Resuscitating the blue economy through PPP model
With Nigeria’s economy currently dependent oil resources, recent researches have proven that the nation could be better developed through the economic potential inherent in the maritime sector.
Also known as the blue economy, the sector is capable of turning around the fortunes of the country, and contributes significantly to the growth of its Gross Domestic Product (GDP).
Nigeria is blessed with a vast and extensive natural maritime endowment base comprising a coastline of over 800km, an exclusive economic zone of over 200 nautical miles; an equally vast inland waterways resource estimated at nearly 3,000kms, and comprising over 50 rivers, big and small, that can support a vibrant intra-regional trade.
It has a unique location on the coastline corridors of the Gulf of Guinea and the Bight of Benin, and eight of her 36 states having littoral status, coupled with a vast and growing population and market that can generate huge indigenous tonnage and capacity. These make experts to believe that Nigeria can lead the world, if the government do the needful to harness the opportunities.
These opportunities were brought to the fore at the recent Taiwo Afolabi Annual Maritime conference held at the University of Lagos, which blew a fresh breeze of hope into the troubled sector by presenting the Public-Private Partnership (PPP) as an option to eliminate the huge seaports infrastructure deficit.
Afolabi, who is the Chief Executive Officer, Sifax Group, which has many subsidiaries in Nigeria, with many branches around the world, argued that the maritime sector plays a key role to in the alleviation of poverty and hunger, as it provides important sources of income, and employment for many developing countries.
Maintaining that the maritime industry is strategic to the economic growth and development of a nation, he however noted that: “In Nigeria, the contribution of the sector to the country’s GDP is still very low when juxtaposed with its huge potential and opportunities.
“One of the major factors that have impeded the sector from fulfilling its potential is the huge infrastructural deficit. Others are deplorable access roads, faulty cargo scanners, non-existent rail system, non-functional truck bay, among others, have conspired to negatively impact the service delivery efficiency and overall impact.
Afolabi, who described the Executive Order signed by the Acting President, Prof. Yemi Osinbajo, as a good initiative, said infrastructural deficit would negate government’s good intentions if this problem is not strategically and urgently addressed.
The keynote speaker and Executive Director, Sifax Haulage and Logistics, Henry Ajetunmobi, said efforts to develop the port industry would achieve greater success if strategic alliances and partnership were grown not just between private and public entities alone, but among business enterprises or groups in order to pool scarce resources.
This, he said, is because investment in modern port infrastructure requires lots of money, ‘not mere pennies’, adding, “Promotion of strategic alliances and partnership among principal stakeholders will improve the port industry, making it a more dominant contributor to the growth of the national economy.”
He said increased cargo availability, especially export cargo, would keep ports and terminals significantly busy, as “ships will always go after the cargo wherever it is concentrated.”
Ajetunmobi stressed: “We affirm that it is on the sustained development of critical port infrastructure through PPP that the full potential of this maritime country will be unlocked. Today, 11 years into the port concession regime, our ports are increasing in productivity and efficiency, but these have come at great costs.
“The industry is encumbered by circumstances that the stakeholders especially government, are striving to repair. We must be honest enough to admit to ourselves that in our quest for efficiency, there’s no ‘silver bullet’ or one-size-fits-all solutions.”
The Managing Director, Nigerian Ports Authority, (NPA), Hadiza Bala Usman, noted that critical infrastructure for the ports are not just the facilities for berthing ships, and cargo handling in terminals, but essentially the provision of hinterland infrastructure to facilitate the receipt and evacuation of cargoes that pass through the ports.
This also includes intermodal connectivity to the seaports. “With the current government’s drive to boost agriculture and non-oil exports, the provision of consolidation and processing facilities for a wide range of exports is also critical,”
Noting that government cannot easily carry the burden due to scarce funds, Usman, who was represented by the Assistant General Manager, Business Development, Stanley Yitnoe, said: “It is now more than ever that the greater involvement of the private sector in the operations and financing ports facilities, especially through Foreign Direct Investment (FDI) is critical. There is no better time than now to deploy private capital for development of ports infrastructure and apply private initiative and efficiency.”
The Director General, Nigerian Maritime Administration and Safety Agency, (NIMASA), Dakuku Peterside, who was represented by Tony Ogadi, said: “We at NIMASA have found out that PPP is the way to go. We found out that we could not maintain patrol boats to man our maritime domain, bureaucracy made it difficult for us to provide these basic facilities and we thought of engaging the private sector and we have done so well on that.”
The Executive Vice Chairman ENL Consortium Limited, and Chairman Seaport Terminal Operators in Nigeria (STOAN), Princess Vicky Hasstrup, said it was unfortunate that the nation has concentrated on petroleum over the years. According to her, the maritime sector has the potential and capacity to generate revenue that can sustain the economy as long as the right policies are made, and infrastructure are fixed to aid the critical sector.
Citing the huge earnings by the Nigerian Customs Service alone, Hasstrup said: “It pains my heart when I see that enough attention is not given to this critical sector with such huge opportunity not just to earn handsome revenue for government, but also to generate employment for the teeming youth.”
She said the terminal operators have done their part by investing massively in the sector, while urging the government to play its own by fixing the Apapa port access roads.
The Executive Secretary, Nigerian Shippers Council (NSC), Hassan Bello, also agreed that: “PPPs are needed to finance and deliver major infrastructure projects.”
He noted that infrastructure such as inadequate power supply, compounds the challenges that have placed Nigerian ports at a disadvantaged position to compete favourably with other neighbouring ports in terms of cost.
The Director, Strategy and Operations, Delloitte West Africa, Bola Asiru, argued that the infrastructure put in place decades ago were no more relevant, decayed and needed upgrade.
Noting that the ports concession has yielded positive results, he said infrastructure deficit, and policy inconsistency and others are however scaring investors away from Nigerian ports.
“Government should make policies that will be investors friendly. There should be a mechanism where we can give investors some comfort and guarantee returns on investment. There have been several debates and documents on the maritime sector, it is high time we moved to the implementation/execution stage,” he said.
President, Ship Owners Forum, Mrs Margaret Orakwusi, challenged the youth to come up with innovation that would bring the best out of the opportunities that abound in the shipping sector.
She commended Taiwo Afolabi for bringing the young minds into the realities of the nation’s maritime business.