Mrs. Vivian Chimezie-Azubuike is the Director General of Nigerian Chamber of Shipping (NCS). In this exclusive interview with News Diet, Vivian speaks on several pertinent issues in the nation’s shipping sector.
One of your recent summits centered on barge operations highlighting issues from accidents to multiple taxation, among others. How would you rate barge operations in Nigeria from NCS point of view?
What informed our decision to hold the programme was to identify the critical issues limiting barge operations in Nigeria. When we talk about shipping, in every country where the sector thrives it is because the regulators, operators and other stakeholders got it right. You can’t have successful shipping without talking about multimodalism and this becomes very critical for Nigeria because the roads are bad. Most of the roads leading to ports are in a dilapidated state. This isn’t about Lagos ports alone; ports in Port Harcourt also have bad roads. Given the road infrastructure deficits, one viable alternative for evacuation of cargoes is barging.
Following the outbreak of the COVID-19 pandemic, lots of containers were stuck at the seaport terminals and several others lined up along the port corridors. Through barge operations these containers were evacuated and barging services continued to improve since that time. Ideally, barging should have been incorporated into the port plan from inception. It shouldn’t just be an option utilized as a result of challenges with other modes of transportation. Barging should be part of an efficient multimodal transport system in the country.
We also noticed that barge operations in Nigeria haven’t been harmonized and the incidences, multiple charges, among other problems underscore the need for better regulation. At one point we saw incidents of cargoes falling into water or barge accidents, it shows that what was on the mind of the importer or freight forwarder was to just get the goods out of the ports using the fastest means. However, there is a need to use the right crafts and standard barges. So, we need to get the whole process right and the regulatory bodies in-charge such as the National Inland Waterways Authority (NIWA), Nigerian Ports Authority (NPA), among others, have to harmonize their plans on how to make barge operations work efficiently.
There is a lot of excitement from the Barge Operators Association of Nigeria (BOAN) because they want to have their business environment sanitized and devoid of accidents. It is important for all stakeholders to collaborate and strategize to make Nigerian ports function better via barging. Port operations isn’t just about what happens at the ports; it also includes how goods come in and exit. There should be safe and navigable inland waterways with buoys installed and the right crafts utilized. Containers on barges should be well-latched and graded in the right stacks. Channels should also be properly dredged and the hydrographic charting sorted out to ensure barging is done in an ideal environment.
While Lagos ports are congested, Onne port activity is improving but seaports in other parts of the country remain grossly underutilized. How can the nation correct this imbalance?
One of the things we have to do is to ensure that those ports have the right facilities to handle vessels and cargoes. What is the draft of the other ports vis-a-vis the draft of the vessels they are expecting? Nigerians should understand that a port isn’t about a location but services and meeting needs. There should be ports for general cargoes, roro ports, containerized goods, reefer ports, liquid bulk, etc.
Specialized ports will make it easier to decide how we want to develop the nation’s ports. This will also ensure that we don’t focus port development in Lagos or Port Harcourt. The idea of establishing ports should take into consideration the settlement of the people, the predominant trade and volume of cargoes needed in the area. If we talk about developing Warri port, for instance, what kind of cargoes go there? This should inform our decisions on how to develop ports.
We should also understand that some of the Nigerian ports are obsolete and can’t be efficient in line with modern port operations. It is high-time the nation begins to reevaluate obsolete ports for restructuring.
Amid worries about obsolete Nigerian ports, Lekki Deep Seaport project holds immense promise, however, there are logistics concerns as the port has no rail connection. What’s NCS view on this issue as some stakeholders have warned that Lekki port access could be worse that the Apapa Port gridlock?
Lekki port should be Nigeria’s leading port modeled after the Port of Antwerp in Belgium, if the nation gets it right. There is a cluster of activities going to happen around that Lekki area which makes the deep seaport an interesting investment. The Dangote refinery, fertilizer facility, free trade zone, among others should be enough motivation to create a railway connection.
I recall attending a meeting on Lekki seaport development some years ago and at that time the draft was about 13meters. I observed at that meeting that we will only be replicating Apapa port if we couldn’t attain 16-17meters. Today, it’s about 16.5meters and it can take big vessels and Very Large Crude Carriers (VLCC) which makes economic sense.
Nevertheless, I don’t think we should repeat the mistakes of having a seaport that isn’t linked to railways. Even if we are restructuring the older ports, railway connection should also be prioritized.
The railway connection to Lekki seaport could be carried out by a seperate private sector investor so the cost doesn’t become an additional burden on the federal government. There could be an arrangement to achieve it but the contractual agreement should be clear so investors know how to recoup their funds.
Ship financing remains a major setback as indigenous ship-owners and other operators in the sector lack access cheap funding, yet, they are expected to compete globally with operators that can access single digit interest loans. How can Nigeria address the challenge?
The Cabotage Vessel Finance Fund (CVFF) was established with a view to ameliorate this problem. It is unfortunate that since the fund was established no operator has been able to access it. Ship owners should be allowed to access that fund because the monies have been accruing over the years. With the African Continental Free Trade Agreement (AfCFTA) coming up, it becomes pertinent that ship owners get the fund to acquire vessels.
There have also been recommendations in the industry for a Nigerian Maritime Bank. However, I have some reservations about this bank. Commercial banks, mortgage banks and other financial institutions get their licences from the Central Bank of Nigeria (CBN). What’s going to be the structure of the Maritime Bank? Is it also going to be regulated by CBN? How do we subscribe to an entity that we don’t know how it’s going to function?
It is important for us to properly evaluate what we want to introduce. I can’t subscribe to it now because I don’t understand how it would function. I also don’t think it is something the industry needs at the moment.
Other approaches could be utilized for ship financing via partnerships with international investors and equity can be shared with the investors. The African Import-Export (Afreximbank), other region and global institutions can also be approached for funding because shipping is an international business.
The 2022 World Maritime Day theme was: “New Technologies for Greener Shipping” highlighting the need to curb carbon emissions. New innovations in shipping would mean higher costs. What is the Chamber’s position on this issue?
Over time all maritime nations will buy into the emerging regulations with respect to cleaner fuels, low-sulphur fuels, hydrogen-powered vessels, among other innovations. These developments are being championed by the International Maritime Organization (IMO), so I’m sure that as a member of this organization, Nigeria has to comply.
However, the Chamber belongs to a group known as Transition Maritime and we are working with the International Chamber of Shipping (ICS) and the United Nations Global Compact. We know that as these technologies change, seafarers are going to handle them. Who is going to train these seafarers? Who is going to bear the costs?
As a maritime nation, Nigeria has to start preparing for these changes because they will definitely emerge. The technology is going to change the vessels and we need to start preparing and also preparing our seafarers for the new approaches. There hasn’t been a final decision on the energy source to be utilized but the industry is looking at the combustion level with a view to reducing gas emissions. The source of energy may also depend on the size of the ship.
You talked about AfCFTA earlier, but Africa doesn’t have ships to carry its goods under regional trade. There is the Sealink Project and other initiatives, but they are yet to yield tangible results. How would the shipping sector fare under AfCFTA?
Africa has to first realize that there major issues to fix in the region with respect to fleet acquisition. Until we realize this as a setback, we may not see the need to have an African fleet. We need to know that this is a major issue that could make or mar the regional trade goals that AfCFTA hopes to achieve. How do we handle the demands of AfCFTA for cargo distribution?
This idea of the AfCFTA was drawn from the European Union and they are really interested to see how Africa is going to handle it.
Thanks so much madam…..You were able to provide some significant insights and considerations on how to move the Nigerian Maritime industry to the level. I remember publishing an article in the Maritime Executive where I proposed the importance and the necessity of Governmental Will Power as one of the key solutions to the problems faced by the Nigerian Maritime sector. If the government is not ready to get 120% involved in the growth and the efficiency of our Maritime activities there will be no way out for projected Competitive Advantage on a global level.