2017: Rating Government Agencies In The Transport Sector

The year 2017 was one loaded with activities, issues and scandals in the Nigerian Transportation sector. While the aviation sector observed some infrastructural boosts such as the Abuja runway repairs; the debate on the concession of the nation’s major airports remains an issue with various sides to the prism especially on what parts of the airports should be concessioned, the looming challenges that may result from the absence of a regulator and the mystery behind the Aviation Minister’s request for loans from the African Development Bank despite the impending concession. The railway whose reforms has been tipped to transform the nation’s economy, also  observed some developments unlike shipping which continues to defy the laws of change as it remains, well, shipping with the multifarious challenges peculiar to Nigeria. MMS Plusbrings you an assessment of the major parastatals in the transport sector. For the grading system: A =90-100%, B+ = 80-89%, B =70-79%, C+ =60-69%, C =50-59%, D =40-49% and E = 30-39%, F = 0-30%. Enjoy it:

For the purpose of this study, the functions of NPA, also known as the landlord of Nigerian ports, were grouped in five major areas, with each carrying 20points:

•         Ownership and administration of land and water within port limits/ Planning and development of port operational infrastructure

The roads within the nation’s ports are relatively better than the ones leading to the ports; however, there are no lighting systems. It was expected that the Executive Order which called for 24hours port operations would lead the Authority improve the port infrastructure especially in the provision of lighting systems to enable work at night.Score = 10/20

•         Leasing and concession of port infrastructure and setting bench mark for tariff structure

As landlord, the Authority showed no concern about the work environs and challenges facing port terminal operators; continuously reneging on promises made to concessionaires in aspects of dredging while it collects duties. Score = 5/20

•         Day to day monitoring of operations and enforcement of relevant sections of respective agreements.

Under the leadership of Ms. Hadiza Bala-Usman as the Managing Director, the Authority displayed resilience in monitoring and enforcing relevant national policies like the monetary payment into the Treasury Single Account (TSA).

NPA equally rejiged its administrative structure which led to the scrapping of the Zonal offices that had become conduit pipes to siphon the Authority’s revenue.  Score = 15/20

•         Responsible for Nautical/Harbour operations and Hydrographic survey/ Marine incidents and pollution

NPA launched four new tugboats as well as new cafeteria and health facilities at the Lagos Port Complex; but little was done in curbing pollution and issuing statistics on marine incidents. Score = 8/10

•         Maintenance of safety and security at the common user areas/ Enacting port regulations and bye-laws as well as monitor and enforce them

In the area of safety and security, NPA Security personnel became famous with their corrupt collaboration with the Nigeria Police for extorting truckers and other port users at the port gates.

2017 also saw the Authority play an active role in scrutinizing and ensuring only certified trucks and freight forwarders were allowed entry into the ports; however, the system was later marred by corruption as some substandard trucks were seen to possess NPA stickers after bribing while anyone could walk into the ports with a bribe of N200.Score = 5/20

While the Managing Director received accolades for some achievements and rich collaboration with other stakeholders, the level of corruption at the Authority in 2017 grew to a frightening level that some NPA personnel boldly demanded bribes before endorsing contracts, signing documents or processing documents for payment of services already rendered to the Authority.

Nigerian Civil Aviation Authority (NCAA) has two major responsibilities which are; to regulate the safety of aircraft operations and air navigation and aerodrome operations. For this report, the core functions carry 40points each; while 20points is shared for other responsibilities which include; Monitoring of aircraft operating environment for safety and security, Regulating  methods of entry and conduct of air transport business, Advising the Ministry on policy formulation on aviation related matters, Balancing the economic interest of operators, users of aviation services as well as the general public and the nation as a whole and Setting of Aviation Training Standards and approval of Training Institutions and others.

Based on this framework, one could easily assess the performance of the apex aviation regulatory authority in 2017. In the area of regulating the safety of aircraft operations, air navigation and aerodrome operations, NCAA performed very well as there was no   major aircraft accident in the nation’s aviation industry last year.

The Nigerian Civil Aviation Authority (NCAA) for the first time in the history of air transport in Nigeria certified two Nigerian airports.  With the certification of the Lagos and Abuja airports, Nigeria’s rating has improved and these airports can also serve as hubs in West and Central Africa because they are the only certified airports in the sub-regions.

The Director-General of NCAA, Captain Muhtar Usman, explained that the certification would reposition air transport to contribute more to the Gross Domestic Product (GDP) of the country because it would boost passenger movement in domestic and international destinations.

He described the drive towards the certification of Nigerian airports as very significant, as a requirement by ICAO and the Nigerian Civil Aviation Regulations, but as one of the critical safety targets of industry.

Mr. Mohammed Odonowo, Director of Aerodromes and Airspace Standards, NCAA, said: “The expected benefits of aerodrome certification include enhancement in the provision of safety critical aerodrome facilities, services, procedures and personnel.

“It also include enhancement in collaborative decision making amongst airport stakeholders, especially between the aerodrome operator and the NCAA, as well enhancement in safety and efficiency of flight operations, as a result of improved facilities and services.’’

He added that it would facilitate the development of regional hubs through improved capacity, safety and efficiency and attract the inflow of capital investment into airport development and management.

In 2017 also Nigeria hosted the International Civil Aviation Organization (ICAO) World Aviation Forum (IWAF), for the first time it was held outside Montreal, Canada, the headquarters of the world body and Nigeria became the first country in the world to host the ICAO World Aviation Forum (IWAF) which held from Nov. 20 to Nov. 22 in Abuja.

Although this was the third edition, it was, however, the first time it was hosted outside the ICAO’s headquarters in Montreal, Canada and it attracted the global aviation community to the country.

According to the Aviation Minister, Hadi Sirika, the hosting  of the forum, which had the theme: “Financing the Development of Aviation Infrastructure,’’ was a big plus to Nigeria, as it has placed the country on the global aviation map.

Thus, NCAA scores 30/40 on both core functions.

However the industry recorded some incidences at the airside during the year in review that could have hampered air safety. This includes the poaching of passenger luggage on light aircraft that were in motion among others. On this basis, NCAA scores 0/20 on the other functions.

Based on the fact that the nation’s airspace recorded no single aircraft accident is a great boost for the regulatory authority and one could only be fair by giving it Grade C+.

For the purpose of this report, only the functions of the Nigerian Shippers’ Council as Port Economic Regulator would be analyzed. There are ten (10) functions and each carries 10points;

•         Provide guidelines on tariff setting in order to guide against arbitrariness; (Shippers’ Council’s role as the port economic regulator was questioned in the Lagos High Court after terminal operators challenged the Council’s powers to regulate tariffs. In 2017, the High Court ruled that such role of the Council was in conflict with the laws of NPA which empowers the Authority to regulate the ports. Although, last week the Court of Appeal in Lagos also passed its judgment on this, the certified true copy was yet to be released as at press time) Score = 2/10

•         Monitor and enforce standards of service delivery to ensure availability, accessibility, affordability, stability, predictability and adequacy of services; (Shippers’ Council wasn’t able to negotiate or standardize freight rates for trucking, trains or carriage of goods via the waterways. However, the Council was able to engage several service providers like freight forwarders, truckers, chandlers, etc.) Score =  5/10

•         Encourage competition and guard against the abuse of monopoly and dominant market positions; (This role was also hindered by court cases) Score = 2/10

•         Perform mediatory role among stakeholders; (The Council was able to perform the role of an intermediary and an unbiased umpire amongst the industry stakeholders) Score = 8/10

•         Establish accessible and modern dispute resolution mechanism; (the Port Service Support Portal and Standards Operating Procedures initiated by the Council in 2016 led to easy dispute resolution and seamless accessibility in 2017) Score = 8/10

•         Regulate market entry and exit; Nothing was done in this aspect Score = 0/10

•         Promote efficiency in the provision of port services; (the Council was able to engage several service providers like freight forwarders, truckers, Customs, terminal operators, etc on the need to promote efficiency but few improvements were recorded because inefficiency earns some stakeholders like terminal operators, shipping lines and dubious Customs officers more money) Score = 4/10

•         Minimize high cost of doing business and prevent its inflationary effect on the Nigerian economy; (Despite several meetings and roundtables to get stakeholders reduce the cost of doing business at the ports and the country at large, other external factors made this unrealistic leading to higher costs and inflated economy for most part of 2017)Score = 2/10

•         Encourage private sector investment in the port sector; (The Council was seen to play this role actively in soliciting sponsors and facilitators for the Inland Container Depots and Truck Transit Parks last year) Score = 7/10

•         Monitor and ensure compliance by all parties with the provisions of the Port Concession Agreements. (This role was also ridiculed by court cases) Score = 2/10

The Council made several efforts to engage stakeholders ranging from freight forwarders, trucking associations, maritime lawyers, maritime police, NIMASA, Customs, Inland Dry Port operators, Truck Transit Park facilitators. The commissioning of the Kaduna ICD a fortnight ago was possible as a result of the Council’s relentless efforts as it has been in the forefront of developing the nation’s transport sector albeit acting as the National Transport Commission it has been tipped to evolve to, in the near future.

The Council should continue to train and develop its workforce because on certain occasions when the Executive Secretary and other top directors had to be away for events, the Council went on holidays as workers closed earlier while some resumed late.

The major role or the Nigerian College of Aviation Technology (NCAT) is to train aviation professionals and in 2017 the agency was seen to be actively involved in training aviation professionals. It performed so well that the International Civil Aviation Organisation (ICAO) granted the regional centre of excellence status to the Nigerian College of Aviation Technology (NCAT), Zaria.

The President of the ICAO Council, Dr. Olumuyiwa Bernard Aliu, gave the certificate of the NCAT’s new status to Vice President Yemi Osinbajo at the third ICAO World Aviation Forum (IWAF3) held in Abuja. With that status, Nigeria is recognized as an aviation training centre of excellence and will be training manpower for West Africa and beyond. The college performed creditably well hence its new status by TCAO. Also many of the aviation agencies had their staff trained at the college. On this basis we score the training institute 80/100.

As a major revenue base of the government, the Nigeria Customs Service (NCS) is one of the most prioritized government institutions. Grading the Customs would require tact and an in-depth analysis premised on about four (4) of its statutory functions.

•         Collection of Revenue (Import /Excise Duties & other Taxes /Levies) and Accounting for Same:

At the end of 2017, Customs exceeded its revenue target of N770 Billion for the year with about twenty seven per cent (27%) and well above the eighth hundred and ninety eight (N898) Billion Naira collected in 2016.  It means the Col. Hameed Ali led Customs recorded the highest Customs revenue generated in a single year.

The Customs took some strategic measures in terms of restructuring and repositioning for efficient service delivery which includes strict deployment of digital identification method which enables Customs officers to identify consignment such as vehicles using the mandatory vehicle identification number, (VIN)”.

Declarations on vessels increased drastically in 2017 due to the use of digital application to locate vessels on Nigeria waters and request for payment of appropriate duties as data of the vessels are available through the digital platform and eventually resulted in this historic revenue figure in 2017. This is despite the economic recession experienced earlier in the year, with low volume of imports and restriction placed on forty one (41) items from accessing Forex.

However, analysts have bemoaned the 2017 performance of the NCS, putting it below the performance in previous years. These economic experts have faulted the NCS figure on the basis that the value of naira depreciated significantly as against the dollar in 2017 and Customs exploited the increase to collect their duties in dollars and at the current rate as at the time of payment rather than the amount entered when the bill of lading was generated. They had compared the value of the naira in 2014 with its value in 2017 and arrived at the fact that 2014’s N977.09 billion revenue generations was higher than the N1.03 trillion. It then means that despite having higher figures for 2017, when compared with previous years, especially 2014, before the advent of the current Customs management, the service’s revenue generation value in real terms is on the downward trend.

Remarkably NCS can be commended if one takes into cognizance the prevailing issues around the nation’s trade system, especially, with regards to Nigeria’s current trade policies targeted at growing the local economy, which when considered, could change these opinions. Score = 18/25.

 •         Anti-Smuggling Activities:

In anti-smuggling operations which translate into prevention and suppression of smuggling, Customs seems to have done creditably.  There were several colossal seizures and multiple sensitization programmes, campaigns and seminars to increase awareness on benefits of legitimate trade and the dangers associated with smuggling.

However, Customs cannot be claim credit for massive interception of contrabands, false declaration and under-declaration, etc., without equally receiving the whip because Customs officers at the ports aided these sharp practices.

Customs cannot also shy away from the challenges of arms influx and other dangerous goods which almost characterized the polity throughout the year 2017. With the over 2,500 pump-action rifles that were seized ‘Imagine how many escaped their search’ a concerned freight forwarder asked our correspondence. Again, the absence of functional scanners still remained a major challenge in the fight against smuggling.

•         Trade Facilitation/ Engaging in Research, Planning and Enforcement of Fiscal Policies of Government:

Trade Facilitation by Customs experienced renewed efforts in 2017. The service introduced the Authorized Economy Operator (AEO) programme for effective trade facilitation. NCS organized various seminars and programmes to teach the stakeholders, importers, freight forwarders, clearing agents and others globally acceptable standards of doing business. Despite promises, Customs could not implement the Executive Order on 24hrs operations at the ports and other policies on ease of doing business. The acclaimed revenue success was actualized at the expense of Freight Forwarders, Clearing Agents, and Importers most of who operated at a tight atmosphere because of the dwindling currency and exchange rate coupled with prevailing policy environment which formed as major determinant.

Not much was heard about Customs plausible role in Research and Planning. The Federal Government’s ban on land importation of some goods, relatively high tariffs and other exorbitant charges coupled with forex shortage also indirectly contributed to the hardship.

•         Working In Collaboration With Other Government Agencies In All Approved Ports and Border Stations:

 Another statutory function is for Customs to work in collaboration with other government agencies in all approved ports and border stations. There were some notable achievements in this aspect as Customs successfully synergized with sister agencies including Nigeria Police Force (NPF), Standards Organization of Nigeria (SON), Nigeria Drug Law Enforcement Agency (NDLEA), National Agency for Food and Drug Administration and Control (NAFDAC), the Nigerian Army in ensuring compliance, combat smuggling and other forms of crime which encompasses illegal commercial activities and trade in illicit goods; e.g. import of fake and sub-standard goods; Infraction on Intellectual Property Rights; Illegal international trade in endangered species; Illegal trade in arms and ammunition; Money laundering; Traffic of illicit drugs; Illegal trade in cultural Artifacts; Importation of pornographic materials; Importation of toxic and hazardous substances. Several seizures were handed over to the relevant agencies for further investigation.

However, there were also some accusations against Customs on the modes of interception and investigation of intercepted arms that at a point the Police Commissioner at the Western Ports accused the Customs of sidelining the police in its investigations. Score=12/25

As the performance in 2017 has broken the records of past revenue collections, it is expected that Customs improves tremendously on this and other core areas in 2018. It has observed that smuggling activities are increasing on daily basis despite Customs’ acclaimed clamp down on smugglers. The absence of scanners remain a major concern and there is suspicion of syndicates in the Service considering the manner with which some consignments find their ways out of the ports only to discover concealments, wrong classifications, contrabands and wrong declarations. Meanwhile, its key global function as a trade facilitator has taken a back stage.