By Uche Usim
HAS Nigeria fared well in the last 10 years when its seaports were concessioned to private terminal operators? That is the golden question on the lips of stakeholders after the expiration of the tenure of the first batch of concessionaires in May, 2016.
But a seasoned Maritime Lawyer and former President of the Nigerian Bar Association, Olisa Agbakoba, the Nigerian maritime sector can generate N7 trillion annually if all players are committed to ensuring its growth.
However, from 2006, when the Bureau for Public Enterprises (BPE) midwifed the port concession deal between the Nigerian Ports Authority (NPA) and various private sector players who took over terminal operations of NPA, it became clear that the government parastatal could no longer handle such duties efficiently. That was because port congestion became the rule, rather than the exception and ships stayed over a month at berth before they could discharge their cargoes. Demurrage piled up, and government revenue dipped, as Nigerian ports were dreaded internationally.
Notwithstanding the above challeng
es, economic experts and maritime watchers who witnessed the 2006 concession described it as a sham, insisting the entire package was skewed in favour of the terminal operators and to the detriment of Nigerians. They added that there was a deliberate plan to avoid having a substantive port regulator in place who would have created a level playing field and ensured concessionaires played by the rules of engagement.
They further alleged the absence of an umpire gave the terminal operators and shipping companies free hand to prey on importers and agents with high and duplicated charges.
Such stakeholders also advocated an urgent audit of the operations of the concessionaires to verify their claims of investing millions of US dollars to modernise the ports amidst a flurry of petitions pointing to the contrary.
In late 2014, the then President Goodluck Jonathan pronounced the Nigerian Shippers’ Council (NSC) the Port Economic Regulator, a move that was initially opposed by the terminal operators as they headed for the courts to challenge the government.
The Spokesman of Seaport Terminal Operators of Nigeria (STOAN), Bolaji Akinola in a recent statement said: “Since 2006 to date when the ports were concessioned, private terminal operators have invested over N1 billion in modernising and upgrading the ports, training of port workers and reducing vessel waiting times by more than 30 days.
“Before port concession, vessels queued up for more than 30 days before being able to berth at the ports, but immediately we came on board, we eliminated these vessel queues thereby saving importers over N35billion paid annually as congestion surcharges. That is a huge savings to the Nigerian economy”, he stated.
Indeed, industry records show that cargo throughput has improved tremendously since the ports were concessioned in 2006. The channels have also been dredged by the NPA to give room for large vessels to berth at the nation’s terminals.
Some stakeholders also say dwell time at the ports have reduced compared to what obtained during the pre-concession era.
But, the Transportation Minister, Rotimi Amaechi, and several other stakeholders appeared not too comfortable with the progress so far recorded.
At a recent oversight tour of port facilities, the Minister assured that a comprehensive audit of the concessionaires operations would soon be carried out to know whether to review their agreement with NPA, especially those whose tenure expires this year, or wait a little longer before doing so.
Amaechi at a recent stakeholders meeting in Lagos did not veil his dissatisfaction with the state of the nation’s seaports.
“Let me ask you all: Are you people happy with how things are at the ports today? If you people are, I am not. I’m not impressed. Again, have we really fared better in terms of modernization and infrastructure since the ports were concessioned in 2006? Have you not been to ports in countries like Dubai or Egypt? Is this how they are? Yes, some are saying we’ve done better comparatively but we certainly have a very long way to go. We hear of billions of naira investments and yet the ports are almost the way they were in 2006. So, we have to audit the operators to know where things are for real. It’s not by the figures being bandied around. We need to be sure people are operating according to the law and the agreement. If we don’t like the agreement, we’ll have to sit down and review it. The maritime sector has some untapped potentials. We can realise far more revenue than we are getting today if we become more serious and set targets for ourselves”, the Minister explained.
At the meeting, he called on all stakeholders in the industry to
come up with suggestions that will move the sector forward in terms of efficiency and revenue generation.
He said the Buhari administration was in for a total reform of the economy, adding he had promised the President that the maritime sector would contribute substantially to the nation’s GDP.
Also commenting on the planned audit, the Executive Secretary/ Chief Executive of the NSC, the Port Economic Regulator (PER), Hassan Bello, said: “the planned review is aimed carrying out a clinical analysis on the concession, improving on the milestones achieved and correcting its flawed aspects, especially in the area of charges, clearing processes, among other issues. To achieve that, we are involving all relevant stakeholders in the maritime sector because their inputs are necessary for this review”, he stated.
Meanwhile, a maritime expert and member of the Presidential Committee on Port Reforms, Lucky Amiwero, has also called for the audit of the operators and a review of their agreement with the NPA.
“That 2006 concession exercise was done wrongly. It was not backed up by any law. What they did was mere lease agreement, which was mainly for land. A true port concession should adopt the landord’s model, which has various components like marine, port operation and regulation. Going forward, there are issues to address like traffic, tariff, infrastructure, labour among others. They are fed into the concession. But all these were lacking in the 2006 concession agreement. There was no regulator and, therefore, no law. This created private sector monopoly. Compare our charges to others in the sub-region. We’re the highest and yet with processes and procedures that are not competitive. So, to me, there is little success so far. So, if some concessionaires’ tenures have expired, let
them hand over to NPA. They are not to be there forever. There is a transfer process in concession or PPP. Their own is Build, Operate, Own and Transfer (BOOT). We need to re-assess the agreement. Experts should come in and assess to know how things truly are”, he stated.
On the flipside, charges are still very high, a development that has continued to make neighbouring West African ports more attractive to shippers.
Importers and agents insist that Benin Republic, Ghana and Togo would continue to siphon cargoes meant for Nigeria because of lower operational cost, faster clearing process and other incentives.
According to a recent World Bank study that compared charges in Nigerian ports and other sea terminals in West Africa, the results showed that Nigerian ports are the costliest to operate in within the sub-region. For instance, the terminal delivery/ labour charges in Nigeria stands at N62,682, while it is N9,655 in Ghana and N24,000 in Benin Republic. In Senegal, the charge is dependent on weight and volume of cargo.
For cargo dwell time, Nigeria still records the highest in Sub-Saharan African with 20-28 days. Togo is 18 days, Benin Republic-10-15 days, Ghana (Tema Port) 15-21 days, Kenya (Mombasa port) nine days, South Africa (Durban) four days and Zambia seven days.
Stakeholders say the government must address the aforementioned issues if the sector is to operate optimally.