NPA keys into diversification of the economy to engender more activities

As a slowdown in trade activities continues to eat deep into the revenue of the Nigerian maritime sector, Habib Abdullahi, managing director, Nigerian Ports Authority (NPA), speaks with BusinessDay’s acting editor, John Omachonu and Lolade Akinmurele on his plans to open up new sources of revenue generation, noting, “the maritime sector is dependent on the economic policy of the nation, which includes trade policies and other public policies. There must be an enabling environment for the sector to develop.” Excerpt:

In what way has the forex policy affected your operations?

We are very much aware that there are some challenges in the foreign exchange rates, which is related to the revenue of the nation, which is highly dependent on oil. The price of oil has come down and we are very much reliant on the world economy, dependent on world trade. All these have impacted our activities with a trickle-down effect on our revenue.

To what extent exactly has it affected your revenue compared with previous years?    

The year just started. Up till now the budget has not been approved. If you look at the number of goods and services that we have, you are likely to find that we are less by about 10 percent. I have the statistics. If you look at the statistics you’ll see there has been a negative impact on our revenue. There has been a decline of about 10 percent in our revenue compared with 2014.

What work is being done at the ports in order to engender more activities?

We have had to key into the current government’s drive, and that is diversification of the economy so that we are less dependent on oil. On our end, what we trying to do is to make sure we encourage exports. We have already written a letter to federal ministry of agriculture and the Nigerian export promotion council, to this effect. I’ll give you just one interesting example. There are quite a number of empty containers in the port. Why are they lying idle? Instead of taking them out empty, we can encourage people to export. People export yam and other agricultural products. If this is done, you can diversify the economy. We have quite a number of solid minerals as well, so we can diversify into agriculture or solid minerals and take advantage of the containers lying idle. This is one of the areas we think we can diversify and compensate the revenue we are losing.

How are you preparing the various terminals to accommodate larger quantity of exports?

The terminal operators are the ones who are involved in this. So we have to re-orient them. At the same time, we are also strategizing with the customs to see if we can make some terminals dedicated to exports. I have a meeting tomorrow with the comptroller-general of customs. Some of you may be aware that I was with him in Ikorodu last week. We were there, and if you go there the numbers of empty containers you’ll find there are huge. We are trying to see how we can make Ikorodu be an export carrier. We also have some interested parties coming in to help our dedicated cause.  For example, we have the Ilaje port in Ondo; they want to make the port dedicated to solid minerals. We want to have dedicated ports and other terminal ports exporting.

Talking of exploring new trade routes, we seem to be overusing the Lagos ports. What are you doing to resuscitate the dormant ports in the country in order to engender better flow of exports?

Interestingly, quite a number of people don’t understand our operations and our role in the maritime sector. I don’t tell you that when you are going to export or import that you must use a particular port. It is dependent on you, the exporter or importer. We are just landlords; all we need to do is provide the infrastructure for all the ports. It is then left to government and the terminal operators to encourage people to come and use them. It is funny that people prefer to use Lagos even when it is choked up. It’s left to you to investigate why people snub other ports for the Lagos ports.

You talked about developing infrastructure, what is the role of NPA in addressing the challenge of accessing some ports?

Again, I have to educate the public. It is not our responsibility to develop access routes into the ports. I wish it was, but it is not. It is the responsibility of the federal ministry of works and Lagos state also. It is also the responsibility of the local government. Last year, we spent about N500 million on this in order to play a corporate social responsibility. The only thing we can do is within the ports, and you can see that we are developing the infrastructure within the ports.

Can you share your thoughts on rail transportation in Nigeria?

It’s one of the key issues I forgot to mention earlier. If only the railway is working as it used to be, all these congestions on roads would have eased up. One of our mandates is to develop the rail, which we did. As at 2 years ago, the rail within the port was commissioned.  We are also developing infrastructure in Port Harcourt.

In fact, about 93 percent has been completed. This is our responsibility. Rail infrastructure within the ports is left to us, but outside the port is left for the Nigerian railway corporation. But there must be a definite policy. I was telling the US consular-general that when I was in secondary school in Kano, the rail line was just beside my school and we used to know the time for prep and other activities because of the rail. Every day, there are two trains from Lagos to Kano and Kano to Lagos. It baffles me, when somebody says that we have achieved something because there is one train plying this route per week.  I find it particularly amusing recollecting the fact that we celebrate a slump in trade activities between Lagos and Kano to twice a week from twice a day.

What is your administration doing to open up other sources of revenue inflow asides collecting rates from terminal operators?

Who told you that all the NPA does is collect rates? Even to collect those rates you are speaking of is very difficult, which is why we are owed a lot of money. Don’t forget that we have our own responsibilities, which we can’t go out of. Rent collection is not our only source of revenue; we have cargo, shipment and some other dues we collect. However, we are still working to open up other sources. There are so many challenges we face. We went from doing the business itself to being mere landlords, prompting the need to re-orient our staff to key into a different work ethic.

Recent events have continued to expose the inherent vices in agencies, which is masked with high operating costs; how is NPA being positioned to ensure efficiency?

We don’t collect subventions from government because we are a self-sustaining agency. We are even expected to give some money to government. If you ask the finance minister, she will tell you NPA is one of the agencies living up to expectations regarding revenue generation. For the first time, at the beginning of my administration in 2012, we remitted N15 billion, the highest ever. The highest before then was N2 billion. From that time till now, we have remitted roughly above N60 billion. We are relatively doing much better than other self-sustaining parastatals.

Another point that I find exciting to speak on is the fact that 75 percent of custom collection is from the maritime sector. When you talk about the maritime sector, people close their eyes and think that it’s only Nigerian Ports Authority.  If someone were to sit down and aggregate the revenue related to the maritime sector, they will find it’s a huge amount of money. People are prone to focus on the smaller aspects of the sector.

I agree we should do more, in terms of revenue generation, but the maritime sector doesn’t function on its own. It is dependent on the economic policy of the nation, which includes trade policies and other public policies. There must be an enabling environment for the sector to develop.

To what extent has the mandate you have to take up concessions affected your revenue generation profile?

It has affected it positively. Then we were operators and we also took care of the infrastructure. We spent a lot of money on infrastructure. The essence of the port reforms was to enable government and port operators become more efficient and we were assigned to take our form of responsibility. Port operators now have to go out to look for markets, and this has increased business activities. If you compare what we earned in 2006 to what we earned in 2015 you will notice the difference by over 100 percent. What we are collecting now is much more than what we collected then.