Nigerian ports system not friendly, says Amiwero
Lucky Amiwero is the President of National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), and the Managing Director, Eyis Resources Limited. He was a member of Presidential Committee on the Nigerian Customs Reforms in 2011. He had also served in about 167 other government and nine presidential committees, with about 40 years experience in the maritime sector. In this interview with SULAIMON SALAU, he examined the current challenges at Nigerian ports, regional threats and proffered away out of the crisis. Excerpts:
Some importers and shipping lines are leaving this country due to poor policies and infrastructure decay, what can we do to retain them in Nigeria?
It is a pity that Nigeria does not have infrastructure. Our business policies are also not friendly; in the shipping lines too are people who have been drawing this country back. If you look at many of them, they don’t have any equipment, what they have is just their container and office. They just bring in ships here because we pay our freights. When you look at the charges in shipping, most of them are not tied to services. The terminal operators for instance, have costs to run; they have labour. They have forklift, cranes, and overhead cranes and also pay their rents and a host of others, while shipping lines have nothing to pay and they are collecting more than the terminal operators. So they have been exploiting us. If you say the shipping lines are running away, I just look at them, because I know many of them are still here.
The issue of access roads is another painful aspect. We requested for access road construction in 2009, and former President Shehu Musa Yar’Adua approved it. Up till now, the access roads are still a problem. I am happy that the new Managing Director of the Nigerian Ports Authority (NPA) is making moves. We wrote to her to highlight those issues. We have been writing to all the former NPA bosses, they didn’t do anything. But I have seen her making some moves. The young lady has started well, I pray that she finishes well. She should not be political. That is the work of NPA under section 32. The ports access road is an infrastructure that you don’t play with. Our own access road in Lagos is blocked, and we have had managing directors of NPA that was there for eight years and more, and your law said you must make the access road navigable, not only on the sea but also on the road. Everywhere in the world, you don’t play with port access road, because that is where you have easy conveyance of goods. When you import goods to your port and you cannot move them out, then your port is not friendly.
Is there no provision for infrastructure development in the ports concession agreement?
The concession contract stipulates that there should be a holding bay, and they are collecting money on that every day, but where is the holding bay? In the contract, the trailers pay entrance fees every time they enter the ports by virtue of the money that the licensed customs agent is paying for the trailers to load. On our own, we have played our role.
What is the government doing to play their role?
They just collect the money and keep mum. These are the kind of things we see around the country and these are the kind of things that make people to move out of the country.
Our system is very expensive the way we run it. Look at Ghana for instance; I learnt that they have cancelled terminal handling charges. I have been clamouring for the past 15 years that terminal handling charges should be cancelled in Nigeria. We have two charges- terminal handling charge and delivery charge. What is a delivery charge and what is a terminal handling charge. They are the same thing. And terminal-handling charge is in billions and trillions of naira.
So our cost of doing business is a big problem and our procedures are lengthy and cumbersome because most of the things we do are imposition. Even the agency that is supposed to regulate what we are doing is imposing. You’ll impose value and impose decision. They are supposed to treat, classify, interpret and apply. Many things are not done properly and we cannot continue to run a country where you don’t do things based on law. Most of the revenue accrued to Federal Government is imposition.
For instance, the Central Bank of Nigeria said in a circular that the exchange rate to be used is the one that is approved on a ‘Form M’. What the
Nigerian Customs have done is to use the prevailing rate. When ‘Form M’ was issued at N197, you later come to the port they will give you N313 to a dollar. You can now see how they killed the economy. The economy is finished. They have scattered the economy. There is no confidence. It is not transparent. It is not predictable. It is not consistent. It is not in line with any of the tools that make trade facilitation, so confidence building is a problem. Until we try to approach our things on the basis of law and not imposition, then we can move forward.
But Nigerian Customs claimed that it is not true because they work based on tariff structure, which is open to everybody?
How can they claim? Go to the Customs systems and let them give you a history of their charges; you will see that over time tariffs are issued and are imposed. So these things are not in line with the Act 20 of 2003. When this issue started, we wrote to them. On the basis of that government stopped it but they have re-introduced it now. We cannot be looking for revenue at the detriment of fiscal policy that is supposed to generate employment and create wealth. We are not creating wealth, we are not generating employment, and we are just generating revenue. You will see the implication after three months. There is no way the economy will not nosedive. The economy is going down by the application of the exchange rate in the ports system. If we had followed it according to the Central Bank guideline and import guideline, we will not have problem, but when we want to make revenue at all cost, that is what you are seeing in the economy today.
Cargoes are over delayed at the ports due to manual and physical examination by the Customs while the scanners are rotting away. What is the problem with the existing scanners and how can we get out of this mess?
There is no need for buying new scanners. The scanners are a national project, not Customs project. The project was planned under two components – one is on ports reforms, the other is on destination inspection. We are the people who pushed for destination inspection. We fought for the cancellation of pre-shipment because we noticed that pre-shipment was not conducive enough for this nation. Whereas, we are spending so much money but we don’t have the tools. Scanners are not here; many things are not in the country. So we pushed that pre-shipment should be cancelled and it was cancelled.
Initially, government awarded contracts to Cotecna to take over the whole ports. They got the first contract, which we fought and it was cancelled because the contract actually was not in tandem with some of the laws. They pushed Customs out completely and we noticed that it was not the best for the country. The contract was then reviewed and the 10-year deal was reduced to seven years and the contract accommodated other new entrants like SGS, Globalscan, and Web Fontain. Web Fontain took over from UNCTAD to build the I.T. platforms, electricity and other communication gadgets. The scanners were given to Globalscan, SGS and Cotecna and it was for seven years.
So, the scanners we have on ground are national project scanners, they are not old scanners, they are still new. Some of them are just four or five years old. Nigeria does not need to buy any new scanner, because the scanners we have are Build-Operate-and-Transfer, and there is a transfer clause. If we had followed the clause, we will not have what we are having today. The scanners we have on ground are supposed to have been by the contract (because we have unexpired six-month contract that has three components – the parts, labour and maintenance). So, that unexpired six-month contract is supposed to have given us a new scanner because you will have parts on the ground, the labour and maintenance for six months. Unfortunately, that part was not accommodated by the people who took over by force, because it was not taken over professionally. The former Comptroller General took over without looking at all those things. There was no transition, what we had was implementation committee. The transition plan is supposed to bring in the new Customs and new system into the Service. There was a time frame for the transition to mature and hand over seamlessly without problems.
What we have now is scanners of five to six years- still scanners, other eight to nine years –mobile scanners. And these scanners are not old scanners so you don’t need to buy new scanners.
So why are they not operating?
They are not operating the scanners because we did not do the right thing. We have six months unexpired components and it was not adopted. There was no transition period, what we had was just implementation and Customs took over, and then it was a very big mess, because most of them were not prepared. So, what we have today is that those scanners should be revisited. In some other countries like Ghana scanners are still borrowed, they don’t have scanners and we are having new scanners abandoned. If they are planning to buy new scanners I think it is a wrong conception, they have to go back to those existing scanners and put them in order.
What they need to do is to re-engineer and put them into operation. They are not fairly used scanners that were bought as second hand, I was a member of the committee and I know what I am saying. We started this whole issue in 2001. I was a member of destination inspection committee in 1999, so what we are talking about is very important. There is need for them to look at the contract papers, the handover, the transition period and the transfer clause. It is very important and instructive that they must do the right thing.
But they must have tested the scanners and discovered something was wrong before they were abandoned?
When the service providers were there we did not have problems, we just had minor breakdown and we monitored them. Those components are working, even they were underutilised. When we went around the country, we noticed that some of the scanners were underutilised. Go to places like Warri and Seme, most of these areas don’t use scanners. We also have in Apapa, Tin Can, though we have problem with the one in Port Harcourt, because they have re-locatable scanners instead of fixed ones. We were supposed go to Port Harcourt then to look into the problem before the committee was rendered useless. The committee was just hanging on and we discovered that the government did not care anymore and everybody was just busy, and that is why we are just hanging on till today.
What benefits have we missed from scanners?
Internationally, you cannot beat scanners, even though we know that scanners have their own limitations. When you look at what we are practicing in the country today, scanners were introduced as security tools to guide the influx of arms and ammunition, but Nigerian scanners are for revenue generation. Because we always look at how we can raise revenue through the scanners, we can still develop and move higher and bring in that software to be incorporated into our scanning system so that we can now accommodate both the revenue aspect and the security aspect.
Our committee had requested many of the scanning companies to change our profile from revenue profile to both revenue and security and they actually installed the software. So, scanners make things faster. We are supposed to have upgraded what we have in this country and bring in software that would detect and identify those critical security areas like ammunitions, drugs among others. When you go to other countries today, they are using what we called GA marine scanners, which can detect that. We still believe that we can still upgrade what we have today to that level.
Smuggling has dominated the import market today, how can we get out of this mess?
The ports system necessitated the smuggling activities. The system is too expensive. It is not friendly. With frivolous imposition, many importers have moved to neighbouring countries. This is because of our policies. The automotive policy was falsely designed. I wrote to the Presidency, and they called my group and me. We went there and highlighted areas that are fundamentally wrong. You don’t look at policies for a few people. You look at it from regional outlook. What Ghana is doing in automotive policy is not what we are doing. Even South Africa is not doing that. We moved our tariff to about 70 per cent and we don’t have the plants on ground, we don’t have new vehicles on ground. We gave the concessions to some of the assembly plants that bring in units into this country, so you will find out that the balancing is not comfortable. In a country where you don’t have mass transit, you don’t have rail, you don’t utilise your coastal water, you don’t even have good roads, then you start to increase your transport cost to as much as 35 per cent/ 70 per cent.
So, where is your mass transit philosophy?
On other issues, Ghana has cancelled their terminal handling charges, but we are having the most expensive storage, so many people will go to other countries and find out that it is cheaper over there. You’ll decide to pay at the border because you are allowed. Not every cargo coming through the borders are smuggled, a lot of the cargoes are allowed to come in, apart from rice and other banned items. That is why you have scanners at the borders. You have it at Seme and other stations. These are the issues and they are issues that are critical. If you go to the port now, you will discover that the port is empty because of the way we apply our principles. We have a problem because we don’t follow the law. If the central bank issues a policy why don’t the Customs follow it? When you look at why this economy is going through recession you will see that people who are not qualified are in various areas and when you are not qualified, you will start to guess and impose things. We have a problem on our hand and that problem must be addressed, if government does not bring in the experts, the industry will continue to nosedive.
Government introduced the auto policy to encourage local manufacturing and assemblage of vehicles. Do you think it is working?
You have gone throughout the country; do we have any mass transit? Do we have any railway?
We don’t have a single one. The BRT that we are shouting cannot even accommodate 10 per cent of Lagos populace. This is not called mass transit. Mass transit is to carry as much people as possible. We don’t have it in the whole country. Or is it this railway that is going to Kwara that you are talking about? Go to other countries and see what is happening; South Africa and Ghana have their auto policy.
Where are the new vehicles in the country? How long have we introduced the auto policy? Since 2013, Where are the fruits of the auto policy?
Many people have made their money and walked away because there were so many incentives for auto manufacturers. They were allowed to bring in fully built vehicles. So, our incentives are not in line. That is not what other people did. The incentive package is tailored towards favouring some set of people. I have not seen any of the vehicles on the roads; all our busses are those of 15 to 20 years ago. Four years down the line, we have not seen anything. We are looking at reviewing the whole package. Nigeria continues to go down because we are politicking, we are insensitive and we don’t do things for our generation yet unborn. We are only do things for selfish interest. We should begin to do things in a pragmatic manner so that we can come up with something that is very useful for the generation of this country.