How To Make Nigeria A Ship Building Nation

Chief Eugene Nweke is the National Association of Government Approved Freight Forwarders (NAGAFF). In this chat with The Verdict he was eloquent as ever on economic matters. Excerpts:

What is the impact of government policies on the maritime sector last year?

I have talked about it , I said that while we appreciated the transformation policy of President Goodluck Ebele Jonathan in the sector, we have also seen other policies that are not people oriented, such policies that have to do with rice importation, the auto policy, etc.

Distribution of fertilizer is not the beginning and the end of an effective policy for rice production. One of the technical components that is needed to be considered has to do with first and foremost have we succeeded in getting or putting in place a national commodity board that will have dual purpose, one, to ensure that all over the nation, there is what we call a storage facility, where some of these farmers if they do not have enough space to house or store their rice and treat it they can approach the government and pay at a subsidized rate. Have we got that?

I think that was in place in 2001, we did something like that in Osun State.

I said is it evenly spread across the zones?

I don’t think so

Ah haa! Rice farming should not be centered on one particular zone, we have rice farmers in south Eastern zone therefore we should have a national storage facility over there. Then, another aspect has to do with this national commodity board, do they have all it takes to actually regulate pricing, so that these farmers can sell at  competitive prices against the imported price or are we saying that it should be open for them to compete? They can’t compete evenly, because if you consider the level of processes or the level of input in local rice production against poor mechanized facility for such farming and you compare it with the imported ones you will see the difference.

Again, mind you, in whatever thing you do one of the salient factors has to do with availability of energy, even to the extent of these storage facilities. The storage facilities also require energy.  But are they on ground, talk about ricemills of those days where are they? So these are things that we think primarily should have come then if you have put these in place as you are distributing fertilizers and giving out soft loans, then we will know that  we are getting somewhere. Do you understand what I’m saying now? So let it be that we are able to plan for local consumption, we have the capacity to feed ourselves, then I think I can now say that policy was the best if not you don’t subject your people to undue hardship by imposing something whereby you don’t have enough commodity to feed the larger number, and that again will encourage what we call smuggling. Again, look at the Auto policy, the Auto policy as far as we are concerned seems to serve the interest of certain individuals, because a policy that is meant for you to make your own economy open to all manner of vehicle producing automobile companies only because you want them to add to your revenue and then you bring in virtually 2,500 components of vehicles in its assembled form and they come here and couple it, that is transfer work, it is called transfer of employment. Now the more you allow more people to come, you are only nursing and boosting their own economy because they will produce more and export into our country and they will come here to assemble and add credit to our environment.

In any case, if you want to become a country noted for automobile activities then you should create what is called an Auto Village where any person wanting to do CKV business goes to that place for such activities. They must choose a site and let us know that this particular place is National Auto Village where every Auto industry goes so that if anything is going there it is strictly CKV arrangement under the very new system where it is found.

Moreover, if you look at this Auto policy critically you will possibly see that we are in a system whereby statistics does not mean anything in our country, you may ask me how? Before now recall that vehicle importers and spare parts importers have been importing into this country and they have been paying 2% for the purpose of developing the auto industry and for over 30-35 years we are unable to manage Volkswagen Nigeria, PAN in Kaduna, Steyr in Bauchi, Leyland in Ibadan, ANAMMCO in Enugu and so on and so forth. These are the first auto plants of the first Republic and where are they today? Nobody is talking about that, so government, from the point of view of advocacy, we need  accountability of all the monies that have been paid through import duty, we have asked questions they say they used the money for research and development in two universities. That to me, is neither here nor there, accountability is what we need that is the gospel truth. Again, we also think that if auto policy is anything to go by in line with the transformation policy plan of Mr. President, what we would have expected that should be integrated into the system should be first and foremost , the service sector. The service sector includes the wiring sub-sector, the rubber for tire and bumper, glass sector, then the wire for cables and what have you, because these are some of the components of vehicles. We had achieved nearly that before because  we had Glass Plc in Nigeria, producing windscreen and other rear lights and head lamps, then we had the rubber industry, plastic industry, producing things like the bumper and other things, they were  thriving. We had the rubber that developed Michelin tyres, Dunlop tyres before now. Now, they have gone to Ghana unannounced, they left Nigeria. Now, how well have we developed this  sector? Emphasis should have been on developing this sector before contemplating this type of policy.

Don’t you think that with time the government could fix all these things?

If time is anything to go by, then the Nigerian government should have built a stake with INNOSON before this auto policy. INNOSON has been there. In any case, have you asked yourself, what is its production capacity? The population demand as against the imported vehicles’ demand, what is the demand ratio?   From the statistics given to us,the difference is more  than 65%. So how do you relate that? So, if you say new vehicles should attract cheaper duty rates, while old vehicles should attract higher rates, that is normal standard.

These issues  raised here now, do you think that the government has not thought of them?

We have been on this. The beginning of every government formulation in any sector of the economy must evolve on statistics, it must have its base from a known census. Up till this moment, we don’t have any known operational census and that is why we are having this unstable statistics from INEC. That is why INEC is still finding it difficult to know when and how to go about issuing the Permanent Voters Cards. How many census have we done, is it in ’96 or is it the one Obasanjo did in 2003? Is that what we are looking at? That one was baseless because it does not ask you your religion, it is assumed that if we talk about religion there will be crisis, so it’s just a head count of no particular detail of who we are, then any other person can equally be counted as a Nigerian. A forward looking government that is committed to transforming its people must base its budgeting on national census. If we have not conducted census in this country to know how many we are, know the percentage of Nigerians that are graduating, the percentage  that are into trade, those of them that are into agriculture and farming and other things, those that are the so called political elites. If we have them then we know how much we are budgeting for the universities, this will now show you why we are not mapping out so much money for, like research and development, our research and development sector in the universities, they are nowhere.

Now, what is posterity where are we moving forward to? We should know how many kids are in primary schools and those about to graduate from higher institutions, its only when we have these we can now budget adequately for the health sector, education, the civil service commission and those ones that are retirees, the old, we should care for them, it’s not only during political campaign.  Census well conducted for the purpose of economic development and socio- economic development would go a long way in solving some of our problems economically and otherwise. Again, one other aspect I have tried to pencil down and I have spoken about and it just appears as if maybe we have not really made impact because I know we have spoken about it at several quarters in the year 2014, now I also want to bring it to the front burner of verdict whether we like it or not. We must go beyond the great propaganda of always trying to acquire 10vessels or 5. Let’s stop wasting time if we are acquiring these vessels let us acquire them, if the principle of competitive advantage is something to go by. I think that this age of transformation should be aimed at revamping our sea port.  When we revamp our sea sector then in reconciliation, we will revamp our automobile sector, we revamp our shipping sector as well.

Today, look at the people saying they want to build shipyard, if we have a shipping sector we have to build shipyard because we know that we have enough steel to the point of building ships. So ship building should form a center stage and not ship acquisition. I am opposed to ship acquisition but at the end of the day we don’t have the human resources to go about it. Our seafaring cannot thrive; they cannot be recruited by international and foreign vessel owners because they fear that their sea faring experience is nothing to go by. It is when we start building ships and we have enough cheap labor channeled towards this, that we will attract patronage from other international communities to come and build ships in our place not only to create employment but also a way of cementing what I call local content. We must use those things that we have as comparative advantage to negotiate those things we don’t have as a people. We have steel, in the steel sector. I will give an example of North Korea. North Korea does not have steel, they don’t have iron ore and cooking coal, these are the two components that drive steel production, they have been exporting wigs, plywood, fish and apparel (cheap clothes) as the main stay of their export activities and means through which they earn their foreign revenue. Their government recruited young men and they said look, the only way for us to survive and become a world economic power is to go into steel production. These group of people drew a sketch on the way to go about it, put it on paper theory, they presented it to World Bank, which said they could not give them such huge amount of money. World Bank argued, ‘you don’t have iron ore neither do you have cooking coal, moreover you want to run this venture as a state owned enterprise not as a private owned enterprise’. So the World Bank rejected their proposal and never gave them the money. Now they approached Japan.When Japan saw the way they packaged the proposal, Japan gave them the money, when they got the money from Japan, from Australia and other neighboring countries they started importing iron ore and cooking coal and they started the construction of that very project. Today, North Korea is the third largest producer and shipper of steel, within 10years they have taken over the market of steel, globally, how much more Nigeria where we have Ajaokuta steel and so many other steel mills and even the one that actually made lead way was Niger Delta mill, we know of them in those day where are they now? I don’t want to dabble at the billions that are wasted in Ajaokuta steel by successive past governments.

Why is it not working?

I think I will rather say that if we can, Mr. President, God bless him, get him to write down his transformation policy on how to revamp this sector, give it much attention as is being given to the power sector, if we can get that done all this idea of automobile sector policy will go, because on our own we won’t beg anybody to come, they will be the ones that will come in directly through private initiative not government creating enabling ground, they will come, there are few factors that attract Foreign Direct Investment (FDI) number one, is a viable local content requirement, your foreign exchange requirement should be high, all this issue of  inflation and fluctuation of prices every other time, uncertainty is not good for any growing economy. A viable workforce, labor, a good  political time piece, that is, in terms of security, if you have this going for you as a nation foreign investment would come on its own. It is only when you don’t have these that you go shopping, meandering, traveling here and there and start canvassing; you don’t need to canvass if you have these four things mentioned. It is the duty of the ambassador of all the countries to shop either online, that this is what you can get from Nigeria and you will see people visiting our embassies abroad, and come to Nigeria and invest. Now Prof. Charles Soludo is saying that 30 trillion naira was stolen and the Minister is saying no, yet they are both economists. So they understand those their economic fabrication, remember that when Soludo came on board one of the first things he tried to do which was opposed by the cabals was the simple thing that Ghana did, remove two digits or three digits, let our 1000 naira become 100 naira as its value.  Today, if you touch one Ghana Cedi, it has the weight of one dollar.

In summary, how come while the oil windfall was booming we were unable to put our refineries to use yet so much money was saved?  Therefore, it would have been better if the economic policy has stated that  every state instead of all this federal allocation, give them half percentage of the allocation instead of giving them cash, give them crude oil to go and refine and sell, let them create employment for themselves. Let them look for investors to come in each of the states that will make Nigeria a healthier place, but the power control in the center will not allow that.

But some states will not be able to handle that 

Why, how much do you require, it is not a project that is done in a year, each state, this is your allocation, this is the amount you can sell, it is about budgeting, it is about trust, it is about discipline, about serving the people, and not serving self, why can’t they, the duty of the federal government and its agencies is to supervise it, that is when you can hold governors accountable and then people will now see that you are not the one playing politics with them but their governors. When you give them some of these allocations they will map out huge amount of money and say it is for security vote, who is deceiving who, there is no more insecurity threat in Owerri because the man Rochas created employment  cuts across, that security vote has been deployed to gutter cleaning, people must be doing something. In the same manner let states come and buy crude from you, let them start doing it, private individuals who want to own refineries would build it, other than maintaining a long list of exporters and importers of refined petroleum crude products plying our water ways, the main fact remain that within this period there are no private refineries, no state owned refineries.

And Dangote is building one

The federal government refineries are not functioning or operational, I don’t think that SURE -P has any success story. It’s not about equipping hospitals or training people to become artisans. That is not the so called relevance. What SURE-P is doing is what National Directorate of Employment was doing before, so why can’t you sustain it, because these ones before now had their offices, why come up with another initiative?

Before now  we had talked about many conferences we had last year, seminars, solutions proffered on how to move the industry forward, from your perspective, do you think that these solutions will come to fruition or will see the light of day because I attended so many of them, some invited even foreign experts to come and talk?

It is a normal thing for a sector, any sector in the nation to meet as often as possible to brainstorm in order to supply ideas. It is a healthy process of any nation building, I am not too concerned about how many times we have met, where I oppose is where we now try to take some of these meetings and give it another name and travel out of the shores of this country to go and waste our hard earned tax payers fund. Provided we are doing it here to provide solutions to our ailing sectors there is nothing bad about it, if the government of the day does not have enough fingers to sit down say by way of advices and they are unable to address some of these decisions, that does not mean that they are no longer there. I know for instance, the Minister for Transportation, it took so many years for us to actually give him a fight and make him see the need to regulate pricing system in the port sector.

The issue of arbitrary charges was discussed at different for a, uncountable decisions, fact- findings, resolutions, recommendations have also been penciled down all in the ministry of transportation, but after some time, you see them coming out of their shell, to act, I never thought that any government agency or minister will reject an idea of what to do to his ministry to move it forward because there is enough ideas from great minds put together for any minister to look at and do the right thing, but political interest, selfish interest remains the bane  we will fine tune it, we will get it right. Even. this year if God gives us the opportunity, we will enter into advocacy, have you also forgotten that we have also clamored for judicial commission of inquiry into the maritime sector, let us  x-ray some of those things that never made us move forward, let us look at some of those factors that have also continually made it impossible for things not to move beyond this way. Aqua group came up and told us that by his own findings and statistics that government makes up to 17trillion from the maritime sector alone, and he buttressed this with facts, we don’t take such statements as mere patronage, it requires urgent intervention of the government, government must take the maritime sector seriously, not by way of introducing 10% VAT. That is not the issue, it will over burden the sector, it will make the sector look  exorbitant, so we are not giving up, we will continue to say it, air our views, make presentation to those that are concerned, we know it will be well if there is anything we have noted.