At Taiwo Afolabi Maritime Conference, stakeholders seek new cost regime …Insist on inclusive policy formulation framework
From left: Representative and daughter of Dr. Taiwo Afolabi, Miss Mariam Afolabi, former Managing Director of Nigerian Ports Authority and Chairman of the occasion, Chief Adebayo Sarumi, Lecturer and Staff Adviser, Maritime Forum, Faculty of Law, University of Lagos, Dr. Adewale Olawoyin and Executive Director , SIFAX Off Dock and one of the panelists , Major Henry Ajetunmobi (rtd) at the third edition of the Taiwo Afolabi Annual Maritime Conference held at the Main Auditorium, University of Lagos on Friday.
BY FRANCIS EZEM
It was a gathering of who is who in Nigeria’s maritime industry at the third edition of the Taiwo Afolabi annual Maritime Conference, as stakeholders canvass a new cost and charges regime for port services that reflects the current economic dynamics, especially fluctuations in the exchange rate window that suits not only in the interest of port service providers and users, but also final consumers of imported goods.
The stakeholders were also of the consensus that it was high time the Federal Government adopted an all -inclusive policy formulation processes with a view to getting inputs from port operators and stakeholders that would shape future maritime policies, arguing that the practice of alienating the stakeholders, who the policies are meant for in the formulation stages has over the years proven to be counter-productive.
Chairman of Port Consultative Council PCC, Otunba Kunle Folarin, who presented the lead paper, which was also the theme of the event entitled: “Port Costs and Ports Charges: A Recurring Decimal under Ports Reform Regime”, traced the history of port reform in Nigeria to 1993, when the Federal Ministry of Finance took steps to address the issue of rising cost in the delivery of port services with a view to harmonising the functions of all the agencies operating at the seaports.
He also listed the objectives of the port concession programme, that ushered in private terminal operators into the port system in 2006 to include transferring port operations/cargo handling from public to private sector to enhance efficiency, enhance and competitiveness,, relieve the government of the huge investments in port infrastructure and equipment and also attract private investments to develop and modernise the ports, among others.
While describing port costs as a collective responsibility of both the government and private sector, he said such costs represent monetary measure of what port users pay to the authority, terminal operators and other ancillary service providers for using facilities and services of a port.
According to him, the cost components cover the total charges paid per cargo unit, with Customs duty/taxes accounting for over 70 per cent while port terminal operators account for 13 per cent even as the Nigerian Ports Authority account for less than one per cent excluding Customs duty, cost of cargo handling, while storage and delivery account for about 65 per cent of the total port cost.
He also said that there was need for both commercial and technical regulations, which he described as the application of official controls or processes in terms of policies or set of rules, which are carried out in the implementation or enforcement standards set by by an authorised agency according to the provisions of the law.
“Technical regulations deal substantially on the procedures and processes of the harbor and ports environment operations while commercial regulation is with regards to shipping and related services, particularly in setting the modalities and guidelines of operations including charges, levies and applicable taxes. Other principal issues covered are freight rate administration, control and the fixing of fair benchmarks and their enforcement.
“On the other hand, the role of port economic regulator should include fair hearing, anti-monopoly and fair trade practices, rights and obligations of all practitioners and mediation, conciliation and arbitration”, Otunba Folarin, also said.
He listed strategies to reduce port cost, which include government policies, reduce customs duty and taxes, set up effective and efficient single window platform, regulate the port and shipping industry, especially service and cost, port infrastructure development and common user areas, port community system as a framework for stakeholder dialogue as well as encouraging Public-Private sector Partnerships in port business, investment in port Information Communication Technology ICT and hiring of quality human resources, among others.
On the way forward, he observed that the broad objectives of the port reform have been hampered by several fundamental issues from conception, implementation processes and operations of the concession regime. He therefore made a case for the political will to implement all agreed processes and terms, transparency by all stakeholders and enactment of laws that promote port productivity, fair trade, competition and elimination of monopoly.
Meanwhile the host of the event, Dr. Taiwo Afolabi, in his opening remarks, observed that the issue of cost and charges at the port has remained a major concern to service providers and users as well as government agencies operating at the ports.
The Executive Vice Chairman/CEO of the SIFAX Group, who was represented by his daughter, Miss Mariam Afolabi, wondered what should actually be the appropriate cost and charge regime that suits all the segments of the industry, especially given that the exchange rate 12 years ago when the port concession was done was between N125-N130 to the dollar as against the current N362 to the dollar.
While noting that some of the payments to the NPA, which represents the Federal Government in the concession agreement, are made in dollar, he made a strong case for stakeholders inclusion in policy formulation processes.