Follow Us on Google
By Dickson Okafor
Festus Mbisiogu, CEO, Blue Diamond logistics, China and former Coordinator of Nigerians in the Diaspora Organisation (NIDO), Guangzhou chapter, has commended the Nigerian government for waking up to its responsibility of halting the loss of billions of Naira through crude oil theft.
As a stakeholder in the maritime industry, he advised the Federal Government to pay more attention to the logistics sector by empowering indigenous ship owners through implementation of cabotage law.
Mbisiogu also called on the government to clamp down on foreign vessels operating on the nation’s coastal waters illegally as their activities are preventing indigenous ship owners from thriving.
He speaks on why shipping companies prefer to send their consignments to neigbouring countries ports insteady of Nigerian ports.
Excerpts
Oil theft on Nigerian waters
I want to start by saying that the present administration led by President Muhammadu Buhari, has just woken up to its responsibility by checkmating the irregularities going on in our waterways. These things have been going on for many before the inception of the this administration. A committee was set up by government to look into this breaches, working tirelessly to ensure they discover why we have crude oil theft on our waterways and those behind it.
Shipowners complaint of being shortchanged
Yes, in the case of the indigenous ship owners, they alerted the government few days ago on what is ahead of them.
In the sense that Dangote refinery as well as Dangote fertiliser are about to commence operation next year. Let’s understand this carbotage law, the law was created to protect the indigenous ship owners in the country by giving them access to dominate maritime sector. But now they are complaining that they don’t have financial capacity to compete with the foreign ship owners. And there is this intervention fund of $350million that the government proposed to give to the indigenous ship owners and these actors have not had the access to this very fund. And they are complaining to government that something is coming up next year and that these foreign ship owners are gearing towards taking over the business if Dangote refinery takes off. They don’t have the financial capacity to compete hence they are asking government to disburse this money to them for them to be able compete with the foreign ship owners. In fact, they are alerting the government that if they don’t take proactive measures there will be capital fight because these foreign ship owners will make the money here and take it to their country. So, it is a welcome development and I pray that government will listen to their call.
How Dangote refinery’ll ease fuel scarcity
Yes, it is indeed a worthy cause should Dangote refinery come on board. Just as I said before there will be significant ease in the petroleum sector. Their fear is this, if Dangote refinery comes on board next year and the fertiliser business is ongoing, there will be a whole lot of activities going on in the maritime sector and they don’t have enough fleets to compete with these foreign ship owners. So, they are telling government that if they don’t do anything urgently, the foreign investors will dominate the sector and the essence of its cabotage law will be defeated.
Nigeria’s Deep Blue project and cargo clearance
If you look at the current rating by the International Maritime organisation , we were told that Nigeria’s waterways are safer now compared with the previous years. That was the rating that was released few weeks ago. That is why I said the present government is doing well in that regard because it is under this administration that we started discovering crude oil theft and some of the naferious things happening in our waterways.
But has it stopped foreign ships from berthing in neighboring countries waters instead of coming directly to Nigeria?
Why some foreign ships prefer to berth in neigbouring waters like in Benin Republic and the rest of them is due to congestion in our ports. Let me digress more when you talk of logistics because what we are discussing is about management of inflow of goods and services from the original place to the final destination to meet company’s objective of customers’ satisfaction. These are the essence of logistics. Unfortunately, logistics is being hampered because of so many things that are going on at the sea ports. You see some of the impediments or obstacles importers or business owners are having consigning their goods into country. That is why these shipping companies don’t consider it wise to send their cargos to Nigeria. However, it is not only because of our waterways are not safe, there are other things that made these shipping companies to stop at Contonu and use smaller vessels to bring their consignment into Nigeria. These other factors include congestion at the sea port, delay in transferring containers to private bonded terminals and and high rate of clearing cargoes here.
For instance, as a shipper, Blue Diamond Logistic, China you find out that if you want to ship your container to Cotonu it is about $1,000 to $2,000 difference from charges in Cotonu. They may charge $7, 000 for 40 feet container, but in Cotonu they will charge $5, 000. So, if you convert it to Nigeria’s currency it will be about N3million which is about 30 per cent discount from what Nigeria charges them and that is why these shipping companies prefer Cotonu ports. So, because shipping companies pay less charges in Cotonu and more in Nigeria, they decide to charge us high because if they send containers to Nigeria it usually take them two weeks or more to transfer the containers to private bonded terminals. Also, it takes them two months or more to have access to their empty containers due to bureaucracy.
Not only that, after clearing the containers, transferring them to the owners there are lots of agencies that stop them on the way. To these shipping companies, all these bureaucracies are frustrating their business hence they had no option but to send their cargos to neigbouring countries where they are charged less. So, shipping companies pay less in Cotonu and more charges in Nigeria that is why they prefer to send their cargos to the neigbouring countries which is to the detriment of our economy. Therefore, that is why government should pay more attention to the logistics sector and do more research because it is the largest employer of labour after agriculture.
How government can tackle the challenges of logistics business
The total revenue realised from the maritime as at 2021 to 2022 according to the Nigerian Custom and Exercise was N1.3trillion which is almost 28 per cent contribution to the nation’s annual budget.
As I said earlier, the logistic section of the maritime is one of the largest employers of labour in the country. It is a known fact that all over the world if any nation pays attention to maritime, will attract more inflow of Foreign Direct Investment (FDI).
Let me give you an insight, for us businessmen and women we factor in the cost of bringing down these containers to the final destination. Don’t forget that I’m also into manufacturing, some of our trucks we sent to carry containers to Abuja, Kaduna, Plateau, Kano and Borno states have been on the road for one month and two weeks. They have not gotten to their final destinations because of poor condition of the roads and flooding and that is one of the factors hampering logistics. And with this, it will be difficult for Nigeria’s economy to economy to grow.
Management of empty containers
Let me use China and Dubai where we are domiciled as a case study. In these countries they have good roads because they are well structured. They plan their cities in such a way that an area is mapped out where sea ports are located.
A specific area is marked out as places where containers are kept. These places are far from where citizens reside. You can see somebody who own some of these containers living far from where the containers kept, but accessing where his containers are kept ia never a problem.
But in Nigeria, the system is faulty from the beginning that is why our bonded terminals are scattered everywhere. Right now Lagos State is doing something to decongest the ports in Apapa through the ongoing construction of Lekki Free zone that will help to reduce traffic in Apapa area in the state.
