Policy Disconnect: Industry Bigwigs Plot To Rejig Shipping Sector

In a bid to address the myriad of challenges plaguing Nigeria’s maritime sector, shipping industry stakeholders have resolved to address the policy disconnect via a holistic and robust engagement with policy actors such as; legislators, relevant Ministers and the presidency.

This approach was birthed at a breakfast meeting organized by the Nigerian Chamber of Shipping (NCS) on Wednesday, themed: “Nigerian Economic Outlook 2022: Special Focus on Maritime/ Shipping Industry”.

At the online summit, industry experts lamented that the nation’s maritime sector has continued to re-echo its numerous potentials and challenges without commensurate efforts by the federal government and private sector operators to change the narrative.

Describing this problem as a ‘policy disconnect’, Dr. Olisa Agbakoba, SAN, lamented that apart from the National Bureau of Statistics (NBS), the place of shipping isn’t captured in other national policy frameworks and economic development plans of the country.

To address this challenge, Agbakoba called for a robust industry stakeholders engagement with the policy actors; especially the legislators, relevant Ministers and the presidency.

His words: “I attended a recent policy summit with about 23 Ministers, some Governors and Dangote Group. The focus was on national economic plans for 2022 and 2023 as well as the transition period following the general elections. However, there was no mention of maritime. I was glad to be there and seized the opportunity to talk about the place of shipping. When maritime is completely neglected in the national development plan from 2021 to 2025, there is a problem.”

“There is a need to get the policy actors involved in our discuss. It is time to connect the legislators, relevant Ministries and the presidency. We can’t keep talking to ourselves. We have to address this policy disconnect and galvanize support industry wide with the media and utilize other engagements”

Agbakoba expressed optimism that the crucial policy actors will be reached and successfully engaged if industry stakeholders show the same level of commitment which led to the attainment of the Cabotage Act several years ago.

On his part, Dr. Chris Asoluka agreed that there is a dire need to reframe the nation’s maritime sector even as he stressed that shipping can’t exist outside the ecosystem of politics, law and environment.

Asoluka lamented that government agencies and private companies in the nation’s maritime space operate with silo mindsets without recourse to the overall interest of the nation.

He equally noted that this silo mindset has led to knee-jerk reactions to major problems in the sector, instead of holistic approaches to address the root causes of the problems and prevent reoccurrence.

“When we say that to solve the challenges with cargo clearance we should build new ports, to address poor Customs operations we sack the officers and we blame the Nigerian Maritime Administration and Safety Agency (NIMASA) for all problems that have to do with maritime safety and administration; we aren’t really addressing the problems.”

“Some industry stakeholders have called for the development of a national fleet but we haven’t discussed the kind of vessels. Shipping is a derived demand and we must watch out for the drivers of shipping. With the advent of electric and solar-powered vehicles, demand for crude oil and oil tanker business would dwindle in the near future,” he said.

Asoluka, however, stressed the need for Nigeria to identify an area of shipping to be known for. Noting that Philippines are known for seafarers development, South Korea and USA for ship building, Netherlands and Belgium for port development; he argued that Nigeria should identify its area of competitive advantage.

Speaking on some of these shipping opportunities, a former NIMASA Director General, Dr. Temisan Omatseye showed a graphic representation of the oil tankers and container vessels at Nigerian seaports and neighbouring ports, stating that coastal shipping business would always be available in Nigeria.

“Containers will continue to come into Nigeria and crude oil would still be taken out. Nigerian National Petroleum Company (NNPC) Limited would continue to bring in mother vessels that would need to engage smaller ships because they can’t access Nigerian ports. These are low hanging fruits and they are areas for investments,” Omatseye said.

However, he stressed that there should be alternative means to evacuate cargoes from Lagos ports and other approaches such as barge operations and railways be explored to get cargoes to the Delta and Eastern region in a manner that meets global best standards.

At the summit, complexities and inefficiencies in Nigeria’s port sector were projected to cost the nation over N500biillion in 2022 as importers and freight agents are expected lose demurrage on container deposits for a minimum of 10 days on over 1.6million containers.

Speaking at the meeting, a Commercial Shipping expert and Managing Director of Aviva Quartet Limited, Mr. James Olley argued that the nation’s losses to container deposit would exceed $1.2million (N500,400,000 using the Central Bank of Nigeria, CBN, official exchange rate of N417/$).

Olley made this calculation using an average of 10days container deposits lost on empty containers, however, most experts assert that it takes a minimum of 15days to return empty containers after the initial free period of 3-5days.

His calculation were premised on an earlier postulation of Dr. Temisan Omatseye who stated that Nigeria’s cargo throughput should be around 1,626,606 twenty-four equivalent units (TEUs) in 2022.

According to Omatseye, taking into consideration a year-on-year increase of 3 percent, container throughput for 2022 should be around 1,621,606TEUs.

While appreciating Dr. Agbakoba’s call for a holistic approach to get policy actors prioritize shipping, Olley called for medium and short term approaches to salvage the sector, noting that import and export processes should be expeditiously reviewed.

“Apapa Port has been choked up since the port concession and the situation got worsened by the springing up of tank farms along the port access roads. Port business is so complex and cumbersome, no port in the world operates like Nigeria because every agency acts in silos without looking at the bigger picture”

“Government says goods should be evacuated from the ports in 48hours, but when does this 48hours really commence? It’s impossible to clear goods from Apapa port in less than three weeks and the biggest loser is the importer. The importer factors this delay and additional cost into the price of the products. We have to map up the business processes at the ports before engaging the government,” he said.