The Rising Call to Privatise Under-performing Maritime Agencies

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Against the backdrop of renewed call to privatise some maritime institutions in the country, Olaseni Durojaiye presents views of operators to the call and the attractiveness ratio of the institutions among investment experts

One of the fallouts of Nigeria’s reliance on oil over the years is, no doubt, paying less attention to other sectors with huge revenue generation potential and leaving the managers of the sector to their whims. This has seen some of them perform below level and failure to contribute optimally to the commonwealth of the nation.

The maritime sector in particular has been attracting attention and concerns in recent time. The attention shift to the sector appeared to be due largely to the nosedive in the nation’s revenue owing to slump in oil prices and importance of the sector towards revenue generation and economic growth. This is so because while the boom lasted, the country’s importation profile was massive so much that some stakeholders tinkered with the idea of making the country’s seaports the hub of the sub-region.

Besides, in the light of finding solutions that will shore up the nation’s depleting revenue, some commentators described the sector as a low-hanging fruit arguing that if well monitored, the harvest therefrom will augment the lean revenue accruing from oil sales. While that is yet to be done, a couple of institutions in the sector continue to court headline news for the wrong reasons.

THISDAY investigation revealed that operators in the sector have over time lamented lack of professionalism and transparency in the running of some of the institution that were set up to drive growth in the maritime sector. Some of the institutions in the sectors that have received flaks from operators in the sector include Nigerian Maritime Safety and Administration Agency (NIMASA), National Inland Waterways (NIWA), Nigeria Port Authority (NPA) Maritime Academy of Nigeria (MAN) among others.

THISDAY checks revealed that these institutions either singly or collectively, are guilty of one or more of the complaints against them which include lack of professionalism, graft, transparency or under performance as regards contribution to economic growth, equity contributions to national wealth or rent collection.

Though some commentators alleged that the Nigerian Ports Authority (NPA) has been reduced to rent collector in the aftermath of the concession of some port operations to private companies, Managing Director of the government parastatal, Habib Abdullahi, however in a recent interview told THISDAY that the company was in the process of dedicating some ports to export. In the light of calls for the country to grow its export profile, analysts have hailed the initiative.

In the case of NIMASA, some marine safety operators told THISDAY that there is a breath of fresh air into the agency since the change of guard. However, findings revealed that it will take some time before that changes the perception of the agency as haven for graft. That perception is not unconnected to revelations in the court proceedings involving one of the agency’s former director general who is undergoing trial for graft.

Former President Obasanjo’s Call

The under-performance in the sector was again reiterated by former President Olusegun Obasanjo during the opening day of a two-day Maritime Sector Stakeholders’ Conference which held in Lagos during the week. Suggesting solutions to make under-performing institutions work, Obasanjo reportedly canvassed privatisation and mentioned the example of the Nigeria Liquefied Natural Gas (NLNG), which he said had been making profits and contribution to the economy since it was privatised.

“The institutions that are important in the country, which have not worked, we have to make them work. We can use the Nigeria Liquefied Natural Gas company as a model. We should look into these areas and think outside of the box. Until the Nigerian Maritime Safety Administration Agency became a place where people stole money, nobody knew much about it. Now everybody wants to work there. Look at the National Inland Waterways (NIWA), Maritime Academy of Nigeria and the Nigerian Port Authority which we tried to privatise. These are institutions we can make to work,” he stated.

Stakeholders’ Reactions

Operators in the sector, some of who bear the brunt of the lack of professionalism and efficient running of the sector welcomed President Obasanjo’s call for the institutions to be privatised. A cross section of them expressed their support for the call in different interviews with THISDAY during the week.

While supporting the call to privatise under-performing maritime institutions they accused current managers of some of the institutions of lackadaisical disposition towards the management of their institution. Another respondent added that privatisation will usher in more professional and efficient running of the institutions.

“I support the call to privatise non-performing maritime institutions,” Vice President of Nigerian Association of Freight Forwarders (NAGAF), Fred Akokhia, said in a telephone interview, adding that “running these institutions is not rocket science; put them in private hands and they’ll work professionally and efficiently.”

Another operator, Managing Director of SOLAS Marine Limited, an operator in the safety on sea subsector, Samson Okotete, also supported the call. According to him “I believe it will further sanitise the sector. Fine, we are seeing some improvement in the operations of agency like NIMASA in recent times, there is still room for improvement. Privatisation will no doubt improve service delivery and efficiency level among others. Again, with privatisation, the type of fraud case that a former director general of the agency is accused of will not repeat itself,” Okotete opined.

Speaking further Akokhia stressed that, “If you put it in private hands, they know that they have to make profits, they will run it far more efficiently and professionally. If you look at the gains of the concessions of some port services to APM Terminal and others, then you can imagine the gains that we would reap from privatising the institutions. Even if we don’t want to privatise now, we can commercialise them. What we beg of government is to provide them with the enabling environment to operate,” he added.

Investment Experts’ Take

As support for privatisation of the institutions swell among operators, it has emerged that some of the institutions may be in line for some form of tweaking. In response to THISDAY enquiry, Head of Public Communications, Bureau of Public Enterprise (BPE), Alex Okoh, clarified that “NIMASA is not in our schedule and is not for privatization due to the its functions. It is a regulator of a sort.” He however pointed out that, “NPA does certain activities that may be considered for privatisation. Examples are marine services which include pilotage and towage. This is in addition to terminal operations which are already concessioned to private terminal operators. NPA as an organisation will become technical once the new port and harbor bill is passed.”

“National Inland Waterways Authority (NIWA) is also for concession. Operations of inland water way routes and management of jetties will be concessioned to private sector. Like NPA, NIWA will become sector technical regulator when the new NIWA bill is passed,” he added.

Even then, THISDAY findings further revealed that if the current administration opted to privatise any of the institutions, they will not be short of interested investors even though privatising the institutions will need a lot of “clarity”.

An investment executive with CDC’s Africa Fund, London, Gozie Chigbue, told THISDAY that “it is an area that private investors will find interesting but it requires a lot of clarity. There are several organisations out there that has run ports in other economies before, organisations that have the competence and expertise in maritime operations who will be willing to invest. However, prospective investor would want to know who ensures fair practice and what role will government play post-privatisation of a company like Nigerian Port Authority among other concerns. They will also need a lot of clarity in terms of regulation,” Chigue explained.

Though he agreed that the sector will interest investors, Managing Director of APT Securities, Garba Kurfi, noted that privatisation was not the best way. He argued that even with the partial privatisation of the ports operations, under the concessionaires, they have not fared significantly better than when they were under the full control of the NPA.

“Investors will be very interested in the sector. But I don’t agree that the solution is privatisation. Rather it is going public, definitely not selling it to some individuals. Government has done partial privatisation of the port via concessions, but the operators of the terminals have not demonstrated best practice standard in professionalism and efficiency in their operations,” he concluded.