Chief Afam Chukwuma is the Managing Director, International Supply Chain Systems Limited. He is also the Deputy National President, Seaports, National Association of Government Approved Freight Forwarders (NAGAFF). In this exclusive interview with News Diet magazine, Chukwuma analyses port business from the prism of a freight forwarder in 2024. He also bares his mind on the impending Shippers’ Council Port Economic Regulator, some issues with Nigeria Customs Service (NCS) and the Council for the Regulation of Freight Forwarding in Nigeria (CRFFN).
Excerpts:
As a freight forwarder, what is the significance of the Ministry of Marine and Blue Economy to your profession?
The creation of this new Ministry is a significant milestone for the Nigerian maritime industry. For years, we have faced challenges due to being under various ministries. At times, we were part of the Ministry of Transportation, and other times under the Ministry of Finance, Trade or even Aviation, leading to considerable confusion and disruptions. This made it difficult to have proper control and oversight.
With the Ministry of Marine and Blue Economy dedicated solely to the industry, there is clarity and we can address issues more effectively. It allows for a single Minister to oversee and report on the industry’s progress, providing clear direction and resolving longstanding issues.
How would you appraise the current state of the Nigerian maritime industry and what are your expectations from the Blue Economy Ministry?
The maritime industry has had its share of beautiful intentions from the government, often reflected in policies and official documents. However, the real challenge lies in the implementation of these policies.
We have seen some progress with private firms taking over certain operations of ports, but many issues remain.
For instance, before 2006, customs inspections were solely handled by customs officials. Now, we have private companies involved, which has improved processes to some extent. However, there are still gaps in efficiency and professionalism.
How would you rate the performance of private seaport terminal operators managing the nation’s ports at the moment?
Private companies have brought some improvements, but the overall expectation hasn’t been fully met. The major issue is the lack of accountability.
If a government official fails to do their job, there are often no consequences. This lack of sanctions means that inefficiencies and errors are likely to repeat.
To truly transform the industry, everyone must be held accountable, including government officials. Implementing strict sanctions for negligence and ineptitude is crucial.
Talking about changes in the industry; what are your views about the Nigerian Shippers’ Council becoming port economic regulator via the new bill?
Shippers’ Council becoming an economic regulator is a step in the right direction. Currently, they lack the legal authority to enforce regulations, which hampers their effectiveness. If granted the proper legal framework, they could ensure service providers and officials are held accountable for their actions.
This would address issues like excessive storage fees at ports, where inefficiencies lead to increased costs for shippers. With regulatory power, the Shippers’ Council could enforce fair practices and prevent unreasonable fee hikes.
Instability in foreign exchange rates have been one of the biggest challenge confronting freight forwarders in 2024. What solutions would you proffer?
The instability in foreign exchange rates is a significant issue. Customs only implement policies set by the Central Bank of Nigeria (CBN), including exchange rates for duty payments. Frequent changes in these rates create unpredictability for businesses.
To mitigate this, I suggest that customs request the government to stabilize the exchange rate for a set period, such as three years. This would allow businesses to plan and operate with a predictable cost structure, even if the rate is high. Stability is more critical than the rate itself, as it enables better financial planning and reduces the risk of sudden losses.
What changes have the new Nigerian Customs Service Act introduced in cargo clearance and shipping operations?
The Nigerian Customs Service has made significant strides in modernizing their processes. They have moved from manual operations to digital systems, improving efficiency. However, frequent server failures have slowed down business operations at the ports.
While we commend their progress in digitization, addressing these technical issues is essential. Ensuring reliable IT systems will further enhance the ease of doing business and facilitate faster cargo clearance.
Specifically, the new Customs Act has only been in place for some months and it is too soon to observe any significant changes in operations.
The Council for the Regulation of Freight Forwarding in Nigeria (CRFFN) is tasked with enshrining professionalism in the nation. Has the Council been fulfilling this mandate?
CRFFN has potentials to set standards and approve mandatory trainings for freight forwarding professionals; but the agency needs to do more. They were established to regulate and professionalize the freight forwarding industry. However, they face challenges, such as lack of enforcement, financial constraints, inadequate stakeholders’ engagement and sensitization.
The Council must push for greater authority and resources to effectively regulate the freight forwarding industry. They should also focus on eliminating unqualified practitioners, ensuring that only trained and certified professionals handle freight forwarding business. This would enhance the industry’s credibility and efficiency.
Any final thoughts or recommendations for the industry?
The key to improving the nation’s maritime industry lies in accountability and stability. Implementing sanctions for negligence, stabilizing exchange rates, and empowering regulatory bodies like the Shippers’ Council and CRFFN will drive positive change.
With these measures, we can create a more efficient, reliable and competent maritime sector in Nigeria.