A Review of the Nigerian Energy Industry

Tasks before Buhari in shipping sector

17 April 2015, Lagos – The maritime industry is one area the incoming administration  cannot  afford to ignore. Many may say the maritime industry does not warrant any serious attention because   the oil and gas industry still remains the mainstay of the nation’s economy. However, with the slump in the price of crude oil at the international market, the income accruing from the black gold since last year has been on the decline. That is why most stakeholders within and outside the maritime industry have called for a special attention on the sector so that it can yield the desired benefits for Nigerians.

ship-3Therefore, Buhari must pay special attention to the maritime industry. His government must do everything possible to harness the huge potential in the sector. According a Lagos based lawyer and former President of the Nigerian Bar Association (NBA), Mr. Olisa Agbakoba, Nigeria can earn as much as N7 trillion annually, if she harness the enormous potential in the maritime industry. If Buhari want to make a head way in the maritime industry, he should not discard what is described in some quarters as the “respected and authoritative voices” in the shipping sector of the economy. For instance, Agbakoba made it clear in his letter  Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala  that the federal government  should harness the potential  of the maritime industry in the face of dwindling oil revenue. While it may not be possible to consider every Tom, Dick and Harry’s  views on the maritime industry, those that matters such as Agbakoba should be worth considering by Buhari. There is no doubt that this one of the ways he can  quickly make a head way in his administration in the months ahead.

Pending bills

One area Buhari needs to consider in his administration is the numerous pending bills on various aspects of the maritime industry presently before the National Assembly. Some of these pending bills have been presented to the legislators right from the inception of the current assembly. Some of them were carried over from the last legislative assembly due to the fact that they could not be passed into law and yet they may not see the light of the day in the present legislative assembly. The bills, which are  at various stages of passage at the lower and upper chambers of the legislative arm of government,  include the Port and Harbour bill, National Transport Commission, the Roads Authority bill, Railway bill and Inland water ways bills. Others are the Federal Competition and Consumer Protection bill.
Not a few stakeholders have advocat ed the immediate passage of these bills into law to enable inves tors take advantage of the huge potential in the maritime industry. They were unanimous in their verdict that the maritime industry has enormous potential.  If liberalized, according to them, investors could have confidence to participate in it with multiplier effects in employment generation and general growth in the economy.

This is why Buhari must do everything possible by galvanising the members of the National Assembly to ensure that all the pending bills presently before them are pass into law before the life of the present seventh assembly ends in June 2015. And the former military ruler can do it. He has the goodwill. He has what it takes to bring all the lawmakers from different party lines to the round table. This is very vital due to the fact some of the bills are yet to be passed into law because the legislators in the House of Representatives and the Senate are not the same page on their provisions. There are several contending interest in the passage of these bills. Buhari can break the logjam by ensuring that these lawmakers shelve their personal interests for national interests  and pass  all these pending bills into law before it is too late to do so.

Transport Reforms

The reforms in the transport sector are concomitant to the revolution envisage in the maritime industry. This is due to  the fact that there is a nexus between a vibrant and efficient port system and good road network. Goods for export need to be taken to the seaports, airports and land borders efficiently. Prompt carriage of goods by land, air and water is paramount to good business. This will be a mirage if there are no good road networks. This is also applicable to goods imported into the country. Port users, especially importers and freight forwarders,  need good roads to ensure that their consignments get to their destinations as scheduled. The present poor state of port access roads across the country need to be addressed. The incoming government of Buhari needs to give it immediate attention. Already, the Director General of the Bureau of Public Enterprises (BPE), Mr. Benjamin Ezra Dikki, has added his voice to the need to have transport reforms.

While arguing that the recent transmission of the eight reform bills by the Federal Executive Council (FEC) to the Na tional Assembly, he expressed hope that the bills would be passed within this legis lative year. He noted that the transport sector was another area that has huge potential for the Nigerian economy.

According to the BPE boss, when the reform bills are passed into law, they would open up investments in road transport, inland waterways and railways. Presently Nigeria has 193,000 kilometres of federal roads, which would be broken into concession lots. When these bills are passed, the roads will be concessioned and their maintenance done by concessionaires as against the present practice of depending on the annual fed eral budget.

He noted  that an inefficient trans port delivery system in the country at present adds to cost of doing business in Nigeria.

“When these bills are passed, there will be massive investments in the sector. Now that the bills are with the National Assembly, I believe they would be passed before the tenure of the seventh National Assembly expires in June 2015. I appeal to investors to take advan tage of the opportunity and come forward to invest in the sector”, Dikki said.

He added that all the re forms carried out by BPE such as in tele communications, power and pensions have been remarkable and have impacted positively on the Nigerian economy.

“Recall that before the reforms in telecommunications, Nigeria had 450,000 fixed lines but at present  there are 135 million GSM lines. An investment of about $235 billion is planned by investors to keep pace with the evolving technology in the sector. For pension reform, life has now become easier for pensioners in Nigeria. About N4 trillion pension funds enable banks to give long-term loans. For power, Nigerians are experiencing stable power supply while the generation companies have so far invested N200- N300 billion to upgrade in frastructure”, Dikki said.
Blue Print

Another ill  that is plaguing the maritime industry is the absence of a master plan or blue print for its sustainable development irrespective of who is in the saddle at any given time. In some cases, where there is a clear roadmap, laid out policies and programmes outlined to attain set goals and objectives often suffer poor implementation or outright neglect. The incoming government of Buhari should come out with a blue print for all sectors of the economy that will enhance the living standard of Nigerians, ensure acceleration of reforms in the oil and gas industry in order to attract more investments in both the upstream and downstream segments of the sector. Stakeholders who spoke to THISDAY also enjoined the retired general to wage what they called “sustainable war” on corruption in all facets of the economy.

President, Lagos Chamber of Commerce and Industry, LCCI, Alhaji Remi Bello said: “The incoming government should ensure acceleration of reforms in the oil and gas sector in order to attract more private investments in both the upstream and downstream segments of the sector. The chamber urges the incoming administration to address the fundamentals of the high cost of doing business and low productivity. Ensure a level playing field for all investors across all sectors with regard to import tariffs, funding opportunities, tax incentives.”

On his part, former Director General, National Directorate of Employment and immediate past President of National Association of Small Scale Industry (NASSI), Chief Chuku Wachuku, said: “The new President must partner with the broader organised private sector and not select five per cent which cannot create the impetus for growth.”

According to the founder of the National Association of Government Approved Freight Forwarders (NAGAFF), Chief Boniface Aniebonam, “The emphasis right now should be sustainable attack on the issues of corruption in the maritime industry”.

Buhari, according to the Managing Director, Verdant Zeal, Mr. Tunji Olugbodi, should introduce policies. He argued that the implementation of these policies would not only guarantee a change but also ensure what they called “a more pragmatic” approach the issues of good governance in the short, medium and long terms.
Implementation of Reports
Over the years, the maritime industry has been saturated with several reports. These reports were written in response to several committees set up by the federal government at various times. While some of the reports were written as resolutions of several committees set by the Jonathan’s administration, so many others were written by others set up by Jonathan’s predecessors, particularly Chief Olusegun Obasanjo, who held of reins of administration for eight  years.  The expectation of stakeholders in the maritime industry is that these reports,which are already gathering layers of dust in the drawers and cabinets of top government officials, should be looked into by the incoming Buhari administration with a view to implement them for the benefit of the citizenry.

Apparently miffed by these numerous reports that have not seen the light of the day, the National President, Association of Nigerian Licensed Customs Agents (ANLCA), Olayiwola Shittu said: “All the reports of all the committees that have been piling dust, whether seen or unseen but without any action taking place should be looked into. It is not a matter of setting up further committees but the incoming government should look at these previous committees’ reports.”

Shittu, who is also the Managing Director and Chief Executive Officer (CEO), Skellas Limited, also expressed hope that the Buhari administration would review the implementation of the controversial national automotive policy, which members of ANLCA kicked against its implementation from the time it was made public by the Jopnathan’s administration.

There are fears in certain quarters that the huge sum of money and time spent in the constitution of these committees would go down the drains if they are not implemented by the incoming administration. In some cases, members of these committees sat for months, lodged in choice hotels, collect huge sitting allowances, travelled within and outside the country at the tax payers’ expense. It will therefore amount to a disservice to the nation if these committees’ reports are not implemented by Buhari.

More than anything else, the incoming administration should remain focus on the key issues that will drive the maritime. This is because there are several contending interests among stakeholders in the maritime interest. These interests will often play themselves out in the support or opposition to several issues that will be at play as the weeks and months ahead. For instance, members of the Association of Truck Owners (AMATO) are opposed to the policy on the age of trucks used in conveying goods in and out of the terminals just as the shipping companies are not receptive to the provision of space for empty containers. They prefer the use of the port access roads as warehouses pending when they are ready to refund importers containers deposit.

There is no doubt that the use of the roads as parking lot instead of holding bay contribute in no small measure in the fast deterioration of the roads leading into the nation’s seaports, especially the ones in Nigeria’s premier port, Apapa. The incoming administration must therefore have the nerve to meander through the intricacies in the maritime industry and put its foot down and take the right decision, ensure its strict implementation no matter whose ox is gored. Many believe that this is the crux of the matter will confront the incoming Buhari administrations in the months ahead. Will Buhari bring the desired change in the maritime industry as he promised during his electioneering campaign? Will he live up to expectations or dash the hope of those who clamoured for his election? The answers to these and many more questions are what stakeholders  are waiting  for.


– John Iwori, This Day

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