As national president of Association of Nigerian Licensed Customs Agents (ANCLA), Prince Olayiwola Shittu knows the inside out of port operations. In this interview with Maritime Correspondent, OLUWAKEMI DAUDA, Shittu, who is also a member Presidential Committee on Ports Reforms, examines Maritime’s role in growing the economy. Excerpts.
What is your take on the review of Customs Act?
The review is necessary because some aspects of the law have become obsolete. For instance, when you arrest a smuggler and you ask him to pay 10 shillings which translates to about N10,000. What is N10,000 to a smuggler in Nigeria? That is one of the areas we need to look at in modern time. There is no way you can set up a government organisation without an Act.
The Customs Act is CEMA. Customs all over the world have an organisation that controls how they operate from country to country. There is nothing fantastic that makes Nigerian Customs different from Cotonou Customs or Belgium Customs. What the National Assembly is doing about the CEMA now, is to look at those areas that don’t have modern tools for Customs to operate, to discourage smuggling, enhance enforcement and welfare of officers.
What are the major challenges facing the ports?
Lack of port facilities, such as roads, water, rail and interference by non-licensed agents. Everyday, even in my office as the national president of ANLCA, I am confronted with various mind-bungling activities of both our members and some non-members in the clearing of goods at the ports. People are not compliant at all. A situation where we encourage the importers to under declare and undervalue imports shows that we are not professional enough.
What do you think is responsible for this?
I would rather say it is the Nigerian factor, because it is only in Nigeria that people know what to do and they are not ready to do it. People don’t want to pay tax or for the services rendered to them by the government. It is the duty of the citizens to pay their taxes and levies, then demand accountability from their government, not the other way round. So, I think we need the re-orientation of our people and thinking in this country.
How was the ports under NPA before concession?
The operations at the ports were bureaucratically tied to the ministry and that was why the managing directors of the Nigerian Ports Authority (NPA) were incapable of doing what the terminal operators are doing at the ports. Because, for everything they have to do, they have regulations, processes they must pass through; some approval must come from the minister or from the Federal Executive Council (FEC). Based on that, you cannot expect what is happening at the port now to have happened. The truth is that we must follow changes.
Do you think there should have been wholesale concessioning of the ports?
There was nothing wrong with the concessioning of the ports. What the people were against was the concessioning of all the ports. If we had a model where some of the ports were allowed to be run by NPA on commercial basis, that would have given rise to competition to the concessionaires. There would have been a base line. When you concession all the ports, what you meet in port A is what you meet in ports B and C. Concessioning is not bad in itself, but what is wrong is the process of concessioning. For example, if you concession and give longer period of gestation for the concessionaire to recoup their money, there is no concessionaire that would wait for 20 years to realise his money. They will start recouping now, automatically; it would affect how much you pay for services rendered by them. A concessionaire in Nigeria can say we have concession in Cotonou and other places, let use foreign base to determine the amount we charge in Nigeria, but they have forgotten that the efficiency level in those countries may not be the same in Nigeria.
Is government performing its resposibility after concession?
As at the time of concessioning, there were clauses that the government themselves must be responsible for the provision of certain facilities to these concessionaires. The concessionaires paid you and the facilities are not there. It is a similitude of a man who wanted to rent his house and the gate is blocked through drainage and you as the landlord doesn’t want to spend money to remove the garbage and you want the caretaker to do it. Definitely it will affect the rent that would come back to you for the man to recoup his money. That is the sorry situation we are having in the port. For instance, common users facilities like light, water, roads, rails and others are not being maintained by the government. They are part of government’s responsibility and you want these people to operate. Most of the challenges are those facilities that government is supposed to provide.
What is responsible for the laxity?
There is laxity because the government was in a hurry to concession because concessioning was based on political consideration. I can tell you that from the 26 concessioned ports all over the country today, they are not supposed to be more than four or five terminals. The reason is that if the APMT was to handle from here in Apapa to Port and Cargo Terminal at Tin Can, making it one terminal, they would be able to plan how that terminal would be operated. Holding bays for empty containers would have been cut out, holding bay for trailers that are coming to load, then you will now see a modern port in operation. But what they did was to balkanise the ports into various small concessions which has turned common users of road to where the trailers would park and cause congestion.
Until the government is ready to take the bull by the horn, either they take money from the World Bank or find other means and acquire all those areas around the Lagos Ports in order for us to have a modern port, the situation will remain the it is.
Why is it so?
It so because the Federal Government is biting more than it can chew in this so called federation. Everything is Federal Government and the amount of revenue the centre is getting is not enough to solve these problems. That is why we are creating crisis.
If the government is not doing enough, what of the concessionaires?
They are slow in fulfilling the agreement they signed with the government, maybe, because the government has reneged on its side of the contract. The concessionaires have to make use of what they have to get what they want. Part of of the reason for concessioning was to get Foreign Direct Investment (FDI). For example, what MTN and others did in telecommunications was to start building masts. They didn’t ask us to pay before they built masts. It was when the masts came and you can access services that you start ed paying. Remember how much a SIM card cost at that time too and how much we pay for air time before it finally got to where we are now. This happened because there was competition.
But in the ports, there is no record of FDI mainly because they have paid all the money and they are now collecting from us. Unlike the telecommunication sector, there was still regular flow of cargo that must be cleared. I need to tell you we need to understand the challenges of the concessionaires themselves before you know who to blame.
For instance, NPA handed over equipment to one terminal, saying they are about 37 equipment, only to discover that only two were serviceable. This means that the concessionaire has to go and bring plant from outside. In the mean time, they went to hire plants to complement what was on ground until they started bringing new equipment to the port. So, a government-run port would have given competition to the concessionaires. If I know NPA is running Port Harcourt port, for example, and I know it is cheaper to clear goods from there, why would I not go there? That is competition.
But some of the terminals are run by Nigerians?
What is the difference between a Nigerian and a white man when it comes to issue of how to make money in business? There is no difference because it is the same thing that is affecting all of them. There must be an incentive to patronise Port Harcourt port run by NPA on commercial basis, maybe on half the cost in Lagos. When I know as soon as I clear my goods from Port Harcourt Port and bring it to Lagos, it is still cheaper than clearing in Apapa, then my bill of laden will read Port Harcourt.
But since we have given all out, we must experience what we are experiencing now until we have enough equipment. This will lead to port charges going down. By the time we start doing export and less of import, charges will drop. So, if the energy level increases and production starts, our level of importation will reduce which will affect cargo throughput in the port.
How do we stop congestion?
To discourage congestion, you must stop people from using the terminals as storage facilities. I happen to be a member of the Presidential Committee on Port Reform, and when issues were being debated, the issue was: Is it true that people leave their cargo in the port? But we later discovered that there are so many reasons people leave their cargo in the port.
What are the reasons?
There are those that brought in prohibited items and are looking for an appropriate time to see how they can fly it out of the port. Flying of cargo out of the port to evade duty is still happening. So, they are ready to pay demurrage to terminal operators for the cargo to remain there until the coast is clear for them to do their illegal business. Others that leave their cargo at the ports are bulk importers. These are the people that import about 50 containers on the average and they give agents money to clear 10 and ask him to bring the 10 out so that when he sells them, he will bring out another 10. So, the port becomes storage facility of a sort. This is because it is cheap, if it is not, nobody will use it a storage facility. In the US, there is nothing called storage charges because within 72 hours, your cargo must leave the port. They don’t have room for storage. If you need a storage facility, you go outside the port and hire a place to store your cargo.
What has Customs and government done in this regard?
Customs has reduced the time for overtime cargo from 90 days to 28 days, yet people still leave their cargo in the port. If the Federal Government musters the political will and confiscates cargoes left at the ports, nobody will leave his cargo in the port.
But what is your take on 100 per cent cargo examination by Customs?
Customs is doing 100 per cent cargo examination because our people are not doing the right thing.
I have always told my colleagues that yes, we can go and complain about Customs, we can get up now to say these are reasons Customs is not doing their job. What if we go with just one folder and Customs comes with a trailer load of documents on non-compliance by the people?
What do you mean by non-compliance?
I mean under-declaration, under-valuation and that is why Customs raises eyebrow almost everyday. Look at the American system, Customs brokers take responsibility for their importers. They do so by paying the duty and carry the load out. How you deal with your importer is between you and the importer. But the importer, must, as part of the contract, sign for you, pay your bill within 72 hours after delivery. That is a country that has enforcement.
What is your take on Ogogoro village at the back of Tin Can port?
That land has been paid for and the government should just take over the place to create more space at the port by converting it to a terminal. It will surely give room for expansion. If NPA can do away with their residential houses, during the time of concession to enlarge the port, any space we can get now should be used to expand the port. At least, Japan built an airport on top of water. We should, therefore, be thinking of expansion using our water.
What do you have to say about deep seaport?
You don’t build a port without first thinking of the cargo that will come there. There is need for people to know that without the importer who is called the shipper, there would be no cargo; without cargo, there would be no port. If you go and build a deep sea port to take large vessels, where is the cargo that is going to go there? Have we thought about it?
But the idea is that they want the port to be the hub in the sub-region?
We need to start with the efficiency of the ones we have before thinking of a deep seaport because, as we are building a deep seaport, our neighbours are expanding their own. And it is left for the individual importer to decide where his cargo goes. Assuming 20 per cent of Nigerian importers want their bill of laden to be destined to Cotonou, is the government going to waylay them? No. if you build Ibaka deep seaport and the others ones, but no bill of laden is destined to go there, what happens?
Why are the ports outside Lagos not attractive?
Importers don’t find them attractive to send their cargoes. Even there is more traffic in the land borders than some of the ports in the east. It is not only Seme and Idi-Iroko we are looking at. There are still other ones in the north with huge cargo passing through them. They are all Customs ports, and at the end of the day, people pay their duty and carry their cargo. It is the importer that determines where cargo should go. If you think the Ibaka deep seaport, for example, is going to assist in a particular sector such as oil and gas, you already have port servicing them like Calabar port which is under-utilised. But if the issue of the road is addressed by the government, it would be cheaper to carry cargoes from Calabar to Aba.
The Federal Government has given Customs N1 trillion revenue target. Is this realisable?
It is good the government is putting Customs on their toes. The N1trillion target given to Customs is like a budget. A budget is like the plan for the year. And on any amount of target given to Customs, the determining factor is still the Nigerian importers. If there is no cargo, Customs will not manufacture money. Setting revenue target for Customs is not limited to Nigeria, it is a standard practice everywhere. Most countries that don’t even have oil rely on Customs as their major revenue source and also set target. The Secretary-General of World Customs Organisation (WCO) said at one of the meetings we had with him that the port of any county is dependent on what the government of that country wants to make of it. Some are for revenue generation, while others are just border and security control points. In some countries, what Customs does is to ensure that there is no importation of prohibited goods and you obey the law.
But look at the situation in Nigeria where the Federal Government regards Customs revenue as a component of what is required for the survival of the nation. Why would they not gave target? It they give you the target of N600 billion, they have done it before, and they realise N800 billion. Why should they give N600 billion the following year? They must give you something above that. But that does not mean that your not meeting the target is failure on their part.
Do you think there is improvement in revenue generation?
Yes. There is an improvement based on the efforts of the new management of the Customs in collaboration with customs brokers. Even the compliance level has gone up.
By what percentage?
Up to 70 per cent. The remaining 30 per cent is negligible because, even abroad, people still violate the law. But I am telling you that we should not get ourselves worried that if you don’t meet the N1.2 trillion, heaven will fall. No, heaven will not fall.
…Despite the increase in cargo throughput?
Yes. The government itself knows that there is increase in the level of cargo coming into the country and there must be increase in revenue. Therefore, we cannot blame the government for setting that revenue target. The idea is that you made this amount last year based on the volume of the cargo, we are expecting XYZ amount from you this year. So, you must have to work at it.
Security on the nation’s waterways has become worrisome. What are your perspectives on this?
The security situation on our waterways is very worrisome because it has been politicised. This is because people are not looking at the security implications of what is happening on our waterways now. Right from the time of the Niger Delta uprising, our government has not explored solutions to the challenge outside the political realm. It should be considered a national security mater.
It is only in Nigeria we have various security measures, security apparatus, security agencies dealing with the same thing and at the end of the day, the number of vessels that call in Nigeria as recorded by the various security agencies such as Customs, NDLEA, NIMASA, NPA and others are not the same. Is it good? A vessel is not like a car that you drive and it is gone. There are international convention guiding how vessels approach port and leave. How come these government agencies are giving us different numbers? It means something is wrong.
