Why There Are Anomalies In The Transport Sector – Prof. Ogude

In this interview with Segun Oladipupo, the President of the Institute of Transport Administration (IoTA), Prof. Innocent Ogude, the first Transport Management professor in West Africa bares his mind on the economic role of the Shippers’ Council as well as the rot in the transport sector of Nigeria. He also elucidates on the prospects that the institute is set to achieve within a short time.

The theme of IoTA’s conference 2014 is Transforming the Transport Sector in Nigeria, what exactly is Institute out to achieve with the conference?

The transformation that IoTA is talking about is really derived from the agenda of Federal Government. The Federal Government has a well articulated transformation agenda for all sectors of the country. When you talk of transformation, you are talking of growth and the development following the agenda of government to induce growth and development in the economy, we also talk of transformation in transport sector, because that is the sector where we belong.

So, the reason we want to do that is to examine how Nigerian transport sector has been transforming over the years beginning from 1999 when we began the conscious program of reform, but in order to transform, you have to reform and the transformation is in two ways, we do not have the infrastructure, our infrastructure base is very low and we also do not have institution, so the thing we want to do is to grow to grow infrastructural base and then to bring about the institutions that will ensure that it is a steady growth in the transport sector, so these are the reasons IoTA wants to key into that programme of transformation of federal government, to let people know what it is and to critique it and say the way forward for the progress of this country with particular reference to transport.

Let us talk about the regulatory agency in transport sector, they don’t have one yet?

We do have regulatory agencies in terms of those who regulate safety and combine it with operational regulation. What we do not have essentially is economic regulation. Let me elaborate on what I have just said, if you a look at the maritime sector for instance, a National Maritime Authority is a regulatory agency, but it is in charge of the safety aspect and in charge of regulating the growth of the shipping sector, not the economic of it, if you look at aviation sector, the NCAA (Nigerian Civil Aviation Authority) is actually by the decree  establishing them in 2005, they are supposed to be in charge of audit, economic, and safety aspects, they are not doing the economic aspect, but the decree said they should do both.

If you look at the maritime, the port sector, there is no regular there because the Port Authority is supposed to be the regulator and the operator, but with the transformations that are taking place or the reforms that are taking place the Nigerian port is now the land lord and we have various customers who are running the port, that means that there is competition already in port operation, because we have 26 concessionaries that are running the port, and that is where economic regulations comes in, where there is a regulated environment, there must be an umpire; somebody who will be in charge of making sure that the rules of the market are observed, that there is fair play and that the customers do not get short-changed by the actions of the people who are acting in this sector.

So you can see that what I have just said is the same thing with rail sector and all that. So why I said there is regulation is that there is regulation but is not the kind of regulation that we want in terms of the transformation that we are going into. The kind of regulation we want is to make sure that there is a free market environment that is, in a situation that every transport sector will have different operations who are competing in a fair game and we have to have an umpire that is regulating their economic behavior not safety behavior. That umpire has not yet been touched, and that is what the federal government is proposing when they are talking of the National Transport Commission, it is yet to come when the National Transport Commission comes, it is going to be in charge of economic regulation in the rail sector, economic regulation in the maritime sector , economic regulation in the inland water way sector but not the aviation sector. When I was talking, I ignored the road sector, there is also a transformation in the road sector as we see in the paper that I presented.

The transformation that will take place in the road sector will ensure that the monopoly of the road sector occupied presently by the ministry of work through the unbundling of the ministry and creation of Roads Transport Authority, Road Authority, Federal Roads Authority and perhaps the creation of an  authority that will be in charge of road transport. Because they are of two parts; road infrastructure, the building of road and the people who have been using the road. Right now in Nigeria, nobody is in charge of the people who are using the road so that National Transport Commission will also be in charge of the economic regulation of the road sector and the road transportation.

Talking about road transport, where do you think the anomalies bedeviling the sector started or from?

Anomalies? They started from the fact that Nigeria left the road transport sector to be in the hands of private operators. Nigeria has always been in charge of roads but nobody is in charge of road transport operation and I think that’s what you are asking about. The reason I think for the anomaly is that, that sector has always been left in the private sector, it has been left in the private hands, in other words, operators have free entry and free exit from there. Government has not made it mandatory for them to be organized, that is why you see that, one man can just start the road transport sector. So many of the cars as you can see running the roads belong to different people, the same thing happened in the freight sector, it is very recently when we began to have organised transportation by this luxury buses being bought by some people. That is a form of organisation but government has not come along to say no that you can no longer do this in this kind and in this kind of thing there must be a regulation.

For now, nobody is actually in charge of that road sector, road transport operation, but there will be caution in saying what I have just said because, the road safety commission has some aspect of regulatory behaviour in that sector. I am aware that they register the luxury buses, that they register the big lorries and give instructions about safety behaviour but not economic regulation, so we can say that by some way the federal road safety is now in charge of the safety regulation in road transport operation. We are still lacking somebody that will be in charge of economic regulation.

How soon are we waiting to see that?

It will come whenever the Nigerian government concludes the reform agenda. The question is when will they conclude reform agenda? The conclusion of the reform agenda and the time limit will depend on how effectively the Nigerian government is able to do the policy of the transformation. You know we are in democracy and this thing to get the transformation and the institution set, you must have to have a corresponding legislation and that corresponding legislation means that the request have to go through the National Assembly. But its assumed that the National Assembly is persuaded to pass the National Transport Commission Bill, that is when we will have this regulatory agencies. Remember that Nigeria has the economic regulation of the road transport operation sector as we have maritime because NIMASA is responsible for doing that in the maritime sector.

We also have a body that is responsible for that, that is Nigeria Institute of Transport. I talk about the role of Shippers Council, they are not regulatory, they arrogated the regulation to themselves in my own view, it must be an unstated thing, it is not stated in their status. Nigerian Civil Aviation Authority does that thing every day in air sector. We have said in the road sector, the federal road safety and then the maritime sector the NIMASA and then we do not have a corresponding authority in the road sector but National Transport Commission will do all of them and that is the truth. The Shippers’ Council is not statutorily an economic regulator; what Shippers’ Council was established to do is to take care of interest of Nigerian shippers that is, those who do ship goods and those who receive goods that come into the country because we see that in the world generally, the developing countries are by the way not strong enough to get a good bargain in terms of freight that they should pay when they export goods and they pay too much to import goods. The Federal Government established the Shippers’ Council to take care of the interest of the shippers because the shippers cannot bargain internationally.

Are you aware that it is the Federal Government that pronounced them the Economic Regulator?

I am aware even that Shippers’ Council has presented a bill to the National Assembly to enact a legislation making them the economic regulator and I read in the papers that the Minister of Transport pronounced them as an interim. Remember, to get an economic regulator, you need legislation. I don’t know the reason that one was done but as an academic, I can say the only problem with such things is that regular things get aborted when you try to have temporary measure. It may be the case that from now, Shippers’ Council will begin to perform the function for which it was not created. If the government intends to despise the shippers function and make them economic regulator, then the Shippers’ Council needs to have experts who can actually do the economic regulation.

Are you saying what they were trained to do is different from the assignment given to them?

I don’t know about training but what they were asked to do is not economic regulation, they desired to do economic regulation. I have not interviewed them as to know how and they have not reached out to people who can actually help them. But what we want to ask is what economic regulation are they doing? We have not created the environment for successful and sustainable economic regulation. We don’t know who they will regulate in the rail sector. Are they going to regulate the Railway Corporation?

Are you that the Nigerian Shippers’ Council is to act as the economic regulator in the maritime sector?

If they are, there are some people that can be regulated there because we have at least 56 competitors who are operating in a free market economy in the maritime sector. In the road sector, we do not see who they will be regulating because they cannot regulate the Ministry of works that is still a monopoly and it is yet to be unbundled. It means we created an environment for the regulator and they are appointed. However, it is possible that if they understand the function of economic regulator, they can now begin to urge the government to complete the environment for a successful regulation and that can only be done by creating the National Transport Commission and it then mean that they will transform into the National Economic  Commission. To do that, they need staffing because regulation is not just a question of where people will come and do what Nigeria do where everybody is an expert and this is not true. Economic regulation requires getting transport Economist and getting transport lawyers. These are the key people who can make economic regulation effective. And in my own view, it is not what people can just do like that.

What level is IoTA now compared with the previous years?

We are trying to transform. You know that I am the new president; it will mean that I am going to access myself right now. What we are trying to do here is to bring IoTA to higher level in a situation where they can begin to play a role as a body that will have interest in the transport sector, that will influence the professionalization of the transport sector, that will influence the continuing education of the people who can describe themselves as transporters in the sense that they are transport experts. That is all that I can say. For you to judge whether we can fulfill that role, and in the process of trying to fulfill the role that we actually organising conferences and I think that the conferences are going to be successful. This is our first time and whatever is the outcome, we will hope to improve on the success of the conferences.