Our economic reforms are old-fashion
Our economic reforms are old-fashion
Chief Ernest Elochukwu, a former National President and later, Chairman Board of Trustees of the Association of Nigeria Licensed Customs Agents, ANLCA, needs no introduction.
Erudite, articulate, penetrating, frank, straightforward and unsparing in his political and economic analysis, he bestrides the ports industry like a colossus. Petit and characteristically punchy and fiery every time he engages in public discourse, officials prefer to avoid engaging him while opponents find it impossible to ignore his critical views.
In this chat EGUONO ODJEGBA, Elochukwu took a long look at our port practices and conclude government reforms in the maritime industry has failed to deliver on objectives. Excerpt:
Expectations that some of the critical negatives affecting our ports system will get resolved within reasonable time frame is becoming a mirage, ranging from failed port access roads to 24hrs ports operation executive order. How does make you feel?
Well if you ask me… this is just only a reflection of incompetence and retrogression as I would call it that is the hallmark of this nation called Nigeria, because first we talk about the Apapa port, the port was built long before independence in the 1940s. In other countries provisions are always made for expansion because proper planning, or in fact, planning at all will envisage that volume would be increasing periodically. And that also will increase the usage of the port facilities including the capacity of the access roads to contend with whatever activities are going on there. So avoiding system maintenance is part of our lack of planning which has always been our portion even from our origin. In other climes wherever there is any such challenge the first thing to do is to create an alternative.
As in create alternative ports?
Not necessarily that, as in backup strategies. It will not make sense if the whole ports of Apapa or Tin Can or wherever, is put out of use or in fact put out of partial use all because the access roads are to be rehabilitated, that is a wrong approach. There ought to be a kind of fall back situation, a kind of alternative should be in use while the port roads are repaired. I think that it is only in Nigeria for instance you find that when the second runway is going to be maintained the airport is closed for months while in other lands an available runaway is used while the second is been rehabilitated. Invariably one can say it is the hallmark of incompetence and our planlessness. Inevitably if these ports here (Lagos) will not be used, it will actually mean that cargo will be diverted to other ports. But if we are looking at creating alternative traffic for say ports of Calabar, Warri and all that, and even the old Port Harcourt seaport, I will say that it is neither there nor there because one….it will amount to disrupting peoples plan of business. Take for instance an importer that has planned to receive his cargo in Lagos and hence has shipped it to Apapa or Tin Can…telling him to go and receive it elsewhere is actually putting him in distress. So it is not just about the traffic it could create if the other ports are being used as alternative… already there is a problem it has created. And in all aggregate when we put these things together, they will impact on the overall economic performance of the ports which will still be negative.
Are you saying this will create additional conflicts on cargo clearance?
Oh yes, whichever alternative you apply will definitely create cost because if you go for an alternative port the cost of transporting the cargo from wherever location back to Lagos is a cost. And even if the cargo is been cleared here by any other magic which I haven’t seen, assuming we are talking about partial use of the roads while the rehabilitation is going on, it is still going to amount to additional cost, which again will impact on the final cost of the goods to the consumers. These are the ripple effects of poor planning on our system.
How did we get to this sorry state?
It is obvious; this is a country where we don’t pay attention to little details of productivity and the variables that account for it because…it is a place where people go to work without anybody bothering to know what they can produce at the end of the day. It is actually such that productivity index are actually nonexistent, here when you ask people…all they do know is that they go to work and probably do what is available. In other words they are not going to work with a target of what is to be done. In other progressive climes, everybody that goes to work have a target, here we don’t have a target…for most people they don’t even realize that this is system disruption; it’s actually going to have a big impact on the economy itself. These impacts also include delays and costs, and so if there are better planners, some of these things would have been taken into consideration at the onset to ensure that what they are going to do will have a minimal impact on the performance of the economy.
The presidency in 2017 and 2018 respectively issued both an Executive Order for 24hrs ports operation and later Ease of Doing Business. Can you match these interventions with realistic gains in the port sector?
Well your guess is as good as mine; in fact, I would have depended on your investigative report of what has been the outcome of those interventions. My take is that most of the times….without sounding disrespectful to anybody, I want to say that those in government believe they know it all and sometimes they go ahead to do their own things and at the end of the day put all of us back to square one. Yes it is a good thing that the Vice President who was Ag. President at the first instance of intervention recognized the fact that doing business in Nigeria is a nightmare both to the business person and even the interest of the nation that is supposed to be protected. It is just like the case of the reforms, first and foremost the idea of reforms presupposes that things are not going right; it means all is not well. Sadly, in the process of carrying out the reforms we now have a situation where we again use the same nonperforming agencies to be the drivers of the reforms and all we end up getting is cosmetics. Our government idea of reforms is pathetic, if you ask the officials on ports operations reform….you go to some of these agencies you see a lot of computers…the new song is that “we are computer or ICT literate/compliant”. To them, with increased computer awareness a reform has taken place…it is so sad. A reform should be thinking about the deliverables, in other words…what are we reforming? What are the specifics we want to achieve with the reforms? In the past for instance when government talked about 48hrs cargo clearance, it was something that was meant to sound good to the ears. As the President of ANLCA I was part of that reform, we asked some crucial questions that were not answered. For instance the impact of reform, is it the total number of hours that is going to take the cargo that have arrived the port to exit the port to the importers warehouse? Or is it 48hrs as in two days…we believe that the intention was for two days but then, at the end of the day, will the 48hrs delivery target been met, what have we been getting? By now we can’t get anything less than 3weeks. I am saying for every reason you put a process…a cargo to go by itself…the process should drive itself from the point of clearing it and coming out, it will take not less than 2 to 3 weeks.
Then, or now?
Now and because when we talk about reforms there are many things they don’t put into consideration. How have the process been streamlined? Any process that does not run seamlessly can never achieve that success of reform. The processes of clearing have not yet been put on its own to run, in other words, without been propelled, without interference.
Chief what are the defining instruments required for making the process seamless?
Oh very simple, first and foremost, indentifying the crucial processes, that is designing or apportioning reasonable time for those processes and then designing a system that will compel the process to be forward moving at all times…though it can also have a feedback mechanism but it will always be forward moving. Let me illustrate, for instance from the point of arrival of the cargo as a starting process to the point of its exit. If there are 10 stages for instance, it means the progressive system is such that should make stage 2 as a matter of necessity follow stage1. In other words once stage one rolls, it automatically triggers 2, 2 triggers 3 and in that order. And if for any reason there is a problem in any of the stages it should be able to immediately generate a feedback report and also have the means of carrying out immediate correction so that it starts moving again. The system must entails that by the time the person who is driving the process has finished stage 1, the person on stage 2 is already expecting output of stage 1, and if he does not get it should immediately ask what happened. This is system automation…so if the authority cannot talk to those who are experienced in these things, how can it be designed to achieve a success? It means we will still be running around in circle. Our system is such that the person in stage 5 can hold down the system (documents) for God knows when and nobody is asking questions.
I like to ask you this directly, the trouble with ports in the eastern operation, Delta, Calabar ports which are poorly unutilized…there have been several interpretations, political and administrative reasons have been adduced…I don’t get it, why are ports in certain locations ill functional and others grappling with pressure?
It is simply like what Emir of kano Lamido Sanusi said ‘grappling with vested interests’, and whenever there are vested interests in anything that is national business, it will always manifest. In the past…it is really sad as I said that ports that were built either with tax payers money or oil money could be allowed to lie waste and deteriorate. Yes we are dismayed, in the past like you rightly asked, while some ports are grappling with congestion, others are left for rats and reptiles to inhabit. You know it is not just about the Lagos ports and the others but it is also within the same location, like old Port Harcourt port and Onne port.
We saw Port Harcourt old port being neglected and allowed to die and the excuses that were given were lame, to my mind. For instance, some will tell you that the draught in some of the ports cannot take cargo vessels. It makes me wonder, the NPA have the duty, the responsibility, the obligation to dredge the channels and make every port navigable like is often done at the Lagos channels, why were they not done? During the concession we thought there would be a change but even after the concession, the situation persisted and some of us started wondering does it speak well of a government that collected so much money from investors…and those investors have on their own put in so much capital again to upgrade those ports and yet, after that they are still not receiving that patronage. For me, I think I have asked questions in several fora, the answers I get have not been making sense to me.
The fact is that the shipper who could answer for the importer, who determines where to land his goods, has been limited to just Lagos, in an emerging narrower national operational guidelines. In the past government businesses enjoyed better spread and operational chart that was more patriotic and profit driven. Take for instance the hey-days of our defunct national carrier. You sure remember our moribund national carrier…the government always ensured its business protection and issued a kind of incentives of cargo sharing….in other words a minimum of certain volume should go to so, so, so and so carrier, to ensure that the national fleet was kept busy. So why is it impossible to now give them directives that for you as a shipping line you must at least ship so, so volume to this one extra port to qualify to do business in Nigeria, it is a very simple thing. Those doing business with Nigeria ports are making profits, so you give them conditions to favour even development of our country’s facilities. But like said earlier, vested interests have made this impossible. It also brings to mind even the nature of concession that was done in Nigeria which to my mind and to a lot of minds…certainly was merely the change of the rent collector for government to private hands. In some of the ports the concessionaires have not added any value yet they are collecting taxes and rents which they are increasing as they like. Above all the concession was not conceived with patriotism because if that was the case, our government officials who supervised the concession should have studied other countries…how they did theirs. Angola for instance did the same thing, it did a lot of ground work for protection and development of local competitors and the local economy such that a foreign investor coming to Angola to be given a concession must of necessity, as a condition have a local partner.
The intention for making the foreign investors partner with a local player is to be able to transfer technology to continue later because no country can allow a foreign firm run its lucrative potential and repatriate profits without a plan to build local capacities. With such arrangements there are some standards to measure the technology transfer; thus the local organizations would not just be interested in collecting profits…but more concerned with operations.
Do shippers not have a say where their cargo is landed?
Definitely, they have a say but what I am trying to say is that the government have…call it the owner of the ports could as well give directives to the shipping lines that you must be calling this port as well as this. So this is about planning the port economy of the nation because what does it say that some ports are totally idle while some other ports are over active? So if we look at it from the point of shipping lines’ choice because from the onset it was not even the point of choice of ‘I am going to Calabar’ and the shipping line says it is Lagos he is going, I have no choice but to settle for Lagos.
There is ongoing war of attrition between the customs service and customs agents regarding allegations of sharp practices and extortion. Many customs agents I speak to make brilliant, legal accusations but none or their importers has ever stepped out to challenge alleged unacceptable cargo valuation by the customs, why the inertia?
Like I said I am much conversant with the system, I can’t say Nigerian importers are so innocent of certain infractions. But then the customs on their part are overdoing certain things, however the reason why the inertia as you called it is there is because…this has to do with our legal system, not just about import but generally speaking. Why people give up their rights, it is not because they don’t know their rights but the cost of claiming those rights have become enormous…because by the time they get these rights, it is no longer worth anything. When the importer for instance…because this is a very good case you raised…to be fair to all sides it means that when there is a dispute, it should halt demurrage pending the discharge of litigation, but not in the context of Nigeria system…even if the case get several adjournment and lasted 4 or 5yrs, by the time it is disposed of, let’s say in your favour, you still have to pay the accrued demurrages. And that same thing is what hinders port operations. Everyone like to say the agents is the cause of corruption in port clearance system… but that is like making the victim the villain…don’t give, let me see how your papers will move. When your documents don’t come out will you not go and find out? The official concerned will pretend to be very busy and be scurrying through files, without end. When you wait and wait, will your common sense not dictate that you do something, although he didn’t ask for it. So if after doing something and he immediately signs your papers, when you come next time, will you wait to be told to do something?