Posted by News Express | 24 November 2018 | 3,071 times
Managing Director of the Nigerian Ports Authority (NPA), Hadiza Bala Usman, has given reasons why promoting transparency at the nation’s ports has become inevitable as a way of attracting and growing business in that sector.
She also revealed how the NPA under her leadership has latched on to this strategy to record tremendous achievements in its operations.
In a speech she delivered at the Sixth Anniversary Lecture of News Express on Tuesday, November 20, 2018, titled, “Transparency: Bedrock of Sustainable Development with my experience at the Nigerian Ports Authority,” the NPA MD said since the maritime industry is an intensely competitive one where stakeholders have the liberty of choice and the discretion to review those choices as often as they will, any nation desiring increased market share at the ports, must be open in their practices and engender confidence, retain old patronage and gain more trust with the intent of increasing market share.
According to her, this is more so in Nigeria where the maritime sector is a significant contributor to national growth with yet untapped potentials to do more.
“For most countries, developed and developing ones alike, income from port operations represent an enormous revenue line, the sort of which funds significant capital projects and social security systems,” she said, adding: “Singapore’s maritime industry, as an example, contributes about 7 per cent to the country’s $300 billion Gross Domestic Product (GDP). Nigeria should aspire for as much and even greater and a lot of this has to do with how much of integrity we are able to bring into our practices.”
Explaining how the NPA leveraged the strategy to grow business, Hadiza Bala Usman noted: “The first symbolic step that we took at the NPA was to open our budget to the public with the signing of a Memorandum of Understanding with BUDGIT Open Budget System Platform and Implementation of a Public Data Dissemination programme. We felt and still feel that giving the people we serve the opportunity to have a glance at our revenue and expenditure plans would to some extent increase the level of confidence in port operations and we are happy to report positive results.
“We also observed that tariffs of ports all over Africa were not open for customers to access and know how much they will pay for services. In Nigerian Ports Authority we have changed that and our tariffs are accessible anywhere in the world because it has been published on our website. We have also directed all terminal operators to do the same. The effect of this that we have been able to cut off all manner of under-the-table costs that port users have been subjected to in the past.
“Tied to this was instilling transparency in our internal processes of revenue collection and remittance, which necessitated the deployment of the Revenue and Invoice Management System (RIMS). The RIMS is a web-based billing and revenue collection application which has fully automated the entire billing cycle of the NPA from invoice generation, payments, and maintenance of books. This has made it difficult for vested interests to cook the books.”
Continuing, she said: “The next order of business was to plug avenues of income leakages to enable NPA shore up its revenues and contribute more significantly to the Nigerian economy. So we set out to implement the Treasury Single Account (TSA) policy of the federal government of Nigeria to the letter. This inevitably involved stepping on a lot of big toes. A case in point was in the Boat Pilotage Agreement between the NPA and a private sector operator that involved revenue – sharing arrangement that was not just disproportionately skewed against the government but also placed government’s access to its own share at the whims and caprices of that operator.
“We initiated action to compel compliance, and the company fought back with a lot of scare tactics, including blackmail, character assassination, threats and intimidation all in a bid to get us to back down, but imbued by a patriotic zeal to do things right, we stood our grounds and insisted on probity and prevailed in the end. At the end of the first full year of our management in 2017, the NPA generated revenue of N299.56bn up from the sum of N162.20bn in 2016, an increase of about 84.65 per cent.
“There was the compelling need to create equal opportunity for all players in the maritime sector by bursting monopoly. We met a situation on the ground where a particular interest monopolised oil and gas consignments, by crowding out other players to the detriment of not just the maritime sector but the larger economy. We moved against this anomaly and opened up space for other players.
“This move has resulted in significant cost savings for operators in the oil and gas sector, with Shell Petroleum Development Company reporting one billion dollars saving in operational costs from one of their Oil Mining Leases (OML). Other oil companies have also recorded significant cost savings in their operations because no one was compelled to use one port. These savings have enabled oil companies to do business more profitable than was the case in the past.
“Secondly, this move culminated in the historic berthing of the Egina Floating, Production, Storage, Offloading (FPSO) vessel on Nigerian territorial waters.
“The $3.3 billion (FPSO) which will service the 200,000 barrels per day Egina oilfield has opened new vistas for investments into Nigeria from all over the world. According to stakeholders, the fabrication and integration of the Egina FPSO in Nigeria was the first time such complex tasks were executed in Africa as there is no other FPSO integration yard elsewhere in the continent. The Nigerian Content Development and Monitoring Board (NCDMB) had said new deepwater projects in Nigeria must set new records beyond the in-country integration of FPSO vessels, and this is expected to make the country a hub for industrial technological development with its attendant socio-economic benefits.
“Assuring sustainability of the improvements we have been able to achieve also required a closer look at our Joint Venture (JV) partnerships, most of which were discovered to be disproportionally skewed against the Nigerian people. We identified a lot of corrupt practices that were attributable to some of these contractual obligations. We are working at reviewing some of these agreements and have indeed in conjunction with relevant agencies terminated some of them.
“Also, as a way of contributing to the Economic Recovery and Growth Plan (ERGP) of the federal government, we were quick to respond to the executive order on ease of doing business by implementing the single interface point for the examination of all cargoes. This is to speed up the transaction turnaround time at our ports, which has the effect of making our ports more efficient and thus attractive for business.”
The NPA MD noted, who was represented by the Authority’s AGM Servicom, Chief Patrick Ihekuna, was not yet done. According to her, “The need to make our ports globally competitive also meant we had to key into the ongoing global discourse on trade facilitation which is focused on promoting seamless connectivity between the ports and hinterlands. To this end, we are exploring synergies to get all our ports linked by rail lines for easy evacuation of cargo. We are also leading the conversation to encourage the transportation of liquid bulk through the pipelines to minimise the vehicular traffic around the ports. We are aggressively positioning the eastern ports for greater vessel traffic with the construction of navigational aids and championing the discussion to encourage our stakeholders to make use of flat bottom vessels (FBVs) since FBVs have the advantage of navigating even in shallow waters.
“This eases the concentration problem around the Lagos port areas, as consignment bound for the Northeastern part of Nigeria, for instance, will find it more cost effective to berth in the eastern ports than Lagos.
“We are also very close to getting ISO 9001 certification for our ports. ISO 9001 is a quality assurance mechanism focused on meeting customer expectations and delivering customer satisfaction. It essentially ensures customer service excellence.
“ISO 9001 evaluates whether your Quality Management System (QMS) is appropriate and effective while forcing you to identify and implement improvements. Continuous improvement assures your customers benefit by receiving products/services that meet their requirement, and that you deliver consistent performance. Internally, the organization will profit from increased job satisfaction, improved morale, and improved operational results (reduced scrap and increased efficiency).”
“In all of these, however, we recognise the importance of our people-the human resource at the NPA. We are aware that no matter what we do, it would be impossible to effect positive change if we do not pay attention to the welfare of staff. We have embarked on what is arguably the most comprehensive condition of service review in the country’s public service. What we found was a very awkward situation in which people’s remunerations actually reduced when they got promoted, so no one wanted to be elevated and people were happy with monies that came in from solicitations and gratuitous offerings from compromises. To improve the level of transparency and efficiency that must change. And we achieved this in addition to setting up a performance-based management system. Apart from the condition of service, the reform has taken care of superannuation, so that our personnel do not; out of fear for life post-retirement subject our processes to manipulations that may jeopardise all other efforts.
“Of course a necessary prerequisite for this is providing leadership. That is transformational leadership. People look to see the direction of the leader literally doing little things like taking a lead on the job and doing the exact things that you ask of your colleagues. We do our best not to just take the lead and lift more weight possibly than any other person but to also ensure that processes are not compromised for any reason. I arrive at work earlier than most people here; I am on my desk by eight O’clock and have insisted that people follow our laid-down regulations no matter who they are.
“It would, of course, be deceptive to suggest that we have done all that we should do for this is impossible. It is impossible, not just because the building of sustainable institutions is a long-term venture, which the present can only muster the courage to start and provide a structure for continuity. It is also impossible because the NPA is only one of the several other stakeholders involved in this process,” she added.
Highlighting other areas of action, Ms. Usman said: “One of the most important things we need to do for instance is the establishment National Single Window, Ports Community System and Scanning services, all aimed at simplifying and harmonizing formalities, procedures and the related exchange of information and documents between the various partakers in the port operations value chain.
“We hope to deploy this in conjunction with the Nigerian Customs Service and think that would fundamentally change our operations as there will be less interaction with agencies of government and there will be less human intervention. Human interactions create avenues for patronage and rent-seeking, but this sort of IT infrastructure removes all such manipulative temptations as much as it speeds up the process of cargo clearance.
“There is still a lot of work to do but we have achieved quite some milestones in our bid to position our ports for greater efficiency, accountability and safety. These are the essential factors that determine the prospects of ports to garner market share. Added to that, of course, is the number of ports that the country has and its population. This is one of the reasons we are committed to increasing the potentials of the ports in Calabar, Warri, Port Harcourt and Onne for better performance and I am glad that we are getting results.
“For the first three months this year, the Calabar Port generated an unprecedented N3bn, we are working to ensure that all our ports are functional through the dredging of the channels into the ports so as to attain the required draught level even as we are encouraging shipping companies to deploy flat bottom vessel in the interim.
“The result is that in spite of the enormity of the task ahead, our modest achievements are working for the restoration of investors’ confidence in the port industry. For example, China Harbour Engineering Company has taken up the balance of NPA equity in the Lekki Deep Seaport Project and the Tanger Med of Morocco indicating the willingness to develop a greenfield terminal logistic base,” Hadiza Bala Usman explained.
“Distinguished Ladies and gentlemen, there are, without doubt, endless possibilities for the maritime industry to contribute to the development of Nigeria. And attaining that is dependent on how much we are able to convince the world that we are ready to effect a change through a decisiveness that is firm and forthright enough to translate goals into concrete behaviours. We are committed to doing our part while we have the opportunity and be able to leave a road mark as evident in the 25-year port development plan that we are currently working on.
“We want to bequeath a motivated workforce that can match their counterparts in most developed countries, achieve the desired level of operational efficiency expected from the largest growing economy in the world, set the pace for the development of a competitive port industry that will serve as a hub in the West and Central Africa with the consciousness that all of these would be inspired by a transparent and seamless system which will ensure that the country’s resources do not get frittered away and that Nigerians have the benefit of national endowment,” she declared.
Thanking publishers of News Express for the unique privilege of addressing the sixth anniversary lecture, she said: “I see this gesture as furtherance of the support that we have received from you as an organisation and your buy-in into the modest efforts we are making towards sustainably entrenching a tradition of efficiency and transparency in the operations of the Nigerian Ports Authority and across all port locations in the country.
“I thank you for standing with us at the NPA and more importantly for making yourselves available as a platform upon which topical issues that are capable of transforming our country are discussed and solutions identified.”
On why she was given the topic to discuss, the NPA MD said: “My assumption is that this question has been raised for two main reasons. One because the Nigerian ports are a major gateway into the country with over 85 per cent of all the goods and services coming into the country exploiting facilities at the nation’s seaports with an aggregate value exceeding the $15 billion mark annually. An undeniable corollary of the foregoing is that the maritime sector is a major contributor to the economy.
“This is more so when we consider that the oil and gas sector, which is the country’s economic mainstay, is itself almost completely dependent on the maritime sector. All these factors considered therefore, we must all be interested in the effective operations of the sector.
“The second reason the NPA and transparency may come under focus in a meeting such as this is the reputation of sleaze and compromise that the ports seem to have acquired over the years. It goes without saying that if we really must get the best of the blessing that our waterways are, we must commit to more efficiency signposted by manifestly transparent processes.
“One of the most significant things that we must acknowledge when speaking about strengthening institutions is the need to recognise work that has been done in the past, review them, retain the effective and relevant ones and reform areas which can be improved. I said this to say that in spite of the high level of public discontent, significant progress had been made in the management of the NPA and in effect, the ports by subsequent administrations post concession in 2006.
“And here, I think it is important to make it clear that although the NPA was established in 1955 to own and operate ports, between 2005 and 2006, the Authority went through a series of reforms that culminated in the adoption of the landlord model of port operation and administration. “This means that the Authority ceded operational functions at the Ports to private companies retaining only the harbours activities, while the NPA retained the ownership of portland as well as the responsibility for licensing operators and regulating their activities.
“At the end of this exercise, 25 private companies signed different concession agreements with the federal government to manage different terminals in the six ports that were then categorised as the Lagos Port Complex, Tin Can Island Port Complex, Delta Ports, Rivers Ports Calabar Ports and Onne Ports. And while the Authority had to automatically relinquish the daily operations of the ports to these terminal operators, their main duties remained in its exclusive purview. These are Towage, Pilotage and Mooring. The Nigerian Ports Authority Act 2004, CAP 126, LFN provides a considerable basis of de facto concessioning of port facilities under provisions of the “Presidential Authority” in section 24 & 25. And on this basis, the Authority is also able to enter into Joint Ventures and license third-party companies to carry out some of its duties without prejudice to revenue that accrues to the Federal Government.
“A very important point to take away at this juncture is that whereas most Nigerians imagine that everything that has to do with cargo movement and clearance at the ports is the responsibility of the NPA, the mandate of the NPA actually ends with the berthing and offloading of vessels. The NPA also regulates the activities of terminal operators and third-party private companies that have been licensed to take on some of the statutory functions of the Authority. However, there are seven other government agencies operating within the ports and the clearance of cargo rests substantially on these agencies.
“The Authority, however, understands the role it needs to play not just on its own but through collaboration with other agencies of government and private sector participants to improve service delivery at our ports,” she noted, adding: “And an essential ingredient of this goal is the removal of all opacity and deliberate entrenchment of open and transparent systems that build the confidence of all stakeholders.”
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