Monday, 24 March 2014

A needless N26 billion loss

Minister of Finance and Coordinating Minister of the Economy, Ngozi Okonjo-Iweala, has been unusually quiet of late. I think the last time I heard of her was March 4 when she warned that 2015 would be a brutal year for the Nigerian economy.

The former World Bank Managing Director, who had been under series of attacks by the opposition party and Nigeria’s lower legislative chamber told The Banker during an interview that with the country’s election looming, 2015 would be a tough and brutal year in maintaining a strong macroeconomic performance for the country.

The finance minister admitted that she would be targeted by opposition politicians jostling for power ahead of elections in February 2015 and keen to denounce the government’s economic policies.
In her usual candour, she said there would be extreme bashing of her personality and “somebody has to be the scapegoat.”
She said investors will be watching Nigeria closely to see that its reforms and its fiscal and monetary record do not unravel in the run up to voting.
Since that interview, the Minister has decided to go under. I suppose she took a break and prepare for the extreme bashing she predicted. She was conspicuously absent at the 20th Nigeria Economic Summit held in Abuja last week.
The Minister’s absence is taking a toll on the maritime industry.
I learnt that since she was not around, funds have not been released to the Nigerian Shippers’ Council to enable it commence execution of its new role of port economic regulator. I understand the Council had to resort to borrowing funds from the bank to enable it carry out even its normal day to day operation.
Before suddenly disappearing from the scene, Okonjo-Iweala had sent out a very strong signal to the trading community when sometimes towards the end of February, she announced that government was planning to reverse the 110 per cent import duty on rice. The news was received with ovation especially in the maritime industry largely due to the adverse effect the unpopular policy has had on the shipping sector and the entire Nigerian economy.
The Minister practically echoed the cries of Nigerians when she admitted that the policy had failed. She told members of the Manufacturers Association of Nigeria (MAN) in Lagos that the rice policy had promoted smuggling. That is exactly what Nigerians have been saying since last year but she didn’t listen! Otherwise why did it take her and her fellow cabinet members over a year to come to this realisation? Did they lose touch with reality or have the walls of the council chambers become too thick that they no longer hear the voice of the people? Or is vox populi no longervox dei to our political leaders?
Speaking a few days after the MAN meeting in Abuja, Okonjo-Iweala again reiterated her position. She said due to its adverse effect on the economy, she would meet with President Jonathan and her counterpart in the Ministry of Agriculture, Akinwunmi Adeshina, to rework the policy which is costing this country about N1 billion every day.
She admitted that the tariff on imported rice was increased to 110 per cent to encourage Nigerians to farm and grow rice “but it also encouraged smuggling from neighbouring countries because they immediately dropped their own tariffs to 10 per cent.”
“For rice, we decided to bring it down because we see that it is not working,” she said.
It is exactly 26 days today since the Minister admitted the flaws in her rice policy and for someone who admitted the incalculable damage done to the economy; one would have expected an urgent action of sort, but nay! The Minister is not on seat. And everything has to wait until she is back to work. This is rather sad and unfortunate. It does not portray seriousness and good governance. It is an anathema to sound economic judgment.
I know of several importers who placed orders and made arrangements for shipments based on that pronouncement but are now stuck in their tracks. Several shiploads of rice also headed towards Nigeria with the hope that the much anticipated announcement would happen before their arrival. They were disappointed and quietly diverted to neighbouring countries.
Need I remind the Minister that reversal of the loathed policy should be quickly and immediately done? The price of delay is N1 billion every day. It represents the amount lost by both government and the private sector.
Importers of rice and shipping lines no longer come to our ports. Rice was a major commodity at the Lagos Port Complex Apapa but the general cargo terminals have dried up.
Nigeria lost all her rice shipments to the ports of Cotonou and Douala last year due to the policy. The ships that should come into our ports all diverted to these neighbouring ports and the commodity is smuggled in bits and pieces into Nigeria while customs officials look the other way.
Madam Coordinating Minister, please come back to your seat and quickly hold that urgent discussion with the President. I hope we will hear the announcement that import duty on rice has been slashed to 10 per cent with additional 50 per cent levy; effectively bringing the duty to 60 per cent, this week.
And if you’re not planning to resume anytime soon, the issue is actually a simple one. Put a call through to Mr. President and set up a conference call with the Minister of Agriculture. Discuss and agree on the new tariff and ask one of your aides to announce it to the world. It is that simple and you will be surprised at how much trouble you will be saving yourself and the economy of this nation.

Monday, 17 March 2014

Armstringing the Navy

The federal government is making the fight against piracy and other criminal activities on the nation’s territorial waters and in the Gulf of Guinea extremely difficult. This is evident in government’s consistent deprivation of the Nigerian Navy – the focal security agency in the anti-piracy war – of much needed funds especially for the execution of its capital projects and acquisition of much needed platforms.
One of the major handicaps faced by the Nigerian Navy in the fight against pirates is the non-availability of sea-borne crafts and platforms to execute its brief.

In 2013 for instance, N14 billion was appropriated for Navy’s capital projects but by December of that year, only N8 billion representing 55.8 per cent had been released. Curiously, this was far below the average figures for other ministries, departments and agencies of government.
The entire N14 billion, in my opinion, is insufficient to equip the Navy for that year but releasing only a little more than half of it by the end of the year exposed government as lacking in commitment to the restoration of law and order on the waterways.

The Navy’s capital budget in 2013 covered the acquisition of two Offshore Patrol Vessels (OPVs) for N10 billion; development of jetties at the cost of N1.9 billion; purchase of ship spare parts for N116 million; helicopter spare parts for N292 million; procurement of Augusta Helicopter for N1 billion; and kitting of naval personnel for N226 million. Fund was not released in good time to acquire the OPVs and the Augusta helicopter.

It is hypocritical on the part of the federal government to complain of the failure to tackle piracy and oil theft while denying Navy of funds needed to procure the tools required to do the job.
I align with the views of the Chairman, Senate Committee on Defense, Chris Anyanwu, that government was deliberately arm stringing Navy.

Recently, Anyanwu could not help but retort: “You are not giving them the resources, and you are not funding their projects. If they don't have the vessels, they can't work on water, if they don't have the money to even put fuel in existing vessels, they cannot do miracles. So we have to see the ripple effect of the tardiness in releasing their funds. What it comes up to is that at the end of the day you are making it impossible for them to do the work, and there is no need complaining. So, this is what it is.
“I really don't understand what is going on. Every time all I get is that navy is not doing this, navy is not fighting piracy, navy is not fighting oil theft, and we are losing enormous resources through this means and yet navy is like tied down, you are not releasing funds to accelerate the acquisition of the right platforms, you are not doing that.”

With about two weeks to the end of the first quarter of 2014, the story is that Navy is still owed N4.5 billion on its 2013 capital projects. This is amazing to say the least.
It is manifestly hopeless to even start talking about release of funds for 2014 projects.
The new Chief of Naval Staff, Vice Admiral Usman Jibrin, had to go on bended knees last Wednesday to plead with the federal government to release the money which is desperately needed to pay the balance on the two OPVs which are due for delivery in May.

Failure to complete payment may stall the delivery of the two patrol boats and even lead to forfeiture of about N5.5 billion earlier committed to their construction.
I really don’t think our security operatives should be made to beg for money to acquire the tools and equipment they require to do their jobs.
Piracy, or sea robbery in Nigeria, has assumed a worrisome dimension. While the number of pirate attacks worldwide was down to a six-year low last year, thanks to a significant fall in incidents off Somalia, the number of Nigerian piracy attacks increased to their highest level since 2008, according to the International Maritime Bureau (IMB).
With 31 pirate attacks recorded, Nigeria was second to Indonesia, which saw the most attacks last year with 106.

The IMB’s annual global piracy report, which was released recently, stated that “Nigerian pirates were particularly violent, killing one crew member and kidnapping 36 people to hold onshore for ransom.”
According to the report, incidents off West Africa now account for almost one fifth of the worldwide total. In total, there were 264 attacks on ships last year, a 40 percent drop from 2011 when Somalia piracy was at its peak and 237 attacks occurred in that region alone.
Some 300 people were taken hostage last year with 12 ships hijacked, 202 boarded and 22 fired upon, while there were a further 28 attempted hijackings, the maritime bureau said.
West Africa accounted for 19 percent of all attacks in 2013.
“Nigerian pirates and armed robbers accounted for 31 of the region’s 51 attacks, taking 49 people hostage and kidnapping 36, more than in any year since 2008. Nigerian pirates ventured far into waters off Gabon, Ivory Coast and Togo, where they were linked with at least five of the region’s seven reported vessel hijackings,” according to the piracy reporting centre.
You therefore spare no resources to fight the type of pirates and sea robbers described above.
Government should show its sincerity in the anti-piracy war by promptly releasing the outstanding funds to the Nigerian Navy. It should also support the Navy to acquire more OPVs and other military platforms to fight the menace.  

Monday, 10 March 2014

The undercover boss

Comptroller General of Nigeria Customs Service (NCS), Dikko Abdullahi, is pragmatic and frank to a fault.
When he visited the Tin Can Island Port Command of NCS late last year in preparation for roll-out of the Pre-Arrival Assessment Report (PAAR), he did not hide his disdain at the way and manner officers of the Command performed their assignments. There and then, he threatened to redeploy most of them and less than a week later, he made good the threat.

But the mass redeployment notwithstanding, the decay continued unabated at the command. Some of the officers were said to wield more powers than even the Area Controller. Many of them had become criminally rich and lived practically above the law.
I heard several unsavory reports were frequently sent to the Customs High Command in Abuja. Such reports were typically dismissed by the affected officers as being sponsored by their detractors – clearing agents who did not want to pay appropriate duties into government coffers.
It is a known fact that the command had become a haven of sort for the passage of several illegal consignments. The largest cache of drugs seized in this country passed through there in 2010. Several shady deals have also been reported in connection with the port over the years.
The human traffic at Tin Can is unmatched by any other port in Nigeria. You see large number of people trooping in and out of the port without any definite aim or mission. Many of them who hide under the guise of clearing agents are nothing more than touts notoriously called camp boys or kelebe. They act as fronts for customs officers collecting bribe money for their masters. They are like the agbero on the road or truck park.
Truth is, Tin Can command stinks!
The command had become a source of embarrassment to Customs and some drastic measure had to be taken to clean the augean stable.
One would therefore understand why the Customs Comptroller General decided to get first-hand information about the ugly happenings at the command.
When he left his office last Monday, Dikko was said to have informed his aides that they were going to Port Harcourt. He would not leave anything to chance. Not until they got the airport and all mobile phones had been switched off did he reveal their actual destination and when the team landed in Lagos, he instructed against the use of sirens and his usual security escorts.
He was in mufti and was playing the undercover boss role to the hilt. He arrived Tin Can Island Customs Command unannounced and quietly moved from one terminal to the other to really understand why there have been so much complaints about his field officers at the nation’s second largest seaport.
Dikko was stunned. He did not believe what he saw. He became so angry at the conduct of some of his men that he blew his cover. But he achieved the purpose of his visit. He got the message loud and clear. His officers were irredeemably corrupt.
It was a bitter pill to swallow. Those were the same men he fought for and defended passionately at every fora. He fought for their welfare, he increased their salaries, built schools and hospitals for their children but alas, they were far from being contented.
He caught some of them with their hands in the till. He was said to have removed the rank of one of the officers on the spot and ordered the arrest of others.
The Customs boss has done well in this regard and I think he should embark on more of such undercover operations. He should visit Seme border and go through the check points manned by his men. I hope he will be able to withstand the shock.
Most of these field officers are believed to make returns to some godfathers somewhere in Abuja to retain their juicy postings at the command and shield them from disciplinary measures. It is these Abuja godfathers, domiciled in Customs Headquarters that give these unrepentant corrupt officers the impetus to disrespect their seniors and Area Controllers and engage in unbridled corruption. They shield them.
Alhaji Abdullahi should therefore go a step further by fishing out those godfathers for serious disciplinary measures. This will be a good way to repudiate corruption in the Nigeria Customs Service. And it will be a major legacy of Hurricane Dikko.

Monday, 3 March 2014

The days of yore

I read with nostalgia, an article reproduced in Daily Sun newspaper of Friday 21st February, 2014. The article reminds one of the terrible state of our seaports before port concession and I think we have not done enough to acknowledge and savour the great transformation that has taken place at the ports over the past eight years.
The article, titled Four feared dead as police, dockworkers clash at Lagos port, was originally published in Guardian newspaper on Saturday February 22, 2003 - precisely eleven years before Sun reproduced it under its archive section.
It read: It was yet another calamity in Lagos yesterday when a clash between protesting dock-workers and policemen at the Apapa Port allegedly left no fewer than four persons dead and many others injured.
What started as a rift between a dock-worker and a policeman on Thursday suddenly got the port and its environment enmeshed in a bloody clash.
The dock-workers were protesting an alleged drowning of their colleague Mr. Ismaila Asumo, by a policeman attached to the port, for refusing to offer bribe for a bag of sugar.
According to an eyewitness, trouble started on Thursday when the policeman demanded an undisclosed amount from Asumo who was carrying a bag of sugar out of the port premises. The dock-worker allegedly refused to pay the amount, which was said to be higher than the usual charge. In the end, he paid with his life.
The policeman got angered and decided to seize the sugar, leading to a fight between the two. Unfortunately, the policeman pushed the dock-worker into the lagoon where he got drowned and died.
Sources said scores of dock-workers who saw their colleague drown immediately converged for the purpose of retaliation. They attacked the policeman, tied him and also threw the officer into the lagoon. But he was fortunate as his fellow policeman jumped into the lagoon to rescue him.
This drew a battle line between the policemen and the dock-workers. Another protest was triggered by the dock-workers who were said to be armed with bottles and matchets and in the encounter another policeman shot a dock-worker to death in self defence on Thursday.
According to sources, the workers again mobilised themselves as early as 6 a.m. yesterday to embark on another protest. But on getting to the port, they met heavily armed and stern-looking anti-riot policemen already waiting to stem any further disturbances.
The presence of the policemen could not deter the irate dock-workers who allegedly began a fresh confrontation with the police in which two others were shot dead, bringing the total victim to four.
The dead workers were carried to the Western Ports Police Area Command Headquarters, Lagos Ports Complex, Apapa Wharf by protesters who were chanting solidarity songs.
A dock-worker said the policeman who drowned Asumo was fond of creating problems at the port even though he was not assigned to the area where the incident occurred.
His words: "The policeman is fond of coming here to make trouble, he is not even assigned to patrol this area. This is not the first time he would be coming around to cause trouble. It is rather unfortunate that he allowed his bad temper to overtake him."
Reacting to the crisis, the President-General of the Maritime Workers Union of Nigeria (MWUN) Mr. Onikolese Irabor said the protest by the dock-workers was peaceful, alleging that it was the policeman who made it violent by opening fire at the protesters.
He disclosed, however, that the leadership of the union was making frantic efforts to calm the protesters and ensure that peace returned to the port.
Irabor said an audience had been sought with the police and the port's management in a bid to resolve the issue.
When asked whether the dock-workers would return to their duty posts immediately, Irabor said they would resume "as soon as an amicable agreement is reached among the union, port's management and the police".
The Assistant Commissioner of Police in-charge of the port's CID, Mr. Femi Adenaike described the situation as bad but assured that the police would do everything possible to contain it.
According to him, hoodlums almost took over the protest from the dockworkers by attempting to break into the First Bank Complex close to the port but for the prompt action by the policemen who dispersed them with canisters of tear gas.
Sporadic gun shooting rented the air as police tried to put the area under control.
The Western Ports Police Area Command Headquarters' spokesman Mr. Friday Ogedengbe who spoke to reporters confirmed the incident, saying that the situation and that he could not be categorical about the number of casualties.
"I cannot confirm the actual number of death and those who were wounded as the situation right now is still hazy," he said.
Also, the Lagos State Police Spokesman Mr. Emmanue Ighodalo told The Guardian that the area was being brought under control.
"Armed policemen have been deployed to maintain peace at the port, the Area Commander had assured us of that," said Ighodalo.
Business activities in the entire port area and environs were brought to a halt as people were seen running helter skelter to avoid being injured or killed.

The article captured the state of our ports before the reform of 2006. Incidents like the one reported above occurred very regularly with its attendant consequence on the Nigerian economy.
Pilfering was the order of the day. The front of Lagos Port Complex, Apapa was a market square. Dockworkers, policemen and customs officers were the wholesalers who sold stolen goods very cheaply to middle-aged women who in turn sell the wares at below market price to 'customers.'
Rice, fish, sugar, fertilizer, electronic items etc were freely stolen from the ship and taken to the front of the port to sell off. The security operatives at the port connived actively with dockworkers to steal from importers.
The story was the same at Tin Can Island Port and the then RORO Port. God help you if you leave your imported car at the terminal for a week. You will end up clearing only the carcass as the headlamps, gear box, steering and all other vital components would have been removed.
A car was once auctioned to me well over ten years ago. I took delivery of the car at the former RORO Port after paying about N85,000. It was an Omega Opel. What I took delivery of after paying the N85,000 was mere carcass. If I had bothered inspecting when I got the auction paper, I would not have borthered paying the reserved price at all.
Such was the state of our port. But of all these have become things of the past; confined to history.

One must therefore commend government for taking the bold step to reform the port and congratulate the concessionaires for bringing sanity into the system.