With the federal government looking to generate more revenue from the ports, a key government agency, the Nigerian Ports Authority, has been entrusted to Ms. Hadiza Bala Usman who has promised to make NPA a model agency. Eromosele Abiodun wonders if the new NPA boss is capable of turning the NPA around
When the new Managing Director of the Nigerian Ports Authority (NPA), Ms. Hadiza Bala Usman formerly assumed office three days ago, she vowed to overhaul and make NPA a model government agency.
President Muhammadu Buhari had in a bid to revive NPA last week appointed Usman as the new NPA boss making her the first female chief executive of a top tier federal government agency and of the NPA.
She took over from Alhaji Habib Abdullahi, who was reinstated by Buhari in August 2015 as the MD of NPA, after he had been shown the exit by former President Goodluck Jonathan in April 2015.
Speaking after shortly she took over from Abdullahi at the agency’s Head Office in Marina, Lagos, Usman said the country expects much from the NPA.
She told the team: “Our ports are a critical artery of the economy, and it is our duty to ensure that the operators deliver port services at the standards that our businesses deserve in the 21st century in supporting President Buhari’s administration agenda of economic diversity. We will strive for enhanced operating efficiencies to facilitate improved revenue generation and inflows into the national treasury.
“We will listen to our customers, importers, exporters and other agencies working in the Ports to improve on our service delivery to the nation, anything less than world-class services is simply not acceptable; attaining such heights is a mission to which I am certain we can all subscribe.”
She added: “As team leader, I have come to add my best efforts to yours so that we can collectively achieve results for our industry. We must work as a team, pursuing common goals with professionalism and diligence. We shall prioritize investment in primary equipment and infrastructure and services committed to by NPA in the concession agreements to hasten clearance of imports and exports from the ports. As we collaborate in the best traditions of public service, I believe that with commitment and diligence our hard work can position NPA as a model agency.”
To function as effective regulators, the new NPA boss stressed that all staff of NPA must commit to the highest standards of performance and cohesion.
“Let us all uphold the most diligent work ethic, in our individual beats as well as in the collective undertakings required to achieve results. Everyone at the NPA has a role in promoting best practice, in upholding governance standards and in delivering quality services. We will work hard, with integrity and with zero-tolerance for corruption.
“As the new management settles down, we will be listening to your concerns and suggestions as we navigate the best options for effectively discharging the NPA’s mandate. But we will not shirk our responsibility to provide the leadership to improve the NPA. I hope that we will do it together,” Usman declared.
Mixed reactions have continued to trail Usman’s appointment, with some describing it as a desperate move that “may backfire soon”. Their reactions stemmed from the situation that led to her emergence as the new head of NPA.
THISDAY had exclusively reported last week that the Minister of Transport, Rotimi Amaechi decided to make the change at the agency in order to overhaul the NPA.
Amaechi, it was gathered, was not particularly impressed with the way the NPA was being run and decided to effect a change of the executive team. However, there are questions about her competence.
With the decline in oil price and the continuous slide in the output of crude oil due to the militancy in the Niger Delta, the Nigerian ports have assumed unprecedented relevance. Revenue flow from taxes, levies and duties at the port will be relied upon to a large extent to run the nation’s economy. Some critics are not convinced that Usman possesses the required skill and experience to pilot the affairs of such extensive and multifaceted organisation background.
Usman was until her appointment the Chief of Staff to the Kaduna State Governor, Nasir el-Rufai, and a member of the All Progressives Congress (APC).
She grew up close to the ABU campus where her father worked and obtained her Bachelor’s degree in 2000 from the same university and her Master’s degree from the University of Leeds in 2009.
She worked for a non-governmental organisation, the Centre for Democratic Development and Research Training (CEDDERT) in Zaria, as a research assistant for a year starting in 1999.
She also worked for the Bureau of Public Enterprises (BPE) when el-Rufai was the director-general of the privatisation agency and moved with him to work as his Special Assistant on Project Implementation.
In 2011, she worked as Director of Strategy for the Good Governance Group (3G). In 2015, she was appointed Chief of Staff to the Kaduna State governor.
She shot to national prominence in 2014 when Boko Haram insurgents kidnapped 276 girls from secondary school in Chibok, Borno State.
Following in her father’s footsteps, Usman, in conjunction with the former Minister of Education, Mrs. Oby Ezekwesili, co-founded the #BringBackOurGirls (BBOG), which brought global attention to the plight of the kidnapped schoolgirls.
Any Hope for Nigeria?
Although she is yet to unveil her programmes or how she intends to make the NPA a model government agency, stakeholders in the maritime industry believe she has a huge task ahead.
This, they said, is because government policies and age long problems such as post concession policy crisis, passing of the Ports as well as the Harbour Bill, currently before the National Assembly, port operations and regulations issues are much more glaring even now.
They added that top in her agenda, must be the fixing of the none-existing infrastructure that is driving away cargos from the Nigerian ports
Industry players told THISDAY that the areas she will need to focus on immediately should be the rehabilitation of port access roads and reversal of certain policies that are not friendly to the growth of the ports.
While admitting that fixing roads is not NPA’s direct responsibility but that of government, they urged her to use her good office to get the appropriate government attention to the dilapidated port access roads.
They also urged the NPA boss to work with the Nigeria Customs Service (NCS), the Central Bank of Nigeria (CBN) and the Ministry of Finance to review policies that have taken cargoes away from Nigeria’s ports.
These policies, they said, include the National Automotive Policy, the fish quota system, the hike in rice import duty and the CBN policy, which excludes 41 items from accessing foreign exchange through the official window.
The stakeholders stressed that all the policies put in place by the past administration, are only promoting the diversion of Nigerian-bound cargoes to the ports of neighbouring countries and the smuggling of goods into Nigeria. They are not alone, Usman’s predecessor, Abdullahi had while reviewing activities in the sector in the first quarter of this year admitted that all was not well with the sector.
Abdullahi in x-raying the first quarter operational report of 2016 said that generally, the level of operational activities at the port locations in first quarter of 2016 dropped significantly when compared with the same period of 2015.
Analysis of the performance revealed that though all cargo types declined during the first quarter, container and general cargo traffic contributed significantly to the overall drop in cargo throughput.
Consequently, the former NPA boss said there is urgent need to complement the efforts of NPA’s massive investment in infrastructural renewal and automation of our port operations, “by generating enough export cargo to make up for the shortfall of import cargo being witnessed in our ports, which could be attributed to the reduction in government expenditure (a laudable and broad plan of the government to rebuild the economy), the exchange rate volatility as well as global economic crisis.”
In this regard, Abdullahi said that the authority did an analysis of port capacity as a catalyst to economic development through export commodities.
“Our analysis revealed that about 90 per cent of container traffic left the shores of Nigeria empty. This position was communicated to the Nigerian Export Promotion Council (NEPC) by NPA management and highlighted the need to sensitize Nigerians on the need to fill the vacuum through export commodities, especially Mines and agro-allied products.
“An action plan has been initiated by the Authority by setting up interactive and follow-up sessions with the NEPC, Abuja Commodities & Exchange Commission (ACEC), The Federal Ministry of Solid Minerals Development and Nigerian Chambers of Commerce (NCC) (Lagos and Abuja branches). The interactive sessions could be said to be productive especially in the area of information sharing and data exchange,” he said.
Ship and Gross Tons
Analysis of the performance of the sector showed that in the first quarter of 2016, a total of 1,131 oceans going vessels and crude oil tankers with a total Gross Tonnage (GT) of 59,441,614 called at Nigerian Ports.
In the period under review, Lagos Port Complex (LPC) recorded a GT of 8,195,979 showing a decrease of 11.5 per cent from 9,262,792 GT achieved in the first quarter of 2015. A total of 296 vessels were handled during the period.
On its part, Tin Can Island Port handled a total GT of 11,853,587, showing a decline of 1.2 per cent from the 12,260,427 GT achieved in the corresponding quarter of 2015. A total of 417 vessels were handled in the period under review.
Calabar Port complex handled a total GT of 776,718, showing a decline of 15.4 per cent from 918, 237 GT in the first quarter of 2015. A total of 46 vessels were handled in this Port this same period. Rivers Port complex recorded a total GT of 1,253,616 showing 14.2 per cent drop from 1,461,562 gross tons in the corresponding period of 2015. A total of 79 ocean going vessels were handled within the period under review.
Onne Port complex recorded a GT of 9,851,240 reflecting a decrease of 13.4 per cent from 11,371,820 gross tons recorded in the corresponding period of 2015 with 176 vessels handled within the period.
Delta Port Complex during this period under review recorded 1,756,305 GT, showing an increase of 4.7per cent over the 2015 figure of 1,677,915 gross tons, with 117 vessels handled. Crude Oil Terminals recorded 25,754,169 GT, indicating a decrease of 12.5 per cent from 29,424,223 GT in 2015 with 221 tankers completed.
Cargo Throughput is the total volume of Cargo (inward and outward) handled in all the port locations during this period.
The numbers released by the NPA showed that Cargo Throughput recorded during this period stood at 43,347,523 metric tons, showing a decrease of 12.6 per cent from 49,604,516 metric tons recorded in 2015. Analysis of cargo throughput revealed that; general cargo was 1,893,519 metric tons, a decrease of 48.1 from 3,649841 metric tons recorded in the corresponding period of 2015.
Dry Bulk Cargo stood at 2,176,725 metric tons as against 2,306,938 metric tons achieved in 2015, indicating a drop of 5.6 per cent. Liquefied Natural Gas (LNG) shipment was 5,079,262 metric tons compared with 5,459,402 metric tons in 1st Quarter 2015, showing a drop of 7 per cent. Refined Petroleum products stood at 5,030,044 metric tons, a drop of 4.6 per cent from 2015 figure of 5,273,464 metric tons. Laden Container Throughput was 194,304 TEUs, decline of 12.6 per cent from 222,363 TEUs in 2015.
Empty Container Throughput was 123,427 TEUs, showing a drop of 19.5 per cent from 2015 figure of 153,366TEUs. Crude oil Shipment was 25,754,169 metric tons, indicating a decrease of 12.5 per cent from 29,424,223 metric tons figure in 2015. A total of 27,133 units of vehicles were handled in the period under review showing a decline of 10 per cent from the same period of 2015 figure of 30,139 units.
STOAN Hails New Era
The Seaport Terminal Operators Association of Nigeria (STOAN) has described the appointment of Usman as the NPA MD as a welcome development
Spokesman of STOAN, Bolaji Akinola called on the new NPA boss to take immediate steps to turn the industry around.
According to him, “We are confident that she will do her best; her wealth of experience at the BPE and as Chief of Staff to the Governor of Kaduna State will certainly come handy in the discharge of her responsibilities at the NPA. We want to assure her of terminal operators’ maximum support and cooperation.”
In a chat with THISDAY recently, the Executive Vice Chairman/Chief Executive Officer of ENL Consortium Limited, operators of Terminals C and D of the Lagos Port Complex, Apapa and Chairman of STOAN, Vicky Haastrup noted that one of the major problems of operators in the sector is the high cost of operations.
“I need to stress that the high cost of operations at the Nigerian ports was not caused by the terminal operators. There are various charges been imposed in all importers of goods to Nigeria other than the charges of terminal operators. As far as I know, those other charges contribute about 85 per cent of the aggregate charges. If you look at it, terminal operators have their own legitimate charges related to services we offer. We have investments on ground.
“We have to discharge the ships; we need to buy equipment to discharge the ship. We need to develop the port. We have welfare packages for dockworkers and all the other staff. We have to take care of the environment, we have security to take care, and we have to keep the goods, so we have a whole lot to do when it comes to discharging the ship. It is a lot of responsibility.
“So, when you look at our charges compared with others charges, like I always said, there are other people who impose charges in the Nigerian port users other than the terminal operators. You have the shipping companies, you have the clearing agents, you have government agencies in the ports, logistics providers and when you add all these up together, the terminal operator charges are not all that much. There isn’t much we can do about these other charges but I think some of them can be eliminated or scrapped to reduce cost of doing business at the ports.”
She urged that the Nigerian ports should be run the way other ports are run, even as she enjoined the government to reduce the multiplicity of agencies in the ports.
“I don’t know what some of these government agencies are doing in the ports if you ask me. We need just three or four basic government agencies that are primarily required at the ports. There is need for Customs Service, Immigration Service, Port Health, to some extent the National Drug Law Enforcement Agency (NDLEA). I don’t even think we need them in the port as far as am concerned because the scanner is there to scan the goods, so why do you need NDLAE in the port,” she said.
Foreign Exchange Crisis
On the impact of the flexible exchange rate regime, she said the new policy is highly commendable.
“If you look at the port terminal like ours for example, the number of ships that I have handled from January till today is actually the number of ship I normally handle in a month. And what is responsible is simply not being able to have access to forex. The importers of goods do not have access to forex in Nigeria and that is the kind of inhibition they were suffering from.
It was a major constraint for everyone and that has affected cargo imports into Nigeria by at least 50 per cent. So, the volume of import has drastically dropped. It’s good the CBN has formulated a new policy which I think is good, where naira is allowed to find its true value. It is flexible enough, it can be N250 to the dollar in the morning and by afternoon, it can change.
“The Naira would find its true value and that is actually good for business owners which would enable them to make projections and plan effectively for their respective operations. The system we had before did not allow anybody to plan, what everybody did was just to ‘siddon look’. So, this system that is been put in place, if duly implemented, is a welcome development but further than that, government should please look at the issue of those 42 items that are banned.
It is important. They are not valid for forex. If they are not valid for forex, importers will have to go to the so called black market. That is not still good for business. To me, that is a restriction and the economy activities are being hampered by that. And I believe it would affect the manufacturers of goods in Nigeria.
On his part, the National President of the Council of Managing Directors of Licensed Customs Agents (CMDLCG) and a member of the Presidential Committee on customs reform, Lucky Amiwero, said the new NPA boss must push for the passage of the Ports and Harbour Bill before the National Assembly.
He said: “We are now in the post concession era at the ports and we have four elements and three components. The three components are port operations, port regulations and landlord. The model we are operating today is landlord port model even though we don’t have the law to midwife it. But the part that has to do the port authority is the marine side of it which has to do with dredging, pilot quarters, tug boat, channels and lights. When you look at dredging we are at the same level with Ghana, Togo and others. Whereas more ships are going there, they are avoiding our port that is one area the new head of NPA must look at.
“The second area she must look at is the access roads, the roads are supposed to be maintained, control and managed by NPA. There is a need for proper restructuring and fast-track the process of passing the ports and harbour bill before the national assembly. There is a need for her to review and restructure the entire system at the ports to be able to accommodate and get back our cargos that we are losing to neighbouring countries. Ghana has taken over our traffic and Benin has taken over our transhipment, others are going to Togo because of the facilities there.”
He added Usman has a lot of work to do in terms of repositioning the ports.
Furthermore, he said: “She (Usman) should look at the process at the ports. We are now at the marine process not regulatory process. She should look at the concession policy and see how she can harmonise the views and bring everybody to the round table. She was at the BPE that was involved for driving the concession process but the BPE has not been able to take control of it. To monitor and implement the contract terms of the concession is the work of the ICPC, but there is need for the new NPA boss to harmonise the views and bring the Nigerian shippers Council (NSC) and other stakeholders to the round table so the she can effectively manage the ports.”
Speaking to journalists recently, the Managing Director of one of the biggest shipping lines in Nigeria, Grimaldi Agency Nigeria Limited, Mr. Ascanio Russo, predicted that the new forex regime introduced by the CBN will affect the cost of doing business at Nigerian ports.
Russo, whose company operates the Port and Terminal Multi-services Limited (PTML), however, explained that the move is a welcome development as it will bring about clarity and transparency in Nigeria’s economic terrain.
He said: “We believe that the new CBN policy on forex is the right step in the right direction. However, we are waiting to see the impact on Nigeria’s international trade. In principle, we believe the move is positive because it will bring clarity and transparency to the economic terrain. Eventually, it is going to be good for the Nigerian economy.”
On the impact on the volume of trade at the port, Russo explained that, “it will be very difficult to make any prediction on its impact on the volume of businesses at the ports right now. We will need to access it in the next few weeks to be able to give a candid opinion on that. Why it is difficult to give an outright prediction of the new policy on the volume of trade at the ports right now is simply because the new policy will lead to the devaluation of the naira; which in turn means importers will now spend more to bring in goods into the country.
“Again Customs duty will automatically go up because they will be calculated on the new foreign exchange rate. By the time Customs duty goes up, we shall then see where the naira will balance with the dollars. With all this indices, it is very difficult to calculate if there will be a reduction or growth in the volume of businesses at the ports. But in the long term, it will bring clarity and transparency which are positive indices for business predictions.”