Monday, 7 December 2015

Amaechi, Fashola and the allegory of the cave

The agonizing fuel situation, vexatious Apapa gridlock, distressing slide in the value of the naira and the generally bewildering living conditions of the masses combine to provoke the feeling of a rudderless state. The level of frustration is rising ever so much faster than Nigeria’s economic growth. Insinuations are rife that the progressives did not really have a plan and that all they possessed was a plan to develop a plan.
Nevertheless, Nigerians look up to the new government to earnestly deliver the promised change. Much hope is hinged on the two super Ministers – Fashola and Amaechi. Our hope of a better maritime industry also rests on these two former Governors.
While eager to make suggestions to the duo, one is at a loss as to the type of advice that would be suitable at this time. Amaechi is not ignorant of the problems facing the country. He is not a total stranger to the maritime environment either having served as Governor of Rivers State – a state that hosts the nation’s oldest seaport and the world famous Onne Port – for eight years. Ditto Fashola. The nation’s two major seaports are located in the state he ran commendably well for eight years. Fashola was a regular visitor to Apapa. His administration initiated the construction of the Lekki seaport. He had a clear understanding of the importance of the waterways. He set up the Lagos Waterways Authority (LASWA) to encourage the use of alternative mode of transportation by Lagosians. He even went as far as creating a sort of Coast Guard for Lagos.
So what does a man who vastly feels compelled to give advise say to these gentlemen?
Aha, the allegory of the cave! Plato’s allegory of the cave would be apt.
The allegory provides an interesting perspective to life. It was written as a dialogue between two brothers, Socrates and Glaucon.
Socrates begins by asking Glaucon to imagine a cave where people have been imprisoned from childhood. These prisoners are chained so that their legs and necks are fixed, forcing them to gaze at the wall in front of them and not look around at the cave, each other, or themselves. Behind the prisoners is a fire, and between the fire and the prisoners is a raised walkway with a low wall, behind which people walk carrying objects or puppets “of men and other living things”.
The people walk behind the wall so their bodies do not cast shadows for the prisoners to see, but the objects they carry do (“just as puppet showmen have screens in front of them at which they work their puppets”.
The prisoners cannot see any of this behind them and are only able to see the shadows cast upon the cave wall in front of them. The sounds of the people talking echo off the shadowed wall, and the prisoners falsely believe these sounds come from the shadows.
Socrates suggests that the shadows constitute reality for the prisoners because they have never seen anything else; they do not realize that what they see are shadows of objects in front of a fire, much less that these objects are inspired by real living things outside the cave.
Plato then supposes that one prisoner is freed, being forced to turn and see the fire. The light would hurt his eyes and make it hard for him to see the objects that are casting the shadows. If he is told that what he saw before was not real but instead that the objects he is now struggling to see are, he would not believe it. In his pain, Plato continues, the freed prisoner would turn away and run back to what he can see and is accustomed to, that is the shadows of the carried objects. He writes “…it would hurt his eyes, and he would escape by turning away to the things which he was able to look at, and these he would believe to be clearer than what was being shown to him.”
Plato continues: “suppose…that someone should drag him…by force, up the rough ascent, the steep way up, and never stop until he could drag him out into the light of the sun.” The prisoner would be angry and in pain, and this would only worsen when the radiant light of the sun overwhelms his eyes and blinds him.
The sunlight is representative of the new reality and knowledge that the freed prisoner is experiencing. But slowly, his eyes adjust to the light of the sun. First he can only see shadows. Gradually he can see the reflections of people and things in water and then later see the people and things themselves. Eventually he is able to look at the stars and moon at night until finally he can look upon the sun itself. Only after he can look straight at the sun “is he able to reason about it” and what it is. Plato continues, saying that the freed prisoner’s perception would be permanently altered. He would think that the real world was superior to the world he experienced in the cave; he would bless himself for the change, and pity the other prisoners and would want to bring his fellow cave dwellers out of the cave and into the sunlight.
The returning prisoner, whose eyes have become acclimated to the light of the sun, would be blind when he re-enters the cave, just as he was when he was first exposed to the sun. The prisoners, according to Socrates, would infer from the returning man’s blindness that the journey out of the cave had harmed him and that they should not undertake a similar journey. Socrates concludes that the prisoners, if they were able, would therefore reach out and kill anyone who attempted to drag them out of the cave.
Honourable Ministers, you’ve been out of the cave a while. You’ve seen the true light. You’ve heard the true sound and seen the real images. You’re back now to take this imprisoned generation out into sunshine; please don’t allow the people you desire to save resist you. Maritime industry confusionists are very loud and unrepentant. Please don’t let them hold you back.
Drag, pull, push and force us up the rough ascent. Ignore the hues and cries. Make the change happen by all means. Please.

Monday, 30 November 2015

Cotonou as Nigeria's biggest port

“I work at Nigeria’s largest seaport.”

“Really, congrats. Apapa Port is really a nice place to work.”

“Maybe it is but I’m not talking about Apapa Port. I don’t work in Nigeria neither am I a Nigerian.”

“No?”

“I work at Le Port Autonome de Cotonou or what you people call in English Autonomous Port of Cotonou (APC).”

“Really? APC is also the ruling party in Nigeria.”

“I suppose they like our own APC because they make policies that favour us and push cargoes to our ports.”

“But the policies were made by the past administration.”

“Yes they were, but the APC government has retained them. Isn’t that a sign of love for us? Even our President Boni Yayi has described our country as Nigeria’s 37th state.”

“It is amazing really. I’m beginning to buy your argument. Otherwise why will a government watch as all the vehicles coming into its country are discharged in the port of another country and then smuggled in by night while security agencies look the other way.”

“You don’t know the full story. Our President hosted a party recently at Porto Novo to celebrate our economic boom which resulted from the increased activities at our port. Since your government decided to increase the import tariff on cars from 20% to 70% last year, our port has been booming. At present, more than 70% of the cars used by Nigerians are imported through our port because our own import duty here is a mere 10%. We have been able to employ a lot more of our youths and unemployment rate is less than three percent.”

“Really? More than 50% of the youths in my country are unemployed!”

“I know. And your ports are even sacking workers.”

“Na so.”

“Ah ah! You speak pidgin English.”

“My customers are Nigerians so I learn their language. No wahala.”

“Na wah o.”

“Did you know also that chicken and rice – the most popular pairing in Nigerian cuisine – find their way into your country from our port? I really love your government because they create a lot of jobs for us. After all we don’t have oil which your country has in abundance. And you guys are good at wasting resources so we benefit from your excesses.”

“Tell me about this rice and chicken business.”

“It is interesting but I like it. You know poultry products are banned in your country. So what we do is allow it enter our own country at five percent import duty. We know your borders are porous so with a little bit of support from our end, the products all find their way into your country. Just go and check your markets. How did all those frozen chicken and turkey, which are not allowed through your ports, get there?”

“But our Customs said they’re winning the fight against smuggling of poultry products.”

“Only on the pages of newspapers. Your ban on frozen poultry products is making the chicken-smuggling business fly. Look, just 20% of the chicken Nigerians eat comes from Nigeria. The rest come from our port and sneaks over the border onto your shelves.”

“This is very disturbing. Tiny Benin Republic, with a total population that is about half of Lagos State imports as much rice as China and nearly as much frozen chicken as the whole of U.K.”

“We’re importing them for Nigeria. Not for us.”

“I am sure this APC will do something about it very soon.”

“Will the APC of Nigeria undo the APC of Benin Republic? E no go happen. And I’m sure you know the story of textiles too. It is similar to the vehicle, rice, chicken and turkey story.”

“Your country is not a good neighbour. You’re destroying our economy. You’re saboteurs. We must shut our borders until you repent.”

“You tried that before. Remember your former President Obasanjo did exactly that in August 2003? The closure did not last more than a week.”

“Yes I remember. Obasanjo took the action because he wanted your then President Mathew Kerekou to handover the cross-border bandit, Ammani Tijjanni to Nigeria.”

“Exactly. You might also remember that more Nigerians cried over the border closure than Benenoise.”

“I think we are our own problem. Those who do the smuggling are mostly Nigerians.”

“Exactly my point. We merely handle the goods at our port but those who move them from Cotonou by trucks across the border are mostly Nigerians.”

“I believe our APC government will do something about these policies that promote smuggling. We now have noisemakers – I beg your pardon, I meant to say Ministers. Now that we have Ministers in place, all these smuggler-friendly policies will be reversed.”

“I don’t think so because we have already contracted some of your miracle-manufacturing prophets to pray earnestly against any such move.”

“I heard that even the man behind our controversial cargo tracking note is from your country.”

“Is that news to you? That is story for another day.”

Sunday, 22 November 2015

Wahahi if you tear my agbada, I go comot your cap

So politics change people or is it people that change politics. I was taken aback when I read of Senator Ali Wakili’s babariga dragging incident with another Senator last week over the composition of Senate committees. It’s still a bit difficult for me to understand the concept of ‘juicy’ and ‘non-juicy’ committees that has polarized the upper legislative chamber of late; distracting the ‘distinguished Senators’ from the crucial task of making laws.
I have known Ali Wakili for a fairly long time, I suppose about 16 years now. He was a Customs Comptroller who served at various times as Area Controller of Murtala Muhammed Intentional Airport Command, Tin Can Island Port Command and Federal Operations Unit – the Lagos-based anti-smuggling arm of the Nigeria Customs Service. In all the years that I have known him, the once youngest Customs Comptroller in Nigeria, portrayed the picture of a perfect gentleman.
You can then imagine my surprisation (apology to Chief Zebrudaya) when I read of the mild drama that played out between Senator Kabiru Marafa (APC, Zamfara Central) who has been critical of Senate President Bukola Saraki’s leadership style and Wakili (APC, Bauchi Central) at the Senate Press Corps secretariat shortly after Marafa walked out of the red chamber in protest of his being ruled out of order by the Senate President when he reopened debate on the recent formation of the Senate standing committees.
The entire drama, which sounds like a Nollywood comic scene, is a good portrayal of how our lawmakers ‘represent their constituencies’. Enjoy.

Wakili: You have come here to disgrace the Senate again. Is this what you want to do for the next four years?

Marafa: I will, I will. Because I am not working for you.

Wakili: You cannot sit down there and fight against the Senate.

Marafa: I am representing Nigeria and representing my people. And let me tell you, even the nonsense thing they are saying about suspension, nobody can suspend a senator.

Wakili: You are playing to the gallery. You are playing your script. Who has ever spoken about your suspension?

Marafa: Let us talk about issues.

Wakili: I have discussed all these your issues in today’s Mirror.

Marafa: Mirror, which kind Mirror? Let us do it (address journalists).

Wakili: Newspaper.

Marafa: Who, my own?

Wakili: Yes.

Marafa: Ku samun Mirror (Get me National Mirror). I will respond to it. We raised issues. And we give orders (rules) and point of constitution order.

Wakili: That is not what your constituency sent you here (to do).

Marafa: Are you one of them?

Wakili: We are talking of poverty, education. You are wasting your energy here on useless point of order. I am warning you.

Marafa: It is not useless. You can’t say that order is useless.

Wakili: I will go to your constituency and see what you have done there.

Marafa: Go back. I will go to your own. I was in politics before you when you were wearing uniform (both senators started dragging each other’s attire at this point).

Wakili: Gentlemen of the press, there are issues bedevilling this country…. (Marafa interrupts him).

Marafa: Even if you are not God-fearing, because they made you chairman, a bloody newcomer chairman of a committee. That is why you are talking this way. I am not doing anybody’s game plan. I am speaking the minds of Nigerians.

Wakili: Come, you are a storm in the Senate teacup and a gadfly.

Marafa: I told you I was in politics when you were wearing uniform (still dragging Wakili’s attire).

Wakili: Leave me, look at it. That is not the issue. How old are you?

Marafa: It doesn’t matter.

Wakili: Let go.

Marafa: (Talking to journalists). He said he raised issues in National Mirror. Let him say the issues. I will respond to them here.

Wakili: You see, your experience has not helped you. It (Senate rules) says that where such a matter has been decided, you cannot raise it again.

Marafa: That is nonsense!

Monday, 16 November 2015

The real problem with Nigerian ports

Private terminal operators have inadvertently become the whipping child of Nigerian ports. Nigerian Ports Authority (NPA) used to be at the receiving end of the blame game before port concession but that has since changed with the coming of port concession in 2006.
Whenever people mouth ‘high cost of doing business at the port’, without much thoughts, they readily point accusing fingers in the direction of concessionaires.
I think this is rather simplistic and a reflection of lack of deep thoughts and understanding of port operation in the country.
The truth is that private terminal operators have not only done much to improve the fortunes of our ports, they have also reduced the cost of doing business within their own spheres of influence.
Former Minister of National Planning, Dr. Shamsudeen Usman, who frequently visited the port succinctly captured the contribution of the terminal operators when he said “Any ship that comes into Apapa docks immediately but the time of discharge will depend on the type of cargo to be discharged. Before the concession, many ships were waiting to berth such that you see a large number of ships lining up to the Atlantic waiting to berth but now it looks as if there is no business going on in the port. What we see now is due to the work that all these terminal operators have done in the port.”
The former Minister, who once led the Policy and Monitoring Committee of the National Council of Privatisation (NCP), to the Lagos Port Complex, Apapa also said that port operation in Nigeria had come a long way, stating that “obviously with all the improvement and investment taking place we are heading to a situation where there is a significant headway.”
“For instance, the additional surcharge imposed on every containers coming into Nigeria has been removed and this has been a significant benefit to the importers and those who are doing business at the port”, the former Minister stated.
What Usman said had been stated severally in the past by other leading personalities and keen watchers of port operation in the country.
The situation in our ports today, especially due to increased volume of import by about 200 per cent over the past seven years, would have been worse but for terminal operators.
But port operation and its associated costs are way beyond the direct influence of private terminal operators. There is more to it than that. As a matter of fact, the amount paid to terminal operators, according to survey, is less than two per cent of the cost incurred by importers in the logistics chain. Where then lay the big chunk of this cost of doing business at the port?
In my opinion and from years of observation, high import duty, corruption and bureaucratic bottlenecks are the major reasons why Nigerian ports remain the most expensive among ports in the West African sub-region. Not terminal handling charges or progressive storage charges.
High import duty, corruption and bureaucratic bottlenecks are the factors responsible for the high cost of doing business at Nigerian ports by way of increasing the amount of money importers spend on taking delivery of their consignments out of the port.
As a matter of fact, the costs incurred by port users as a result of these factors becloud the worthy gains of port concession.
Apart from being compelled by the Bureau of Public Enterprises (BPE) in 2006 to charge 30 per cent less than what NPA used to collect as Terminal Handling Charges, port concessionaires have succeeded in reducing the dwell time of vessels, improved turnaround time of vessels and enthrone, to a reasonable extent, efficiency in port operation.
Despite the improved turnaround time, unnecessary delay of vessels by government officials upon arrival and before departure is still commonplace.
Time is money in shipping and that is why in other climes, conscious efforts are made to avoid delaying a ship because the cost implication may be as much as USD10,000 an hour. Elsewhere when a vessel arrives the port, it sails straight to berth and begins to discharge almost immediately while regulatory authorities simultaneously carry out their regulatory duties. But not so in Nigeria! When a vessel arrives at our port, it is first kept waiting for about six hours by the authorities under the guise of searching, rummaging and performing other regulatory functions. The vessel is also kept for an average of another six hours after discharging before it is allowed to sail. So unlike at other ports, a vessel calling at Nigerian ports wastes an average of twelve hours to bureaucratic bottlenecks. The average cost of this on a medium size ship will be about USD120,000.
Will the shipping company absorb this cost? Of course not, it will pass it on to the shippers and consignees.
Delays in the clearance of cargo also contribute to the high cost of doing business. Many importers and agents do not commence the process of clearing their cargoes until the vessels arrive. If the clearance process could commence pre-arrival of vessels, most consignments would be cleared within the first three days of arrival which are rent free days and thus substantially reduce charges associated with storage payable to terminal operators and demurrage payable to shipping companies.
A publication titled Why Does Cargo Spend Weeks in Sub-Saharan African Ports? written by Gaël Raballand, Salim Refas, Monica Beuran, and Gözde Isik and published by the World Bank last year ranked Nigerian ports as having the highest cargo dwell time in Sub-Saharan Africa.
The book was the outcome of research conducted on ports operations in six countries in the region.
The authors of the book claimed that most ports in Sub-Saharan Africa have average cargo dwell times of about 20 days, compared to three to four days in most large international ports. They blamed the trend on the low level of professionalism of importers and clearing and forwarding agents and the strategies of shippers.
We must deal with these systemic and man-made issues if we’re serious about driving down the cost of doing business at the port.

Monday, 9 November 2015

A case for shipbuilding and repair yards

The maritime sector provides very interesting and exciting prospects for economic growth.
A strong and viable maritime industry and Nigeria-flag fleet is critical to our economic and national security interests. Our longshoremen and mariners serve a unique role acting as an economic driver in transporting domestic and international cargo. It is therefore critical that our national policies embrace maritime transportation as a vital component of our nation’s transportation system, and make significant investments in the Nigerian maritime industry and port infrastructure.
A vital component of the maritime sector is the shipbuilding and repair industry, which has largely suffered neglect since Nigeria’s independence.
Evidence from Ancient Egypt shows that the early Egyptians knew how to assemble planks of wood into a ship hull as early as 3000 BC.
In the early modern era, shipyards became large industrial complexes with shipbuilding financed by consortia of investors.
The industrial revolution made possible the use of new materials and designs that radically altered shipbuilding. Iron was gradually adopted in ship construction, initially in discrete areas in a wooden hull needing greater strength, (e.g. as deck knees, hanging knees, knee riders and the like.
After the Second World War, shipbuilding (which encompasses the shipyards, the marine equipment manufacturers, and many related service and knowledge providers) grew as an important and strategic industry in a number of countries around the world. This importance stems from the large number of skilled workers required directly by the shipyard, along with supporting industries such as steel mills, railroads and engine manufacturers; and a nation’s need to manufacture and repair its own navy and vessels that support its primary industries.
Shipbuilding has therefore remained an attractive industry for developing nations. Japan used shipbuilding in the 1950s and 1960s to rebuild its industrial structure; South Korea started to make shipbuilding a strategic industry in the 1970s, and China is now in the process of repeating these models with large state-supported investments in this industry.
Currently, South Korea is the world’s largest shipbuilding country with a global market share of 41%. South Korea leads in the production of large vessels such as cruise liners, super tankers, LNG carriers, drill ships, and large container ships. In the 3rd quarter of 2011, South Korea won all 18 orders for LNG carriers, 3 out of 5 drill ships and 5 out of 7 large container ships. South Korea’s shipyards are highly efficient, with the world’s largest shipyard in Ulsan operated by Hyundai Heavy Industries slipping a newly built, $80 million vessel into the water every four working days.
South Korea’s “big three” shipbuilders, Hyundai Heavy Industries, Samsung Heavy Industries, and Daewoo Shipbuilding & Marine Engineering, dominate global shipbuilding, with STX Shipbuilding, Hyundai Samho Heavy Industries, Hanjin Heavy Industries, and Sungdong Shipbuilding & Marine Engineering also ranking among the top ten shipbuilders in the world.
Japan had been the dominant ship building country from the 1960s through to the end of 1990s but gradually lost its competitive advantage to the emerging industry in South Korea which had the advantages of much cheaper wages, strong government backing and a cheaper currency.
South Korean production overtook Japan’s in 2003 and Japanese market share has since fallen sharply.
China is an emerging low-cost, high-volume shipbuilder that briefly overtook South Korea during the 2008-2010 global financial crisis as they won new orders on medium and small-sized container ships.
The strength of shipbuilding and repair indusrty can be seen in a recent report released by the U.S. Maritime Administration (MARAD).
The U.S. shipbuilding and repair industry supported more than 110,000 jobs and contributed $37.3 billion in overall annual gross domestic product to the U.S. economy in the year 2013, according to MARAD.
The new figures show that the U.S. domestic shipbuilding industry is growing. MARAD’s last study, showing figures from 2011, showed that U.S. shipyards supported 107,000 jobs and directly and indirectly contributed $36 billion in gross domestic product.
In 2013, there were 124 active shipbuilders in the United States, spread across 26 states. In addition, there were more than 200 shipyards engaged in ship repairs or capable of building ships but not actively engaged in shipbuilding, according to MARAD. The majority of shipyards are located in the coastal states, but there also are active shipyards on major inland waterways such as the Great Lakes, the Mississippi River, and the Ohio River, the MARAD data showed.
According to MARAD, in 2013, the U.S. private shipbuilding and repairing industry directly provided 110,390 jobs, $9.2 billion in labor income, and $10.7 billion in GDP. Including direct, indirect, and induced impacts, on a nationwide basis, total economic activity associated with the industry reached 399,420 jobs, $25.1 billion of labor income, and $37.3 billion in GDP in 2013, the MARD data showed.
The states with the highest levels of overall direct, indirect, and induced employment associated with the industry are Virginia, California, Mississippi, Louisiana, and Texas, MARAD said.
The date also showed that the federal government, including the U.S. Navy, U.S. Army, and U.S. Coast Guard, is an important source of demand for U.S. shipbuilders. While just one percent of the vessels delivered in 2014 (11 of 1,067) were delivered to U.S. government agencies, 10 of the 12 large deep-draft vessels delivered were delivered to the U.S. government: five to the U.S. Navy, four to the U.S. Coast Guard, and one to the National Science Foundation, according to MARAD.
All ships need maintenance and repairs. A lot of maintenance is carried out while at sea or in port by ship’s crew. However a large number of repair and maintenance works can only be carried out while the ship is out of commercial operation, in a ship repair yard.
The MARAD study showcases the important role the U.S. shipbuilding and repair industry plays in both commercial and military sectors, while also highlighting the critical support the shipyard industrial base provides to the nation’s economic and national security.
We must therefore pay quality attention to this industry to create much needed jobs and retain value within the Nigerian economy.

Sunday, 1 November 2015

A wasteful $8 billion project

The Suez Canal took 10 years to build and cost thousands of workers their lives. When planners suggested three years for a second one, Egypt's president balked.
"Not three years, just one," he ordered.
Twelve months later, Abdel-Fattah El-Sisi hosted a party to celebrate the biggest expansion of the canal since it first opened in 1869. For the former army chief seeking to bolster his rule, the symbolism was impossible to miss.
Less clear are the economic benefits of what billboards in Cairo and New York's Times Square dubbed "Egypt's gift to the world," which will raise capacity and shorten the time it takes to sail the 193-kilometer (120-mile) link between the Red Sea and the Mediterranean.
The lavish August 6 opening ceremony of the expanded canal, attended by dignitaries including French President Francois Hollande and North Korea's deputy leader Kim Yong Nam, was held amid sluggish global trade growth to which the canal's fortunes are linked.
From a shipping industry point of view, the initiative to expand the Suez canal was a bit of a surprise to many because there was no pressing need for it. Plus it did not, and still does not, make business sense.
Suez has yet to fully recover since the global financial crisis caused shipping to plummet in 2009. Though total tonnage has increased, the number of vessels using the canal remains 20 percent below its 2008 level and just two percent higher than a decade ago.
Rather than a bottleneck, analysts say those statistics reflect slower global trade growth, which the International Monetary Fund (IMF) expects to average 3.4 percent in the period 2007-2016, compared to seven percent over the previous decade.
The Baltic Dry Index, which measures rates for shipping iron ore, coal and grain and is viewed as a bellwether for the global economy, slumped to a record low 509 points in February. It remains about 90 percent below its all-time high of 11,793 reached in 2008.
"At the moment, speed is not a key factor for container shipping, the shipping sector which most utilizes the canal," according to Michelle Berman, the head of operational risk at BMI Research, a unit of Fitch Group.
A bigger issue is a "surplus of ships" relative to demand, with ever-larger vessels built for the Asia-Europe route compounding the problem.
The government hasn't made public viability studies to show how it will gain a return on its 64 billion Egyptian pound ($8.2 billion) investment.
The expansion will meet future demand, with traffic expected to double to 97 vessels a day by 2023, said Mohab Mameesh, head of the Suez Canal Authority.
"By creating a second lane of the canal we are able to reduce waiting times, which reduces fuel expenditures and costs, with no increase in our toll fees," he said.
Global trade volume would need to rise by around nine percent a year for Suez to reach its traffic goal. And this is quite unlikely. But this didn't stop El-Sisi and his government from talking up the new canal amid political challenges to its rule.
Hundreds of Egyptians, most of them supporters of the deposed Muslim Brotherhood, have been killed and thousands imprisoned since El-Sisi, as army chief, pushed his Islamist predecessor from office in 2013 after mass protests. El-Sisi was elected president last year.
The political turmoil has polarized Egyptians. El-Sisi supporters say it saved the country from the deadly strife affecting much of the Middle East, while opponents criticize the government's human rights record and what they regard as brutality used to restore stability.
The August 6 canal commissioning party, with an estimated price tag of $30 million, was a chance for the government to send a more positive message by harking back to the events marking the canal's 1869 completion.
The canal has since transformed global trade with about eight percent of the world's cargo now passing through it, according to the Suez Canal Authority. Traveling from Singapore to New York through Suez reduces the distance by 19 percent compared to the route via the Pacific and the Panama Canal. From the Persian Gulf to Rotterdam, Suez saves 42 percent by removing the detour around the Cape of Good Hope.
"Even without any improvements, the canal would always be attractive," said Neil Atkinson, head of analysis at Lloyd's List Intelligence.
The second canal — actually a new 35-kilometer channel and 37 kilometers of widening and deepening of the original — allows two-way traffic and reduces transit time to 11 hours from 18, according to the canal operator. The expansion won't allow larger vessels to use the route.
New ports and logistical services are expected to follow, and the project includes six tunnels under the canal. The authority expects revenue to grow to more than $13 billion by 2023, up from $5.5 billion in 2014.
"'Build it and they will come' is not enough," said Simon Kitchen, a strategist with Cairo-Based investment bank EFG- Hermes, adding that companies will require incentives to build factories and other facilities. "The government needs to give ships a reason to sail through the canal," he said.
Others are more positive. Egypt's economy grew at over four percent in the nine months to March for the first time since 2010, mainly due to infrastructure spending related to the canal upgrade, according to investment bank Pharos Holding for Financial Investments.
A shorter transit may save up to four percent of journey costs depending on the length.
The project "was a necessity to maintain the attractiveness of the Suez Canal," said Michael Storgaard, a spokesman for Maersk Line, the world's biggest container shipping company. Even so, it is too early to say whether Maersk will route more vessels through Suez, he said.
Still, any future economic payoff is trumped by the political implications for the government from building confidence in El-Sisi's leadership.
Obviously, El-Sisi is trying to gain legitimacy through his government's achievements. His thinking is that Suez "shows the government can deliver, it can commit to something and get it done".
Perhaps this "wasteful expenditure" has some silver lining which other African leaders can borrow a leaf from?

Monday, 26 October 2015

Case for forward-looking approach to port development

Cross River State indigenes were full of delight on Monday when President Muhammadu Buhari flagged off construction of the 260-kilometre Calabar-Kastina-Ala Super Highway road project at Obung.
According to the President, the road which will link south-south and northern parts of the country, when completed, will also ensure a reduction in travel time and man-hour. He described the project was a significant milestone in the economic transformation agenda of the state.
The equally excited state governor, Professor Ben Ayade who globetrotted to get foreign investors to invest in the road project, also disclosed that the state would embark on the construction of a deep seaport in Bakassi. So in addition to a reduction in travel time and man-hour, the road would serve as the artery for evacuation of cargo from the proposed port.
The part that excites me is the fact that the Cross River State government is planning ahead for evacuation of cargo even before construction of the proposed deep seaport has started. This is different from what we have seen with regards to the proposed Ibaka deep seaport which the former Akwa Ibom State governor, Godswill Akpabio championed.
While Akpabio claimed that construction work on the deep seaport project had started, the roads leading to the site is practically non-existent. It took us over three hours of travel through deep potholes, craters and gullies to complete a 20km trip from Uyo to Ibaka when I led a group to the site about two years ago. It was a sorry state. I wondered if that was the road Akpabio planned for trailers and other heavy-duty trucks to ply during the port construction work. And did he hope to build the port before building the roads? No sir; it doesn’t work that way.
The major challenge we have in Apapa right is poor road infrastructure which has made life hellish for truckers and commuters.
And that is why I am concerned also about the Lekki deep seaport which has been under construction for over five years.
The development of the Port at Lekki is certainly a most welcome initiative since it will bring a huge boon not only to the economy of the state but that of the entire nation. It goes without saying that a viable deep seaport project will create close to half a million direct and indirect jobs for Nigeria’s teeming youths.
Container throughput at Lagos ports is expected to hit two million twenty-foot equivalent units (TEUs) by 2018 whereas the maximum capacity that the ports and the Inland Container Depots (ICDs) in the State can accommodate is 2.2 million TEUs.
Lagos ports alone handle 90 per cent of the cargo in and out of Nigeria. With this expected growth in container volumes, the combined capacity of Apapa Port fully-developed and Tin Can Island Port and all the Inland Container Depots (ICDs) in the Lagos area is expected to be inadequate within the next five years. The same situation also applies to general cargo terminals.
A new port will therefore be needed to keep up with the demand for capacity, as the existing ports are surrounded by the city and cannot be further expanded.
The natural location, the supporting infrastructures and the support of stakeholders are key success of a greenfield port.
In choosing the location of a Greenfield port, the factors that must be considered include natural deepwater and harbour and supporting navigational channels with commensurate draft.
Other factors include lower risk of encroachment of city development in the immediate future, connection to multimodal infrastructure for evacuation of cargo by road, rail and barge, government support to the investors with policies that will protect investments, presence of adequate supporting services and review of cargo clearance processes to support faster cargo evacuation and reduce dwell time.
Lekki has the natural features for a port, no doubt. Natural harbours have long been of great strategic naval and economic importance. They reduce or eliminate the need for breakwaters which would ordinarily cost a fortune to construct. Some examples of natural harbours are New York City harbour in the United States; Kingston Harbour in Jamaica; Subic, Zambales in the Philippines; Sydney Harbour in Australia; Pearl Harbour in Hawaii; San Francisco Bay in California; Visakhapatnam Harbour in Andhra Pradesh, India; Killybegs in County Donegal Ireland; and Halifax Harbour in Nova Scotia, Canada.
The proposed Port at Lekki is surrounded by the lagoon and you can go in and out of the port area through only one way. Because the Lekki axis is largely a residential area, vehicular traffic in and out is very heavy without the added burden of trucks plying that route.
What will happen when trucks join the fray on the road is better imagined. Due to this constraint and in the absence of a rail system, evacuation of containers from the Lekki Port to the Western part of the country will be very difficult if not impossible. You can’t move goods up north either except a new bridge the size of the Third Mainlaind Bridge is constructed around the lagoon.
Trucks evacuating goods from the port however can head for the Eastern part of the country but then, they will have to travel almost 100 kilometres to link up the Benin-Ore road. Movement of goods out of the port through barges is not an option either because Lekki is backed by a very broad and shallow lagoon; making barging difficult.
The cost of building a new port cannot be underestimated with about USD1.5 billion (about N300 billion) required for investment in quay wall, quay apron, terminals, cargo handling equipment, information technology etc. Potential investors and financiers will certainly be interested in good return on investment, but this might take a very long time if thoughts are not given to adequate cargo evacuation modalities.
Perhaps the promoters of the port would want to borrow a leaf from the Cross River State model.

Monday, 19 October 2015

Of Presidential spokesmen and poor public relations skills

Femi Adesina trended last week for the wrong reasons and with many Nigerians lashing out at him on twitter.
Several uncomplimentary comments about the presidential spokesman on twitter underscore the importance of effective public relations training for would-be occupiers of that office.
Adesina’s posts on Buhari not being appointed Minister of Petroleum and of age not being a yardstick for measuring performance in governance on the side of ministerial nominees sparked off criticisms from Nigerians.
“Femi Adesina is in this govt just to verify his Twitter account…”, “Femi Adesina needs a proper Public Relations professional to coach him. I could help but my service is very expensive!”, “Femi Adesina and his beer parlour tweets …It is not good to mix ogogoro and kunu this FEMI dude needs upgrading”, “When you hear Femi Adesina you remember wailing wailers”, the comments went on and on.
Adesina’s transgressions were his tweets on ministerial appointments: “#ministers People who have been nominated are qualified and are Nigerians. Talking of age, there is a saying that age does not matter”, “#ministers We must rather talk of the mental age rather than the chronological age. It is not the chronological age that matters…”
Adesina had absolutely no reasons to have fired those posts. They were unprovoked and unnecessary. And perhaps he doesn’t know, Nigerians are becoming disenchanted with the new government. I suppose the euphoria is over and reality is gradually setting in.
It was Adesina’s second major gaffe in a month. When Buhari visited Ghana on September 7, rather than focus on the crux of the President’s visit, Adesina posted tweets on Aburi.
“Aburi (pronounced Ebri by Ghanaians) is about 30 minutes trip from Accra, and hosts the Peduase Lodge, used by the President to host guests”. Nigerians would have none of that. He was branded Ghana’s Minister of Culture and Tourism.
We all remember how Reuben Abati lost the respect he earned over a 10-year period in four years of serving as President Jonathan’s spokesman. The former Guardian newspaper columnist and editorial board chairman is still struggling to warm himself back into the hearts of Nigerians five months after leaving office.
Segun Adeniyi did not fare any better in his sojourn at the presidential villa under late President Umaru Yar’Adua.
Femi Fani-Kayode and Dr. Doyin Okupe were total calamities as presidential mouthpieces. They earned contempt and ridicule not just for themselves but for their masters also.
None of the presidential spokesmen mentioned above qualified for the job. That Adeniyi, Abati and Adesina excelled as media men is no guarantee they would do well as public relations managers. In fact, history shows the reverse will always be the case, except for those who deliberately acquire PR skills.
Having started my career in journalism, I know all too well the love-hate relationship PR professionals and journalists have with one another. And I know that journalists don’t always make the best PR professionals.
PR looks like a promising career for someone with great contacts and the ability to tell compelling stories. A PR trainer recently said she feels journalists come to PR with a “communication culture of false urgency,” and a lack of appreciation for the “depth and reach of what reputation management really entails.” This sentiment resonates with a lot of us. I know many journalists who enter PR with stellar contacts, superb storytelling skills and a well-honed, experienced knowledge of the media business. They know how to sell a story – in the newsroom. Yet how many know how to pitch new business to a client? Or perform market research to develop a strategic communications plan that improves awareness of a product or service? Or even know that public relations has an industry code of ethics?
I believe both journalism and PR share a common interest of communicating clearly with the public. Both require a curiosity for news and an ability to tell story in a most compelling way.
To be sure, many PR professionals (like yours sincerely) got their start in journalism, or were educated in journalism schools. They know and respect the realities and challenges reporters face daily. Journalism experience can provide important entry-level training for a PR manager but most journalists fare poorly in public relations because they fail to realize that media relations is just one of many areas of communications and public relations.
Good journalists have the news judgment to know what stories to pitch, they write clear, compelling and accurate press releases, they have an appreciation for deadlines and their media connections are impeccable. All of which are terrific assets … if you’re planning to spend your entire day pitching stories. But that isn’t the reality of modern public relations. Not by a long shot. It takes a lot more than contacts to be a successful communicator.
If PR is the planned and sustained effort to establish and maintain goodwill and mutual understanding between an organisation and its publics, then at the heart of public relations is a detailed understanding of who those publics are, how they think, and what they consider important.
We live in interesting times, with economic technological and political developments all combining to form a perfect storm. Nigerians are on edge and the Presidential spokesman must not only appreciate this, but be properly schooled in the art of communicating with the President’s public – not as a journalist now – to stave off the kind of attacks, odium and ridicule we’ve seen buffeting Femi Adesina of late.

Monday, 12 October 2015

Where are Aganga's Made-In-Nigeria cars?

Former Minister of Industry, Trade and Investment, Olusegun Aganga will be remembered as the man who destroyed the operations of RORO ports in Nigeria and championed the diversion of Nigeria-bound vehicle imports to the ports of neighbouring countries.
Aganga also helped fuel smuggling and facilitated the sack of several hundreds of Nigerians at the ports through his selfish and ill-conceived National Automotive Policy.
Several well-meaning Nigerians raised their voices of wisdom advising against the implementation of the controversial policy but was self-opinionated and strong headed.
When the auto policy was introduced by him mid-2013, he deceived Nigerians into believing that within six months, Stallion Motors, Nissan and others would begin to assemble cars in Nigeria. That did not happen.
On May 29 2014, Aganga and his gang presented so-called assembled in Nigeria SUVs to President Goodluck Jonathan as ‘Democracy Day’ gifts.
The three vehicles presented to the President said to have been produced at the Stallion Nissan Motors Plant located on the Lagos-Badagry Expressway included a Nissan Patrol SUV, Nissan Almera (Sunny) saloon car and a Nissan NP 300 Pick-Up.
The company claimed that it was ready to roll out 45,000 units of vehicles annually but apart from those three; no Nigerian can claim to have seen any such car on the road. There are doubts if those were actually ‘made’ here. This is so as the Nigeria Customs Service has accused several so-called auto assembly plants of less than noble conducts. They import fully built units of vehicles under the guise of SKDs or CKDs to take advantage of loopholes in the ill-conceived policy.
I was in London on June 23 last year at a seminar on “Business in Nigeria” organised by the Financial Times and the Nigeria Customs Service, where Aganga tried desperately to sell the policy to the international community. He again claimed that the policy has attracted 14 Original Equipment Manufacturers (OEMs) to the country who were ready to “roll out before the end of the year”. It is more than one year yet nothing.
The case has been said of a company which imported over 200 units of fully built vehicles, without tyres, and declared them as semi-knocked down units in order to benefit from the huge tax rebate put in place by the federal government as part of the automotive policy to encourage local assemblage of vehicles.
There are two degrees of SKD, known as SKD1 and SKD2. Most local vehicle assembling plants in Nigeria at the moment are using SKD2, with very little local content, but they pay shortchange Nigerians.
SKDs attract 10% tariff while fully built units attract 70%. So they remove the tyres only and claim SKD. They then import the tyres separately. This is Aganga’s auto policy.
Car dealers and mass transit companies now import their vehicles using this trick. They all lay claims to being auto assembly plants. It is fraud at its highest level. So the big guys pay 10% while the small time importers pay 70%. Those that do not want to pay 70% diver their vehicular cargoes to Cotonou Port and smuggle into Nigeria.
The prices of vehicles shot up more than 40% since Aganga’s infamous policy. For example, a new KIA Piccanto car that sold for about N1.6million before the introduction of the loathsome policy now sells for N2.2million while a Hyundai Elantra which cost N3.3million now sells for N4.9million.
The Aganga gang even went as far as deceiving Nigerians that very soon, local production won’t only meet local demand but will be sufficient enough for export.
Aston Motors, Dana Motors Ltd, Basco Nigeria Ltd, Coscharis Motors Ltd, General Appliances (West Africa) Ltd, Globe Motors, Hyundai Motors Nig. Ltd, Kewalrams-Chanrai, Nigeria-China Auto Manufacturing Coy Ltd, Nigerian Sino Trucks Ltd and Origin Automotive Works all lay claim to being auto assembly plants.
Aganga and his boss took Nigerians for a ride. The auto policy has increased the rate at which cars are smuggled into Nigeria with our ports losing close to 70% of their vehicle cargo traffic to Cotonou Port. And the vehicles landed in Cotonou eventually find their way into the Nigerian market. The implication of this trend on is grave not only on Customs revenue but on the income of the Nigerian Ports Authority, terminal operators, port workers, freight forwarders and haulage firms.
History tells us that this policy will not work. We have gone through this route before and it failed but Jonathan and Aganga would not listen to the voice of reason.
One is wont to wonder whose interests Aganga really tried to protect.
President Muhammadu Buhari should come to the rescue. Nigerians are suffering as a result of this obnoxious policy. It should be suspended while import duty on vehicles revert to 20% flat for everyone. Preferential or differential duty rate must be scrapped immediately
We want to see these ‘auto assembly plants’ begin to truly roll out made in Nigeria vehicles.

Monday, 5 October 2015

Now that Buhari's noisemakers are here

The President called Ministers 'noisemakers' but he is bound by the Constitution to appoint at least 36 of them.
Section 147 of the 1999 Constitution compels the President to appoint Ministers from all 36 states of the federation while Section 148 spells out the functions of the Ministers and makes it clear that he must meet them regularly.
So the President has to live with these 'noise makers' for the life of his administration.
Ministers and civil servants have their jobs clear cut out for them by law. None can take the place of the other, but obviously Mr. President thinks otherwise.
We yearn for change in the maritime industry and Mr. President will make this change a reality by appointing a competent noisemaker as the Minister of Transport.
I think the transport sector has been largely suffered a wretched fate under this democratic dispensation with non-experts given the task by successive governments to pilot the affairs of a highly technical sector.
Obasanjo in 1999 appointed Mrs. Kema Chikwe as his first Transport Minister. Chikwe had no idea how the transport sector runs. She is a radio journalist, editor, publisher and politician. She would have done better in NTA.
Chikwe ended up being dubbed 'Minister of Port' as she concentrated all her attention on the ports, not even the maritime industry.
Then came Ojo Madueke in 2001. Ojo's idea of moving the transport sector forward was to ask Nigerians to ride bicycle to work.
Critics told Madueke that Nigerian roads were unsafe for such venture but he would not listen until a bus pushed him himself into a ditch while he was cycling to work. End of bicycle campaign.
Next came Abiye Sekibo. The Rivers State born medical doctor and politician was appointed in 2003 at the beginning of Obasanjo's second term.
While Sekibo was a novice, a lot of initiatives and reforms took place under him largely because he listened to stakeholders.
In August 2003, Sekibo said the Federal Government was considering a scheme to support local shipping in the oil and gas industry. The 'scheme' turned out to be the Coastal and Inland Shipping Act aka Cabotage Law which made coastal trade the exclusive preserve of ships owned by Nigerians.
He also piloted Obasanjo's port reform programme, which increase private sector involvement in port operation by making reputable private operators responsible for terminal operations.
Diezani Allison-Madueke succeeded Sekibo. She was appointed by Late President Yar'Adua in 2007. She will be remembered as the Transport Minister who wept after being caught in the notorious Apapa gridlock for several hours.
Many will however remember her more as Nigeria's most powerful Petroleum Minister under the administration of Goodluck Jonathan.
Ibrahim Bio, a pharmacist from Kwara State, succeeded Allison-Madueke.
Bio was appointed Minister of Transportation on 17 December 2008, replacing Allison-Madueke whom Yar'Adua transferred to head the Ministry of Mines and Steel Development.
When Goodluck Jonathan became Nigeria's Acting President in 2010, he replaced Bio with Yusuf Suleiman – a politician and former civil servant. While he cannot be described as an expert, he worked as a deputy director in the defunct National Maritime Authority (NMA).
Suleiman occupied the position from April 6 2010 to July 10, 2011 when he was deployed to the Sports Ministry after an altercation with Patrick Akpobolokemi, then Director General of the Nigerian Maritime Administration and Safety Agency (NIMASA).
Suleiman reportedly recommended in December 2010 that Akpobolokemi and the NIMASA board be sacked, claiming they were guilty of abuse of office. That was his undoing, because the NIMASA DG was Jonathan's boy.
Jonatrhan appointed Senator Idris Umar to replace Suleiman. A Gombe State born lawyer and politician, he knew little about the transport sector but he played the politics and survived for more than four years in the post. But there wasn't any added value recorded.
Seven Transport Ministers in 16 years of our new democratic experiment speaks of some level of instability and possible policy inconsistencies as each Minister – with an average tenure of 2.3 years - came with his/her own agenda. There was no 'master plan' that was being implemented or followed through.
What we want going forward is a Transport noisemaker, sorry Minister that will adopt a holistic approach to Nigeria's transportation challenges.
We need a 25-year master plan for integrated transport infrastructure development. A master plan than will clearly identify current and future mobility needs and create a strategy to address same.
We also want a noisemaker that will understand the place of the shipping sector in economic development.
In the short term, Apapa needs urgent attention. The port city is under threat – threat from ubiquitous petrol tank farms, threat from terrorist attacks and threat from debilitating traffic gridlock.
The next Transport noisemaker must urgently rise up to this. And I hope for once, we'll have a transport professional appointed into that office.