A Review of the Nigerian Energy Industry

The many lingering issues in the maritime industry

Coast guard officers sit in an inflattab31 January 2014, Lagos – For most stakeholders the maritime sector of the economy did not fare well in 2013. They are of the view that there was no significant push for the realisation of the sector’s full potentials last year, with most of them saying that a lot needs to be done to ensure that the sector is positioned to contribute more to national development.

A cross section of the stakeholders agreed that the negative things that occurred in the maritime sector last year far outweighed the positive ones.

Indeed, sea piracy, mid-stream discharge, pollution, among other ills were hallmarks of the sector in the period under review. The National Assembly also failed to deliver on the passage of key maritime bills, especially the Port and Harbour Bill, Transport Commission, and the amendment of the Cabotage Act.

There was a consensus among stakeholders that the huge fortunes in the maritime sector, which have been adjudged the greatest revenue contributor to the central till, after the oil and gas, will continue to dwindle if the authorities did not take immediate concrete steps to address some of these issues, which include the following:

Cabotage came into being with the enactment of the Coastal and Inland Shipping Act 2003. The provisions of the Act made it clear that only indigenous ship owners have the mandate to carry out coastal trade and inland shipping. In fact, the Act is pillared on its core thematic provisions, which set out the limitations on foreign operations of cabotage shipping, and the tight conditions under which exceptions can be allowed.

These provisions are set out in sections 3 to 6 of the Act, which prohibit coastal carriage of cargoes and passengers except by wholly Nigerian owned, manned, built, and registered vessels. It also restricts towage by tugs or vessels to those wholly owned by Nigerian citizens just as it limits carriage of petroleum products and related oil and gas shipping services to vessels of Nigerian ownership.

Furthermore, the Acts prohibits domestic trading in the inland waters of Nigeria except vessels wholly owned by Nigerians.

In order to drive the implementation of the Act, the Federal Government initiated the Cabotage Vessel Finance Fund (CVFF). The management of NIMASA is saddled with the responsibility of managing the fund. It is in line with its mandate that the agency selected four commercial banks as primary lending institutions (PLIs). These include Sky Bank Plc, Sterling Bank Plc, Diamond Bank Plc, and Fidelity Bank Plc.

To ensure the effective disbursement of the fund, the Federal Government, in 2010 at Dicpharima House, the Corporate Headquarters of the Federal Ministry of Transport, Abuja signed an agreement with the four PLIs. Since then nothing tangible and concrete has taken place on the disbursement of the fund.
Many stakeholders have wondered why the Federal Government is yet to commence the actual disbursement of the funds more than six years it promised to do so.

The long and undue delay in the disbursement of the over $100 million that have already accrued to the CVFF has led credence to insinuations in some quarters that some persons in the corridors of power have perfected plans to divert the money to their private pockets.

Tongues have also not ceased to wag on the high interests that have accrued from the huge CVFF in the commercial banks. This is because, most often, top government officials are eager to go public on how much CVFF has accrued so far without a word on the interest it has accumulated from the date the money was lodged in the bank till date. Already, many banks are in a rat race to be the one to have the CVFF in their vaults because of the mouth-watering interests involved.
It is the expectation of stakeholders that the CVFF should be disburses without further delay this year as the absence of adequate funding is hampering the successful implementation of the provisions of the Cabotage Act.

Their position is not unconnected with the fact that the successful implementation of the scheme will adequately address the challenges of funding in the Nigerian shipping sector, particularly the issue of fleet acquisition. Will the Federal Government disburse CVFF in 2014 or will it have another reason to shift the disbursement date forward as it has done several times in the past? The disbursement or refusal to disburse the much awaited fund will go a long way in shaping the sector this year.

Security and Transparency
Stakeholders who spoke to our correspondent were unanimous in their verdict that that there is little or no security in the nation’s seaports and international borders. They also opined that that there is no due process and transparency in the way and manner business is done in the nation’s gateways.

They readily cited the lethal weapons imported into Nigeria through Apapa Container Terminal (ACT), Lagos, the largest container terminal in Africa about four years ago as an example of the porosity of the nation’s seaports. They queried the effectiveness of the numerous checks into Nigeria’s seaports and international borders if such a huge arms and ammunitions cache would get into ACT, remain there for months until they were discovered by operatives of the States Security Services (SSS).

The situation in Nigeria’s international borders, especially Lella near Sokoto, Idiroko, Ogun State and Seme, near Lagos does not significantly differ from the scenario in the nation’s seaports. Lagos base veteran licensed customs  agent and Managing Director of Ogbese International Limited, Prince Olusegun Ologbese took exemption to what happened to the Nigeria Customs Service (NCS) with the discovery of arms and ammunition in ACT,  as well as heroin and cocaine in Nigeria’s second busiest seaport, Tin Can Island Port (TCIP), Apapa, Lagos in 2010.

He averred that the Federal Government need to do more to ensure that security of lives and properties are not compromised in 2014. In view of the increasing activities of the Islamic sect fundamentalists, Boko Haram, Ologbese who is also the life patron of the Nigerian Union of Journalists (NUJ), Ondo and Ekiti Councils, urged the Federal Government to put measures in place to ensure its security operatives in the seaports and international borders are extra vigilant.

“They should be on the look out for any suspicious transaction or movement within and outside the ports. That is the only way, we can enhance security and safety of life and property in the terminals”, he said.

Independent Regulator
Many have agreed that the concession of the nation’s seaports which started in 2006 with the kick off of the economic reforms programme initiated by the Chief Olusegun Obasnjo’s administration was necessary and decisive step taken by the Federal Government. This is due to the fact that the monumental rot that characterised port operations in the pre-concession era has been minimised and in some cases totally eliminated.

For instance, ‘container flying’, an euphemism for taking cargoes out of the nation’s gateway without paying a dime as duty after settling some insiders has reduced drastically. Indeed, since the concessionaires took over the day-to-day running of Nigerian ports situated at Calabar, Onne, Sapele, Koko, Lagos, Warri and Port Harcourt, there is a tremendous improvement in cargo throughput.

There is also increase in vehicle traffic as statistics made available by the management of NPA has shown. However, not a few have questioned the way and manner the exercise which was midwife by the Bureau for Public Enterprises (BPE) was carried out. Taking an overview of how the concessionaires have fared since they took over the ports, erstwhile President, Maritime Workers Union of Nigeria (MWUN), Nigeria Ports Aises (BPE) was carried out.

Taking an overview of how the concessionaires have fared since they took over the ports, erstwhile President, Maritime Workers Union of Nigeria (MWUN), Nigeria Ports Authority (NPA) Branch, Comrade Leke Sani said the maritime sector has not done badly.

Nevertheless, he opined that the problem is that the huge revenue that ought accrued into the coffers of the Federal Government for the benefit of the citizenry is going into individual pockets as many of them have not fulfilled the promises they gave at the time they took over the terminals. The unionist expressed dismay that while the terminal operators are making almost 500 percent gains on all their charges, significant development and facilities upgrading in the ports are yet to be seen.

“They promised heaven upon earth before the concession, but we have not seen anything tangible. They are making much money. The job creation they promised at the time they were coming in is not there”, Sani said.
The union leader however expressed delight that one of the good things that the maritime industry have recorded is the quick turn-around time of vessels calling at the nation’s seaports. According to Sani, the development will encourage other port users to start looking at Nigerian ports as a friendly port.

Stakeholders in the maritime industry have opined that the absence of an independent regulator to serve as a check on the excesses of the terminal operators has remained the bane of the port concession since 2006. Though, a bill is in the works in the National Assembly, the pace at which the lawmakers are going about it shows that it may not see the light of the day before the end of the present legislative session.

This explained why many stakeholders have clamoured for a quick passage of the four maritime bills, especially the Ports and Harbour Bills presently before the National Assembly this year.

Their expectation is that the legislators should concentrate efforts on the ones that address the absence of an independent regulator in the nation’s seaports instead of dissipating energy on all of them and end up not passing any of them before the end of the present legislative session. There is no doubt that the presence or absence of san independent regulator in the nation’s seaports, airports and international borders will shape how the sector will fare in 2014.

Policies and Programmes Implementation
That many programmes and policies in the maritime industry have suffered serious setbacks as result of outright none implementation or poor implementation over the years is an understatement. The situation has not only retarded Nigeria’s quest to be serious maritime nation but it has also made the huge potentials in the maritime industry to remain mere potentials.

Veteran master mariner and maritime expert, Captain Solomon Abiodun Omotesho said as far as he is concerned, there has been no consistency and stability in the implementation of maritime policies and programmes in the country. Omotesho who was one of those who made waves in the defunct national carrier, Nigerian National Shipping Line Limited (NNSL), lamented that when we set up a pattern to follow, someone else comes and terminates it.

The master mariner contended that if there is no consistency and stability in the policy formulation and implementation in the maritime industry, there would be no progress. He added his voice to the ongoing campaign that if the maritime sector of the economy is to move forward, there must be strict implementation in government policies and programmes.

Many have wondered why the authorities will bother to enact policies when they do not have the nerve to strictly implement them. Why put up a programme when you know you are not ready to execute it to the letter? It is a mere waste of time and scarce resources to continue enact policies when it lacks the political will to drive them to a logical conclusion by ensuring that they are strictly implemented no matter whose ox is gored.

Committees without Results
One area stakeholders have agreed must be adequately addressed in 2013 is the penchant for the Federal Ministry of Transport to set up committees upon committees without commensurate results of their terms of reference. At the last count, the Minister of Transport, Senator Idris Umar has set up not less than 10 committees since he was appointed as a member of the Federal Executive Council. These committees also have various sub-committees. No one was willing to make public the exact amount of money these committees have taken from the central till to execute their assignments. Nevertheless, THISDAY checks revealed that millions of naira were released to meet the travelling, hotels, feeding, stationeries, and other sundry needs of the various committees. In many cases, members of these committees travelled extensively within and outside the country, incurring huge expenses in the processes.

Those who spoke with our correspondent said they would have not bothered about the cost incurred by these committees as long as there are tangible results from the assignments given to them. Regrettably, in many cases, there are no tangible results. Reports are poorly written because some of the committee members lacked the requisite experience, exposure, and knowledge of the issues they are saddled with. Some committee members may not give total attention to the work of the committee because of their other engagements. Yet they will not decline the offer when they were appointed. In many cases, when reports are submitted, they are not implemented, making many to wonder why the committees were set up in the first place.

Thousands of reports and recommendations submitted by several committees are gathering dusts in shelves of top officials of the Federal Ministry of Transport without anybody bothering to take a look at them. This explains why stakeholders have opined that one of the ways to get results in the maritime sector of the economy in 2014 is for Umar to roll up his sleeves and implement the recommendations of the various committees that have been submitted to his predecessors, especially during the tenure of Alhaji Yusuf Suleiman instead of setting up new ones. It was also gathered that cases abound where Umar set up committees without making funds available to carry out their functions. In this case, these committees are made redundant from day one. Umar need not to be reminded that this is not the way to go if he is really desirous of making an impact and leaving a legacy in his tenure as Minister of Transport.

According to Captain Omotesho, all that we believe in is to set up committees and task forces on virtually everything in the sector without bothering to ask what he called “relevant critical questions” on what we really intend to achieve.
The master mariner expressed disgust that by the time members of the committees or taskforces submit their reports, events have overtaken it, and every committee wants to last long so that they can get the benefit of being a committee member.

That the maritime industry in Nigeria has made some gains over the years just as it has made some losses is indisputable. A typical example of where Nigeria has recorded significant gain in the maritime sector is capacity building, especially seafarer development. NSDAP which is under auspices of NIMASA has recorded made several strides as thousands of youths are being trained overseas on various courses that will enable them take up career as seafarers. Stakeholders in the maritime sector however wondered why as a country, we cannot consolidate on our areas of gains so as to minimise our losses. For instance, the Managing Director, Haulage and Logistics Limited, Major Henry Ajetunmobi (rtd) told our correspondent in Lagos that the maritime industry in year 2014 has been a year of gains and losses, pluses and minuses. He however averred that we need to do more to minimise our losses and consolidate on our gains.

Some stakeholders maintained that the acquisition of modern equipment has improved the cargo delivery system, pointing out that most of the quay aprons have been renovated and upgraded. Compared to previous years, there have been a lot of investments in the maritime industry.

The Registrar of Institute of Freight Forwarders of Nigeria (IFFN), Mr. Demola Irinyemi on his part stated that the Nigerian maritime sector has improved in the last few years. He however added that we need to do more in 2014 by consolidating on the gains we have already made so far.

His words: “I think we have really improved by my own assessments. This is also based on some of the reforms carried out and some of the policies implemented, as well as the good heart of the present leadership. But we need to do more. Otherwise, we will lose the gains we have already recorded. Most importantly, what I will like to add is that the politicians should allow the industry people, those at the helm of affairs of our different agencies particularly the maritime sector as well as other organizations to perform their statutory roles and responsibilities.

Stability and Professionalism
The absence of stability in the maritime industry besides the dearth of thoroughbred professionals has been the bane of the industry over the years. The instability in the system has made it impossible for thorough planning, let alone implementation. It is not true that the industry is bereft of professionals.

The missing link is that the few ones available are not given an opportunity to exhibit their knowledge and talent. Even where they are given a chance, they are not allowed to perform as the cartel that have straddled the industry over years in collaboration with those closed to the corridors of power have perfected ways to remove any helmsman who did not pander to their whims and caprices. This is the basic reason why helmsmen of key government parasatals in the Federal Ministry of Transport, particularly NPA and NIMASA always run from pillar to post to keep their jobs.

Analysts have averred that the maritime industry will not record any sustainable development if the helmsmen of the key parasatals in the industry are not given a free hand to carry out their statutory roles and responsibilities.

In the words of the Registrar of Institute of Freight Forwarders of Nigeria (IFFN), Mr. Demola Irinyemi: “They should be given the chance to work and they should be supported so that the maritime industry can move forward. Otherwise, we shall continue to be the butts of jokes in the comity of maritime nations. Another thing is that I want to commend the Council for the Regulation of Freight Forwarding in Nigeria (CRFFN) for what it is doing. It should work towards actualizing their desire to develop capacity in the maritime industry. I believe the industry has not done badly, but emphasis should be that professionals should be given room to carry out their duty so that we can move ahead”.

Finally, Industry operators are of the view that there was need for the Federal Government to do the right thing by putting the right policies and programmes in place and ensure their strict implementation if the expectations of stakeholders in the maritime industry would not be dashed in 2014. They contended that that if the industry is to experience any meaningful sustainable development in the years ahead, a professional must be appointed as the Minister of Transport.

They also maintained that the helmsmen of key parasatals in the ministry and the boards should be patriotic Nigerians, who mean well for the country and not those who want to use the position as an avenue to amass wealth for their future political ambitions.

They contended that key parasatals in the ministry, particularly NPA, NIMASA, Nigerian Shippers Council (NSC), and National Inland Waterways Authority (NIWA) must not be allowed to be a dumping ground for failed politicians. There was unanimity among stakeholders that the best way to move the sector forward is for the Federal Government to avoid appointing those who have vested interest into the boards of these parasatals.

In most cases, this is the root cause of the in-fighting and acrimony in the running of these government agencies over the years. At the end of the day, the maritime sector continues to suffer from bad leadership and inability to do the right thing because of pettiness and egocentric behaviour of those at the helm of affairs.

Captain Omotesho argued that this is the bane of the maritime sector of the economy over the years.  According to him, the greatest loser is the maritime industry and the citizenry who ought to benefit tremendously from it. You will agree with me that a rolling stone gathers no moss. It is therefore not surprising that we have not been able to attain our desires goals in the maritime industry. This is because we have not been able to get our priority right as a nation. As far as I am concern, we have not and the earlier we start the better for Nigeria and Nigerians.

Only time will tell whether the Federal Government, especially the bureaucrats in the Federal Ministry of Transport and the helmsmen in the parasatals have learn from the numerous mistakes in the past, particularly in the way the maritime sector fared in 2013 and resolved to make headway this year. Are they ready to do the right thing irrespective of their own personal interests? Are they ready to create a legacy for themselves? Are they ready to strictly implement programmes and policies without a consideration for primordial sentiments? The answers to these and many more questions lie in the bowel of time.


– John Iwori, This Day

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