The board and the management of the Nigerian Ports Authority (NPA) are eyeing a hub status for the Nigerian port to become the leader in Africa. The initiative has also provoked the necessary support from stakeholders, YUSUF BABALOLA writes.
Since President Muhammadu Buhari appointed Ms. Hadiza Bala Usman as the managing director of the Nigerian Ports Authority (NPA), she has not left anyone in doubt about her plans to boost Nigerian Ports efficiency.
At a meeting with stakeholders, Ms. Usman reiterated the agency’s commitment to making the seaports competitive by promoting efficiency and transparency.
Her team, she said, was not happy that the seaports might lose its comparative advantage in terms of cost and others to neighbouring countries’ ports, especially in quick cargo clearance. Hence, the reason the authority considered it imperative to ensure that terminal operators and government agencies at the ports key into the efficient port services system of the Federal Government.
The managing director’s message and body language on the matter were clear: “The management has discovered that inefficiency in the procedures and operations of agencies and service providers and even users was undermining Nigeria’s competitive advantage in international trade and we are set to correct that to make the ports attractive for business, and generate more revenue to the government.
Though the objective to bring efficiency to the ports seems tall and unrealistic because of the situation in the port before her appointment, sources at the Federal Ministry of Transportation said the Federal Government impressed it on the management of NPA to elevate the seaports to a hub status through zero tolerance for corruption, inefficiency, among others.
Ms Usman said NPA would review the concession agreement the agency signed in 2006 with the private terminal operators to correct all the grey areas in the deal, make the port a hub in the West and Central African sub-region.
Many importers, clearing agents, operators and port users have lauded the plan, noting that it would revolutionise cargo clearance procedures.
One of the stakeholders, Mr .Segun Ogunsanu, said the initiative would reduce the time and cost of doing business at the ports. “It would also reduce tension, stress and worries and, if supported by the Federal Government and other agencies at ports, would reduce the volume of trucks on the roads and the number of overtime cargoes in the port,” he added.
An importer, Mr. Patrick Ebenezer, described the move as “a robust maverick touch by the Managing Director of NPA Ms Usman”.
Ebenezer, who condemned the high level of delay in port operation, commended NPA and its management for bringing the issue of single window platform, transparency and efficiency and zero tolerance for corruption at the ports to the front burner as part of their efforts to make Nigerian ports leader in Africa.
“Whether or not the model operated in any port is a tool port or a landlord model like that of NPA, the overall objective of any port is to be efficient and to render quality service to port users,’’ Ebenezer said.
Why Ports Were Concessioned
The Federal Government took the decision to concession the ports to address the problems of inefficiency, corruption, mismanagement, and huge debts.
What has changed?
Stakeholders believes that a lot had changed at the ports since they were concessioned.
Also, a senior official of the Federal Ministry of Finance who declined to have his name in print, said the NPA management had been running the ports efficiently. He said, for instance, that the Authority generated $140 million in 2005 before the concession and over $450 million from the Lagos Ports last year.
The government, he said, concessioned the ports to generate more revenue and allow for greater flexibility, efficiency and better services to importers and other port users by resolving some of the major challenges hindering smooth port operations.
He said, “As a direct impact of these investments, the ports have witnessed increased ship traffic and throughput, which has led to a 400 per cent rise in container throughput from 400,000 TEUs in 2006 to 1.6 million TEUs in 2014. “The investments have also led to the eradication of ship waiting time at the container terminals, as ships now berth on arrival.
‘’The official also said that vessel turnaround time has been reduced from five days to 41 hours while average dwell time for cargo clearance went from over 30 days to just 14 days. “In addition, due to improved security and lighting of the terminals, the ports now run 24-hours (daily) and seven days-a-week operations.
“There have also been some major investments made by the NPA on behalf of the government to increase traffic at the ports. Most laudable is the dredging of the channel from nine million to 13.5 million water depth.’’
The official further said the NPA invested in the provision of larger tug boats to service shipping companies. This led to larger ships calling, particularly at the Lagos port and Tin Can port, thereby increasing the throughput.
“The NPA has been a positive partner in the concession process but there still exists opportunities to further optimise the existing Lagos port infrastructure to meet medium term needs of the sector,” the official said.
Need To Review Concession Agreement
However, to enhance the ease of doing business in ports in line with international best practices, NPA is pushing for a review of the 10-year-old port concession.
Many stakeholders have also called for a review of the concession to accommodate aspects, which are not working with the objectives. According to them, a review would remove conflicts and allow both the NPA and the operators to fulfill the agreement.
To keep to its promise of boosting efficiency and reduce corruption, the management of the NPA is to acquire new tug boats with state-of-the-art, computerised engines, to meet the increasing demands of critical stakeholders, in the port industry.
Functions Of A Port
The most common mode of transport in international trade is sea transport. This is based on the huge number of cargoes that are transported on sea. Findings reveal that there are more than 2,000 seaports around the world, from the ones with a single berth location handling a few hundred tonnes of cargo yearly to huge facilities handling about 300 million tonnes of cargo yearly.
When a port becomes more competitive, its ability to attract cargo will improve. This will increase the revenue and better utilisation of the port’s facility and infrastructure.
Board and Management On Making Nigerian Ports Hub
This is the first time the board and management of the Authority would come out in one voice to say that seaport infrastructure must be developed to meet international standard to boost efficiency at the port.
Efficiency, the authority said, is a critical factor for handling of goods in the international supply chains, and is viewed to impact transportation and logistics, which play an important role in trade exchange with other countries.
NPA Board Chairman, Mr Emmanuel Olajide Adesoye, said they had evaluated the operational efficiency of the seaports to reflect their status and reveal their position in the competitive environment.
According to him, knowing the impacts of efficiency of seaports on the supply chain is vital for business survival.
He said: “Seaports have been considered to be important elements in international supply chains. They hold a very important role and are the most critical nodes in the supply chain. It is widely believed that seaports form a vital link in the overall trading chain. Seaports are a component of freight distribution as they offer a maritime to land interface for cross-border businesses.Therefore, efficiency of seaport operation is vital for supply chains in our country and beyond.”
Adesoye emphasised the need to improve seaport operational efficiency, and indicated which areas should be given more attention
Three different areas, he said, had been identified as a new framework of measuring performance of seaports. They are trade channel, logistics channel and supply chain channel.
Making The Ports Efficient
One way the management of the NPA is making the ports efficient and easing the processes of importation and exportation for business environment is the strategic adoption and institution of electronic transactions.
The authority has introduced an online payment platform called the Electronic Ship Entry Notice better known as “e-SEN” for shipping lines and agents to ease business transactions and help reduce ship dwell time.
Usman said the online payment platform has cut off unnecessary delay associated with ship arrivals and their dwell time at the ports, as well as ensure a quicker cargo clearance system.
Shipping companies in Nigeria have also described the e-SEN as a major step by the management of the NPA in checking corrupt tendencies at the seaports.
The electronic devise replaces the obsolete manual system which is said to be corruption-laden.
NPA Synergy With Other Agencies
To ensure improvement in operational efficiency in the ports, NPA is now effectively interfacing with other agencies. It has introduced a National Single Window Project to domicile all operations, including those of the Nigeria Customs Service and other agencies, into a single platform to boost efficiency.
Tariffs Put On Website
Under Usman, NPA publishes tariffs on its website for easy access by the operators, importers and the public.
Benefits Of An Efficient Port
One benefit of the government is increased revenue. When the port is more efficient, it will attract more cargo. The increased revenue realised from the duties and fees payable on the cargoes and ships will be a plus for the government.
Since the port is not an isolated industry but a community of actors, a better positioned port will create other service firms within the industry; this will attract increased private sector participation.
The people will be able to see a better price on goods since the present price of most import or import related goods are influenced by the cost incurred during the inward movement of cargo.
The cost of doing business will be reduced since the costing method would change allowing for a more customer and service costing policy. Costs will also reduce for the freight forwarders and inland transport operators like trucking companies and they will be able to give a better price to customers.
Delays experienced by cargo owners and other port users will be greatly minimised. This will increase the time it takes for them to get their goods to the market place.
The quality of service perception will change and the port users will enjoy a moreuser friendly port and the advantages associated with it like ease in conducting business with the port. Predictability of port processes will allow port users to be able to optimise their processes like transportation.
Cost will also reduce for importers who have to go through neighbouring countries’ ports due to the inefficiency experienced at ports in the country.