There’s a future for the transport sector in Nigeria in 2017-CILT


Mr. Paul Ndibe is the National Director, Chartered Institute of Logistics and Transport Nigeria. In this interview with our correspondent in Lagos Tuesday, he assessed the performance of the Nigerian maritime industry in the outgone year of 2016, expressing a strong confidence that the transport industry will take a pride of place in the affairs of the Federal Government in 2017. He also spoke on many issues bothering on the activities of the Nigerian Shippers’ Council and other government agencies towards giving a hub status to the Nigerian port industry. Excerpts;

What is your assessment of the transport industry in the last one year Sir?

You know the industry is a fluid one given that all the players and actors are not at the same operating environment. For organizations that are government owned that are also in the industry, they were also affected by policy changes and the new policy focus of the government. That affected the economic situation in the country and also it affected in some ways, the performances of this sector.

Down the line to the private sector, not all of them performed evenly on account of the level of their network and in a competitive business environment they were operating. On account of that, I will say that 2016 was a bit challenging for most organizations in the logistics and transport sector. It was reported in some papers that some even had to relocate to other countries where the operating environment appeared a bit more conducive for them to operate. We will also consider the fact that exchange rate was also an issue in the country which I don’t think had been resolved; repatriation of fund was also another issue and also the level of liquidity in the economy was the third factor and you know, logistics and transport being a service sector, the issue of liquidity, once there are distortions in the level of liquidity, will actually affect the service sector and being that logistics and transport happened to be in that sector it will also affect their level of operation.

So, I will say that 2016 was challenging and a lot of companies would have weighed themselves and be able to re-strategize in order to see if they would perform better in 2017.

Looking at the 2016 Sir, could you point at any particular area you believed government could focus its attention to but failed to do so that affected the industry negatively?

Yes, in one way, government came to office and met some challenges and liquidity was one of the problems they met and also for the progammes they wanted to implement, there was not enough fund to implement, Foreign Direct Investment was scarce, government had a lot to do and then the issue of recession affected the government’s decision on some of these issues. So, it is a general thing, just the way it affected government’s programmes, it also affected the programmes of those of us in the private sector…

Sir the question is, was there any particular area you expected the government to focus attention to in the last one year which it failed to do that had a negative impact on the sector?

Well, in a sense, yes! Government would have looked at how the private sector would have fared in terms of its policy implementation. For example, the Foreign Exchange rate, one would have expected that the government would have taken a step further by looking at the impact it would have on the private sector because for some government’s programme, there was access to foreign exchange on the government rate but for some private sector operators, it has to be on a floating rate. So, to that extent, there appeared not to have been an equal playing ground for all operators. To that, extent, it impacted negatively on some operators in the transport industry. The point here is that if government had taken a step further, they would have evaluated it in the first instance to see if there would be a uniform rate in other to mitigate the negative effect it will have on the private sector in industry as opposed to the effect it will have on the other operators also in the same market.

We are now in the New Year, if you are to set agenda for the government for the transport industry this year, what would the agenda be?

Government has started well by looking at the laws; there was a public hearing on the National Transport Policy Bill late last year and it was all geared towards this year and this year, there was one on warehousing but on commodities. So, lately, the government is weighing towards transportation with emphasis on the railway, aviation and with expected improvement on the maritime sector. Nobody is discussing road and the road contribution to the growth of the GDP is about 97%, if we go with that statistics, government service should also have something to do on the road component, if not at all, there should be some level of control, there should be some level of regulation, there should be some level of licensing to the operators in the road sector.

See what government had done in the maritime, the economic regulation of the maritime industry was ceded to the Nigerian Shippers’ Council, what of the roads? Because it not just one operator, it is not one segment, you have the passenger, you have the freight and of then freight, you have the international freight and you have the local freight. So, had government thought about this, they would have segregated them so as to see if there could be a control mechanism for the operators in this sector. Who are these operators? Do they have the knowledge base for that sector? Are they offering the best services to the customers? So, these are the challenges, my thinking is that as the government is thinking through the National Transport Policy, it is expected that they will look at the bill of the CILT that is before the National Assembly and see if the CILT bill could help the government in this direction. This CILT bill as being proposed will license and then classify operators. Who are the operators in this sector? Do you have the knowledge base? Are you expected to operate in this sector? If you don’t have the knowledge base, it means you may not be able to offer a professional service, therefore, the body that will regulate their members or professionals in this sector should take a prime position and this will eliminate to some point the burden of the government and that will improve the logistics network and help the economy to grow.

You are saying that with what is on ground now, there is a future for the transport sector in the country this year?

Certainly, with the improvement we are seeing in the National Transport Policy and with the re-investment culture in the rail and also the proposal for the national carrier for Nigeria, it means government is looking at the transport and logistics sector.

The Nigerian Shippers’ Council had said that it had commissioned a law firm to study all the laws relating to transport system in the country with a view to codifying a legal instrument for the regulation of the inland transport. How do you react to this news?

The issue of inland container depot had been on for a long a while. It is good news that the Nigerian Shippers’ Council is pushing that the concessionaires who were expected to develop these inland containers depots must develop them within a time frame or lose the license to do so. May be that had influenced the new things we are seeing in terms of investments going in that direction and some of them are returning to sites developing these inland containers. I expect that for purposes of inland transportation, what are the linkages to these ICDs? If the major linkage is rail, there should be a coordination of efforts so that while they are developing the inland container depots, there should be a rail linkage to these ICDs so that by the time the development of the activities at the inland container depots are being completed, the rail connections are also being completed. That is on the one side.

On the other side, there should be a synergy between the Nigerian Shippers’ Council and the Nigerian Railway Corporation to facilitate this project and also a synergy between the Nigerian Shippers’ Council and the Nigerian Railway Corporation and the federal government on the other level to see that the rail connections that lead to the ports are free and open so that when the imports come, I mean containers or crude, they will have free access to these depots where the clearing will take place and in that case, the dwell time of ships, the transaction time for containers will reduce at the ports and then that will improve the logistics performance index of the country. That is on one level.

On the other level, if this fails to happen, it means the dependence will be more on the road. Now, what is the nature of the road network? How reinforced are these roads to these inland containers depots given that there will be additional traffic on those roads on account of the existence of these inland containers depots. What is the level of interaction between the Nigerian Shippers’ Council and the Ministry of Works in order to see that those roads are reinforced? So that we don’t have containers stranded on the road on account damage done on the road. What is the Nigerian Shippers’ Council doing in terms of Truck Transit Parks or depot? And then what is the regulation for the drivers’ driving period and the nature of the trucks that will carry these containers to the depot? If what they are doing will relate to all these concerns raised above, fine, I will say it is a step in the right direction. But if they are looking at the linkages without having direct communications with all the agencies that will facilitate the project, then there might be a problem.

Some African countries had been jostling to use the Nigerian Ports as transit port for cargoes destined for their countries. We know that before now, countries like Niger and Chad had been using our ports as transit port but for some reasons, they stopped. Now that effort is on to bring back these countries to our ports, do Nigeria has the entire infrastructure in place to accommodate this arrangement?

If the current tonnage in terms of import to our port have the content of these countries you have mentioned, there will not be a problem. If they are going to be an addition to our current tonnage in terms of import, then what we need to do is to restructure developments around our ports. What I mean by this is, look at the ports, they are under terminal operators, although it is the importer that choses the port he wants his cargo to go, but would government have some level of control over the operators of some these private terminals? I don’t think so. Therefore, if some people are coming from a particular country, let us say Chad and they have chosen a particular port of destination, it is expected that the government would be able to influence the activities involving the port in terms of easy of movement of these goods from the point of loading up to the final destination.

Are they looking at the railways? Are they looking at the roads? Are they looking at the ports, creating space to accommodate the ships that will bring in these goods for those countries? So, if there is an arrangement with some terminal that they bring in a particular import, at a particular time, through a particular shipping company, then that will be a seamless operation. So, what I am saying in effect is that, in reaching an agreement with those countries for Nigeria to act as a transit port, the terminal operators of the designated ports must be involved, Nigerian Pots Authority must be involved, Nigerian Shippers’ Council must be involved, the customs and other agencies so that as these goods are coming, they would be given a free hand for these commodities to be discharged. That is on the one level.

On the other level, I am aware that NPA and other agencies are investing towards improving the road network to the ports and also streamlining operations with the various ports, in that case, the duration between the gate and the ship will reduce. If they are able to streamline that arrangement, it means there will be a higher turnover rate and that would help reduce the dwell time of cargo at the port. And finally, government should look more towards the rail because we are moving between 2, 000 to 3, 000 containers within one week and it means we need up to 3, 000 trailers at the port, what is the percentage of these trailers that will breakdown within the ports and create chaos and disruption to other operators? We need to look at that direction. Then if it is the rail that will give support to that, at what point will the trains start picking these commodities if they cannot get to actual port of destination?

So, there should be an arrangement for freighting these containers from a particular port to a particular rail head where the trains can pick it up. Assuming it is Tincan and the railway cannot get to Tincan, there should be an arrangement of a short call with trailers so that the railway can now continue. But this is an arrangement that can be made with all the parties that are involved. They should sit down and look at it as a project.

Do you see delay as a factor in this whole arrangement?

There won’t be delay if all the parties involved are in discussion and it is equitably distributed in terms of responsibility, in terms of revenue attributable to the cost they will incur, there won’t be a problem because all of them in business and they are to survive, therefore, their level of responsibility should march their level of cost and also the revenue derivable from the services they will render.

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