Nigerian Shippers’ Council: Entrenching globalisation through port reforms

The Executive Secretary/CEO, Nigerian Shippers’ Council (NSC), Mr. Has­san Bello in this presentation highlights the role of NSC as the economic regulator of Ni­gerian ports and its effect on the industry and the national economy.

A vacuum

After the implementation of the Federal Government’s port reform programme which led to the concession of port terminals to private operators, the Govern­ment noticed a disturbing vacu­um in the sector, namely, absence of an Economic Regulator that will act as a referee in the indus­try. This vacuum has made it dif­ficult for the nation to enjoy the gains of the programme.

The inefficiency in the proce­dures and operations of agencies and service providers and even users is adversely affecting and undermining Nigeria’s competi­tive advantage in international trade.

In a deliberate remedial effort the Federal Government in Feb­ruary 2014 appointed Nigerian Shippers’ Council the Interim Economic Regulator for the ports sector.

Boosting investments

Economic Regulation is an at­tempt by Government to moni­tor and correct any disorder in the working of a free market to address anti-competitive behav­iours.

Economic regulation focuses on: Market Rules; Tariffs; Quality of Service; Access and Incentives regulation.

Going global

The global competitiveness of Nigerian Ports has a major role to play in the attraction of For­eign Direct Investment. Port Re­form no doubt has brought in tre­mendous benefits to the national economy. However, there is still the need to harness other poten­tial areas of the Port Sector with a view to bring down the cost of doing business and enthrone ef­ficiency.

Nigerian Shippers’ Council was appointed the Port Econom­ic Regulator mid-way after the Ports and Terminals were conces­sioned.

The Nigerian Shippers’ Coun­cil recognised the fact that there existed gaps in the Port Sector and this led to increasing clamour for an Economic Regulator by stakeholders. In our capacity as the Port Economic Regulator, our role is to consult, coordinate, moderate and harmonise the var­ious processes and procedures with a view to achieving opera­tional efficiency at our ports.

The task

To assess options for competi­tion; To decide on entry rules; To regulate on pricing freedom and to monitor outcomes.

Enforcement and efficiency

Where there is unreasonable resistance, we shall not hesitate to apply appropriate sanctions to ensure compliance.

We shall remain open, indepen­dent, neutral and consultative and all decisions will be based on the buy-in of stakeholders. Finally, we wish to note that NSC is not competing with any other Government Regulatory Agency but thrives to actualise the man­date of making our Ports the Sub-Regional Hub and International Logistics Centre.

An efficient and effective regu­lator plays the following roles: Analysts/Strategist; Advocate; Detective; Prosecutor; Judge; Ne­gotiator; Educator; and Manager.

Effective regulation requires much more than just competent economic and financial analysis but must also manage often com­plex interaction with the regulat­ed firms, consumers, politicians, courts, the media, and a range of other interests; Regulators need to provide a level playing field amongst competitors; A Regu­lator needs to be independent, transparent, legitimate and cred­ible;

Managing the transitions to a competitive market is a major regulatory challenge; the regula­tory process should be fair to all parties (procedural transparency, lack of arbitrary decisions, bal­ancing the needs of stakehold­ers). Professional development of staff of regulatory agencies is essential.

Enhancing reputation

The involvement of stakehold­ers is an important source of le­gitimacy and public acceptability for regulatory agencies and their decision-making procedures.

Communication: information to stakeholders on timely and ac­cessible basis;

Consultation: stakeholder par­ticipations in meetings promotes legitimacy;

Consistency: across market participations and over time;

Predictability: a reputation that facilitates planning by sup­pliers and consumers;

Flexibility: use appropriate in­struments in response to chang­ing conditions; Independence/Autonomy- free from undue po­litical influence;

Effectiveness and efficiency: cost effectiveness emphasised in data collection and regulatory policies;

Accountability: clearly defined processes and rationales for de­cisions and clear appeals proce­dure; and

Transparency: openness of the process.

Effect of economic regulation on regulated entities in the trans­port and logistics chain:

(1) Seaport terminal opera­tors

Protection of their investment from undue interference leading to: Guaranteed Return on Invest­ment; and Increased Profitability; Predictability in processes and procedures.

(2) Government

Improved Revenue Generation; Improved Infrastructural Devel­opment; Creation of Efficient Market; Reduction of cost of do­ing business; Improvement of the Nation’s Global Competitive In­dex and consequent attraction of Foreign Direct Investment (FDI).

(3) Shipping companies

Improved Delivery of Marine and Terminal Handling Services leading to: Reduced Turnaround Time of Vessel; Reduced Cost of Vessel Operations; Improved Im­age due to increased Customer Confidence.

(4) Freight forwarders

Professionalisation of Freight Forwarding Practice leading to: Elimination of Touting; Sanitisa­tion the Port Environment; and Promotion of Global Linkages; Harmonisation of Clearing Pro­cesses and Procedures and the consequent reduction of clearing charges; Strengthening of Com­plaint and Arbitration mecha­nisms.

Other Regulatory Agencies

Nigeria Customs Service (NCS)

Improved Revenue Generation; Enthronement of clearer Stan­dard Operating Procedure (SOP) derived from International Con­ventions and Practices; Transpar­ency, Efficiency and Effectiveness and consequent improvement in Image; Improved Level of Com­pliance by Importers, Exporters and Freight Forwarders. Effect of Economic regulation on truckers

Decongestion of Port Access Roads leading to Improved Truck Transit Time at Ports; Re-Fleet­ing of Rickety Trucks; Instal­ment of Electronic Gating and Call System; Guaranteed Loading Opportunity for Truckers.

Objective

Finally, we wish to note that NSC is not competing with any other Government Regulatory Agency but thrives to actualise the mandate of making our Ports the Sub-Regional Hub and Inter­national Logistics Centre.

On this note we call for the sup­port and cooperation of NPA, NIMASA, NCS, NIS, SON, NAF­DAC, Nigeria Police, and all other stakeholders. We shall also rely on the political will and support of Government to enable us suc­ceed in this our assignment.