The ports offer immense opportunities for economic diversification, says Abdullahi
Alhaji Habib Abdullahi is the Managing Director and Chief Executive Officer of Nigerian Ports Authority (NPA). Recently, he held a press briefing on activities of NPA and how the authority has been aligning its operational profile with the current administration’s economic diversification policy, under the change mantra. Essentially, he stressed the need for the broadening of maritime activities to ensure greater contribution of the sector to the nation’s economy. Business Editor, ADE OGIDAN was there. Excerpts.
How is the current policy direction of the government affecting the operations of NPA?
We are very much aware that there are some challenges in foreign exchange policy regime, which is related to the revenue inflow of the nation. We are highly dependent on oil revenue and the price of oil has come down. We are very much also reliant on the world economy because port business is dependent on world trade. So, in that way, it has impacted on our activities and revenue generation profile.
To what extent is the impact?
The year has just started and there is the fact that the budget has not been approved. There has been relatively low level of activities at the ports. In fact, we have recorded 10 per cent drop in the number of ocean going vehicles that used the ports so far this year, against the volume recorded during the same period last year. But we are optimistic that volume of business will pick up, especially when the budget is eventually signed by the President and the policy regime takes off fully.
What is your organisation doing to align itself with the mission and vision of the present administration?
Specifically speaking, the most important thing is to make sure that all revenue leakages are blocked. We know that the economy is facing some challenges and there is less money now. So, my priority the way we see it is to raise revenue for government and for the nation, to assist in expanding the economy, so that we don’t become oil dependent . We need to encourage exports, so that the economy does not rely on oil export but diversified into otherareas like agriculture and solid minerals, to mention but a few. Also we have commited ourselves to encouraging Foreign Direct Investments (FDIs) and that is why you see new port projects coming up. In short, we are focusing primarily on raising the revenue generating profile, expanding and diversifying the economic base.
How are you strategising to achieve more business activities at the ports?
We have to go with the current government’s thinking and that is diversification of the economy so that we are less dependent on oil. That is what the government’s policy direction is. What we are trying to do now is to make sure that we encourage export business and we have already written a letter to the Federal Ministry of Agriculture and Nigerian Export Promotion Council (NEPC)…..We need to make more people to be productively engaged in export of goods to broaden the nation’s economic base. That will promote the government’s economic diversification programme. Such diversification efforts will ensure that idle empty containers at the ports are more utilized and volume of our business will substantially go up. Besides, there are plans to improve on the facilities at the ports to further promote patronage. So, when export business goes up, it will automatically enhance business activities at the ports.
How are you preparing the various terminals to accommodate the volume of export business that will come with the current policy regime?
We have to work hand-in-hand with the concessionaires. The terminal operators are the ones that are running the ports, so we help to reorient them. At the same time, we are also synergising with the Customs. We are trying to see if we can make some terminals to be dedicated for exports. I was with the Comptroller- General of Customs in Ikorodu last week and the number of empty containers are much, spreading over the massive place. So, we are trying to see how we can make Ikorodu facility to be an export terminal. We have some other interested parties that are coming in and trying to help with some dedicated ports. We have the Ilaje port in Ondo, the former Olokola port that was being promoted before by Ondo and Ogun States before Ondo decided to go on its own and they are trying to make that port to be dedicated to solid minerals for example. So, quite a number of people are coming in and have shown interest. So, we have plans for dedicated ports for exports.
But are you planning to revive some ports that are currently dormant, to diversify more traffic away from Lagos terminals, which importers appear to have preference for?
Interestingly, quite a lot of people don’t understand our operation and role in the maritime sector. You see, I can’t tell you that when you are bringing in goods, you must use this or that port, it is not for me to do that. It is dependent on the importer or the exporter. More especially now that the ports are being concessioned, we are just landlords. All we need to do is to make sure that we give the necessary infrastructure and I think we are doing that in all the ports. It is left to government now to encourage and also left to the concessionaires, the terminal operators to encourage people to come and use them. It is interesting that people still decide to use Lagos even though Lagos is choked up, instead of people to use, say Calabar. Of course, there are some attendant problems, but the Onne Port for example, is a very deep seaport which is even the deeper than Lagos. Yet, people still don’t use it and you have West Africa container terminals there but people still don’t use them as much as they use Lagos, even though quite a number of cargoes that are coming to Lagos are for some destinations that are closer to some other ports.
How are you planning to address the challenge of access roads to Lagos ports?
It is not our responsibility. I wish it were. If it were, I assure you that we would have done something because the current situation is very disturbing. The way that it is disturbing you, it is disturbing us much more. It is a challenge to us because anything that happens, it is NPA, it is the ports, but access road is the responsibility of the Federal Ministry of Works, the Lagos State government as well. But we do assist and we have spent quite a lot of money on improving the state of the access roads. Last year, for example, we spent about N500 million as Corporate Social Responsibility (CSR). We treated it as an emergency then to improve access to the ports. Our mandate really is within the ports and you can see that we are developing infrastructure within the terminals. The 1.6 kilometer road that was done in Apapa was a big dual carriage way and that is what we did. We are also trying to do similar works in Tin Can Island. The Federal Government is now trying to do something about it. There is already a committee and we are of course a member, which is trying to see that the access road are improved upon.
Can you speak on the issue of rail transportation although it may not be your responsibility?
It is, incidentally. Intermodal kind of transportation is one of the key issues when I told you of the challenges that we are facing. Because if the railways are working as it used to be, all these congestions would have eased up. Our responsibility within the port is to develop the rail system which we did. If you remember about two years ago, the rail within the port was commissioned. Also in Port Harcourt, we are also developing that infrastructure within the port there and the work has gone as far as 93 per cent completed. As I said, we just limit ourselves to the rail network within the ports. It’s up to the Nigeria Railway Corporation (NRC) to do the rest. When I was in secondary school, everyday there were two trains going to Lagos from Kano, but somebody is now saying we have achieved something because we have one train per week. When the coordinating minister about two years ago said we have achieved something that we have one train every week, I kept quiet because it was ridiculous. There used to be tank farms in Kano and they still exist there. They used train to transport fuel to the tank farms in Kano but now, there is nothing like that. But I think the present administration is thinking in that direction That is why this government is giving priority to railway as you can see in the budget.
Some Nigerians bring in their vehicles through Benin Republic and it all boils down to cost of clearing shipments in our ports. Can we introduce the technology that will help reduce the cost of doing business so that Nigeria can secure more patronage for the ports?
People don’t import their vehicles through Benin Republic. They smuggle them and it is ridiculous. People are complaining that the ports are congested, which means there is a lot of business and at the same time, there are other factors that mitigate against bringing in goods. One, the economy itself encourages smuggling because of some of the economic policies. People say the port is expensive, but if you compare it with others in the world, look at it and see that ours is one of the cheapest. People don’t even know. People import vehicles from there because of the fact that they don’t pay what they are supposed to pay. They smuggle it in. That is why it looks cheaper. So, the issue is not necessarily what a lot of people think. Our ports are relatively competitive
Some of your traditional mandates have been taken over by concessionaires. To what extent has this affected your revenue generation profile?
It has affected it positively. Hitherto, we were the operators, taking care of the infrastructure. To be honest, you know how government officials work. It’s not so much on competitive basis and we spend so much money. That is the essence of the port reforms, so that these responsibilities will all go to the concessionaires. So, by doing that, government became more efficient. The port operation has become more efficient and we were assigned to take our own kind of responsibility. So, the volume has increased. People have to go out and look for market which increases the volume of business. If you compare with what we were earning before 2006/2005 and what we earned 2015, the difference is over 1,000 per cent. Even now, at this critical time, what we are collecting is much higher than what we used to collect. So, it has positive impact.
What is your administration doing to open up other sources of revenue inflow beside collecting rents from terminal operators?
Who told you that all the NPA does is collect rates? Even to collect those rents you are talking about is very difficult, which is why we are owed a lot of money. Don’t forget that we have some other responsibilities that generate revenue for the authority. Rent collection is not our only source of revenue. We collect dues on cargo, shipments, pilotage, among others.
However, we are still working to open up other sources. There are so many challenges we face. We went from doing the business itself to being mere landlords, prompting the need to re-orient our staff to key into a different work ethic.
How is NPA being positioned to ensure efficiency in other to reduce operating costs and reliance on government’s financial interventions?
Let me first make it clear firstly that we don’t collect subventions from government because we are a self-sustaining agency. We are even expected to give some money to government. If you ask the finance minister, she will tell you NPA is one of the agencies living up to expectations regarding revenue generation. For the first time, at the beginning of my administration in 2012, we remitted N15 billion, the highest ever. The highest before then was N2 billion. From that time till now, we have remitted roughly above N60 billion. We are relatively doing much better than other self- sustaining parastatals.
Another point that I find exciting to speak on is the fact that 75 per cent of customs collection is from the maritime sector. When you talk about the maritime sector, people close their eyes and think that it’s only Nigerian Ports Authority. If some people were to sit down and aggregate the revenue related to the maritime sector, they will find it’s a huge amount of money. People are prone to focus on the smaller aspects of the sector.
I, however, agree we should do more, in terms of revenue generation, but the maritime sector doesn’t function on its own. It is dependent on the economic policy of the nation, which includes trade policies and other public policies. There must be an enabling environment for the sector to develop.
What is going on now with the Lekki port?
Things are going on well with Lekki port project. Lagos State government, just like us, is very much interested in it. We are all fulfilling our respective obligations to ensure the successful take-off of the project. We are now thinking of the ground breaking ceremony and may call on Mr President to commission it.
Will you say you have done your best and have positioned the NPA to face challenges that are coming?
No. I have not, but I am trying to. There are quite a number of challenges. To be honest, to operate in this environment is very difficult. I was posted our of the country to be our overseas representative for five to six years before I was called to be an acting executive director. So, having stayed there for some time and seeing the way things were done there, one could not but find a lot of operational challenges here. But thank God, with this government, I have a feeling that those that are assigned responsibilities are being given a free hand to do what they can. So, I can tell you that I feel more confident now than I was before and I will do all I can to ensure that we achieve the desired objective and the mandate that have been given to us.
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