Assessing Nigeria’s Maritime industry under18 years of civil rule
Nigeria returned to civil rule after about33 years of military rule. Recall that the military in 1966 sacked the democratically government headed by Sir Tafa Balewa, about six years after the country got political independence in 1960.
Successive Military administrations introduced one policy or the order aimed at growing the maritime industry. Many of such policies were designed to achieve the twin objective of making the ports efficient and competitive and also increase indigenous participation in the industry highly dominated by foreign operators.
One of such policies was the promulgation of the National Shipping Decree 10 of 1987, which created the National Maritime Authority NMA, transformed the Maritime Academy of Nigeria MAN, Oron from its former college status to a full academy to award National Diploma in addition to the establishment of Nigerdock, as shipyard to build and dry dock vessels and other equipment needed to exploit the huge maritime resources in the country.
As part of efforts to empower indigenous shipping firms, the policy also created that Ship Acquisition and Ship Building SASBF to enable enable them acquire vessels as well as the 40-40-20 cargo sharing formular both administered by the NMA, both empowerment schemes are today moribund, having faced serious challenges.
It is also on record that the Military Government liquidated the Nigerian National Shipping Line NNSL, the nation’s carrier.
It was therefore under this seeming state of instability that the nation returned to civil rule on May 29, 1999.
MARITIME UNDER CIVIL RULE
Under the new dispensation, the maritime industry has no doubt undergone a level of transformation since the last 18 years.
The industry has also had its fair share of inconsistent policies, which has remained the bane of the nation’s economy.
The first four years of democratic governance did not witness many activities in terms of reforms and policy change. What appeared to be the first significant policy under the new regime was the enactment of the Coastal and Inland Shipping Cabotage Act, 2003. This was sequel to a bill put together by private stakeholder to the House of Representatives.
The National Assembly enacted the Act, through the tacit support of the then chairman, House Committee on Marine Transport, Okey Udeh, as part of measures to encourage indigenous participation in the nation’s shipping industry and in line with the local content policy earlier introduced in the oil and gas sector.
Fashioned after the Jones Act of the United States of America, the Act, which is protectionist in nature, restricts lifting of cargoes within the inland and coastal areas to indigenous shipping companies. It however made provision of waivers in circumstances where the indigenous operators do not have the capacity to render certain services, considering their low level of efficiency and capitalisation.
It also created the Cabotage Vessel Financing Fund CVFF, administered by the Nigerian Maritime Administration and Safety Agency NIMASA.
The government in 2003 embarked on a port reform policy, which was completed in 2006.
Part of the reform objectives was to make the seaports efficient and competitive, reduce cost of doing business and also attract substantial private sector investments to the ports and therefore relieve the government of such huge cost.
The reform adopted the landlord model of Port of Antwerp, Belgium.
This gave rise to the emergence of 25 private terminal operators across the nation’s seaports spread across Lagos, Port Harcourt, Warri and Calabar.
One major feature of the reform was the stripping of the Nigerian Ports Authority NPA of its cargo handling functions and transferred same to the private terminal operators both foreign and local in order to achieve efficiency and speed in cargo delivery.
Overall, this reform has achieved some of its objectives of attracting investments, enhancing a level of efficiency. For instance, the turn around time of vessels that call at the nation’s seaports before the reform was more than 14 days as against the current three days. Also cargo dwell time has also reduced from over two months to less than one month depending on the terminal and nature of cargo.
Another segment of the reform was the re-introduction of Destination Inspection DI after nearly 20 years of Pre-Shipment Inspection, which was fraught with several irregularities.
This gave rise to the appointment of four service providers such as Cotecna Destination Inspection Limited CDIL, SGS, Global Scan and Webb Fontaine, which provided backing for the Automated System for Customs Data ASYCUDA, The others provided the Computerised Risk Management System and scanning services under an eight-year Build, Own, Operate and Transfer BOOT.
CREATION OF NIMASA.
In a bid to create a Maritime Administration that would be saddled with the port state and flag state regulations, the government merged the former NMA, the Nigerian Inspectorate of Shipping and the Joint Maritime Industrial Labour JOMALIC. Thus the National Assembly enacted the Nigerian Maritime Administration and Safety Agency NIMASA Act, 2007 with clear-cut functions and duties covering capacity building, shipping development as well as ports and flag state control regulations. Of recent the agency was also appointed the Designated Agency DA, for the enforcement of the International Ships and Ports Security ISPS Code, which has also enhanced the level of compliance to code by the port facilities. Another milestone achieved by the creation of the agency is the return of industrial peace to the industry as against the former rampant cases of strikes and shutdown by dock workers.
You will recall that the ports reform was carried out without any legal framework, as the Ports and Harbours Bill, which was to give a legal backing is still at the National Assembly 11 years after the completion of the exercise in 2006. Part of the intent of the bill was to create a commercial regulator while the NPA retains its technical regulatory functions. It was part of efforts to plug the regulatory vacuum that the Federal Government in 2014 appointed the Nigerian Shippers Council as the Economic Regulator. The council, which established the Inland Container Depots and Container Freight Stations designed to bring shipping services closer to shippers in the hinterlands and also relieve the conventional seaports of pressure and congestion several years before this appointment has really curtailed the indiscriminate and arbitrary imposition of fees and levies by terminal operators and shipping companies.
The Nigeria Customs Service has also undergone through series of reforms in the last 18 years of unbroken democratic governance. The service in 2001 upgraded to the ASYCUDA ++, which is more globally accepted. The service has also largely computerised it cargo clearing processes, especially with the creation of its Ruling House, which is an Information Communications Technology platform that has facilitated its Pre-Arrival Assessment Report PAAR under the DI scheme. It has also trained many of its officer in line with the World Customs Organisation WCO requirements towards trade facilitation.
Overall, the country has achieved several milestones in the maritime industry. But there is still a large room for improvement, as the industry is still faced with challenges. For instance, the seaports are not as competitive and efficient as their peers even in West Africa. Part of the reasons for this is the cumbersome port processes and lack of adequate road infrastructure that facilitate easy movement of goods in and out of the seaports. Only recently stakeholders comprising freight forwarders and truckers embarked on a strike action to compel the government to address the deplorable state of port access roads with the attendant gridlocks.
There are also cases of imposition of levies and fees, many of which are often duplicated by the government and its agencies, with the attendant high cost of operation. This situation is further worsened by rampant import policy summersaults that often leave the shippers more confused. The industry has a lot of potential for growth but government must put the right environment in place to make this work.