it is. Now they say the shippers’ council is economic regulator, it was done by the ministry of transportation and the president.
Is it possible for Lagos, Port Harcourt and other major ones to operate 24 hours?
We are having 24 hours operation. Aren’t we? Some of the ship and cargoes even berth in the night. You also have to look at the other factors, the environment that will operate, but I think Lagos is fully operational, though there might be some problems, but even Lagos is 24 hours. Port operations are dependent on other agencies, such as the Nigeria Customs. The NPA does much of the work. We ensure that things are done correctly, and quietly. We don’t take requests or have anything to do with containers. We don’t clear goods. People are not aware of that, we have to ensure that ships are brought into the port.
What then will the little ships be doing in NPA and at Private Jetties?
There is a presidential committee on private jetties, which NPA is a member of. When ships are coming in, there is security in the NPA to ensure their safety.
In some of these free trade zones that operate freely, do you derive revenue from them?
It is not the responsibility of NPA to have anything to do with free trade zones. Free trade zones have their own responsibility and management. Maritime activity is at jetty and it our duty is to ensure that things are working well. So nobody collects revenue on our behalf. What you are referring to is probably customs duties whereby there are customs, NPA officers and security experts. It is the responsibility of NPA officers (port managers or harbour masters) to decide where a ship goes if it is within the port. Some of these private jetties fall within the port jurisdictions, they may fall under Apapa or Tin Can Island, Rivers and Calabar port. Therefore they may fall under the harbour district.
What is the progress on the Lekki port?
The Lekki port is going fine; Delta state government and the NPA are very interested in it. We are doing what we are supposed to do. We are now paying proportionately and it is taking off. By now, we are thinking of the ground breaking ceremony which the Mr. President may be part of .
What is NPA as an agency doing to align itself with the vision of the present administration in terms of port development?
My primary responsibility for the NPA is to raise more revenues for government. We also tend to work to assist in expanding the economy, so that the nation does not become oil dependent. This we believe will encourage export promotion. We will also work with the government to encourage foreign direct investment. Primarily, our focus is on revenue, expansion of the economy, diversification and foreign direct investment.
What is the progress with the Calabar dredging?
The project is also under some government considerations, but there are some issues. Presently, the dredging has stopped and government is trying to find out what is responsible. After which they will direct us on what to do.
Would you say that you have done your best to position the port authority to face the challenges that are coming?
I have not but I’m trying my best. There are quite a number of challenges. To operate in this environment is very difficult. Before I was appointed to this position, I was posted out of the country, to be overseas representative and I worked for six decades as Acting Executive Director, before becoming the Managing Director.
The way things are going, it is really challenging not for me only, but also for those at the helm of affairs, in the sector including the minister. I thank God, those assigned responsibilities in this government are given free hand to operate. I can say that I’m more confident.