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Nigeria’s “other” big sector

Interview - July 4, 2012
Upper Reach interviews Ify Ananzonwu-Akerele, Director General of Nigerian Chamber of Shipping, who speaks frankly about Nigeria’s shipping sector and the synergies between both the private and public sectors and the local and foreign players

Goldman Sachs has identified Nigeria as one of the next 11 economies with promising growth in the 21st century. Despite this, there is a big misconception about how the international community perceives Nigeria, and the reality on the ground. What is the most important thing that people should understand about Nigeria?

Nigeria is a potpourri of everything, and a reflection of human nature. You have the highly sophisticated aspects to Nigeria, as well as the not so sophisticated. Nigeria is a very big country with a hugely dynamic populace that thrives in capitalism and entrepreneurship. Those who fought for independence were extremely dynamic, and this dynamism can be found throughout the population.
However the era of military rule has led to a lot of negative imagery about Nigeria. I personally do not think that Nigeria should worry about its image abroad. We should worry more about tidying up our image within, which will automatically reflect internationally. If things start working, and we appear to have a direction and focus, I believe that our image will change immensely. I am more concerned about making sure that internally we are totally on the right track.

Nigeria should strive to become the maritime hub of West Africa, but Nigerian ports are facing a number of serious challenges at the moment. What is your perspective?

Of course Nigeria’s focus is to become a hub, but whether we are a hub is another question. The challenges we face can be overcome, if we go back to the idea of tidying up internally. The Nigerian Ports Authority (NPA) is doing all they can to ensure the success of privatisation and concessions of the ports, because they understand that the private sector has to be involved in the exercise for it to be fruitful.
I believe that Nigeria can be a very busy port. We could automatically become the hub by virtue of our economic size and national location. However we have a long way to go to earn that position. If we can fully embrace privatisation with less government (NPA) interference in the running of the ports, plus new and enabling laws, we should attain the role as the hub. We are already the biggest nation in West Africa. We are in a very strategic position, and we do have the capacity.

How would you evaluate the quality of dialogue between the private and public sectors, specifically in the maritime sector?

About ten years ago when the NCS was born, I would say the rapport between the private sector and public sector was not positive. When the Cabotage Law and more recently the Local Content law were signed, it dawned on the government that knowledge of these law needed to be advocated, promoted and implemented. So our organisation became very relevant to advocate, train and expand the knowledge and information.
As I said before dialogue between the private sector and the government was extremely confrontational for quite a while.

The NCS has played a bridging role in establishing a good relationship between the government and operators. We have also been instrumental in promoting, encouraging and insisting upon industry best practices, and meeting all of the requirements of the International Maritime Organisation. Membership of the NCS is open to both Nigerians and foreigners, which creates synergies, with the hope of technology transfer.

Nigerians can learn from their foreign partners. Maybe, for example in ten years’ time, the inequity will be erased and the foreign stakes could be sold to the locals. Rome was not built in a day, a fact that is being grasped by industry. We cannot build large vessels here yet, so we need to start slowly, and build small tugboats.

What is the key challenge on the way to full implementation of the Local Content Law, and Nigerian Content Development? 

What I always advocated is coming to the forefront now: that synergies between Nigerians and foreigners should be allowed. I am not talking about scenarios where foreign companies just put in place a Nigerian chairman that has no knowledge of the industry in order to fulfil the indigenous requirements. There should be full indigenous participation and in order to achieve this, continuous capacity building and training is needed. Foreign partners also take part in training and expanding the knowledge of their local partners.

Financing is getting a bit easier because financial institutions now understand the advantages in the shipping industry, especially in operations. Aside from just dry cargo, there are a number of long-term investments to be made in wet cargo. We also have international organisations that are quite ready to fund, at fair interest rates. It is a very gradual, slow process or meeting the challenges one by one, but the biggest one is knowledge and capacity.

We do not have shipyards; the only one is actually a French organisation, who is trying to comply with the NCD law and employing more Nigerians, and restricting their management. The shipyard can build very suitable vessels, and we are looking at how they can help grow ship building in Nigeria.

Capacity building is the main challenge. We need to train shipmates and other officers by putting them on vessels for at least six months. There is a need for properly equipped training institutions. Right now the government-run training academies are outdated and inefficient. I believe those training centres should be given to the private sector. Once the government decentralises, I believe that we can face the challenges. 

Would you advocate the creation of a ministry that took sole care of the maritime industry? 

Absolutely. It is so important, and I think that is what the government will look at next. Right now the Ministry of Transport is responsible for railway, and maritime transportation. I believe this will change soon.

We know that you have an on-going relationship with the National Content Development Monitoring Board. How are you affiliated to them, and what synergies do you share?

Before the Nigerian Content Act was passed and the NCDMB was put in place, there was the Nigerian Content Consultative Forum (NCCF), which was meeting regularly for about four years. We fully participated in that forum, and were part of the committee that dealt with the shipping aspect. When the Nigerian Content Act was passed, we worked closely with the National Assembly to finalise the document, and ensure that the entire maritime industry was carried along. It concentrated more on oil and gas, manufacturing, drilling, pipes, etc. almost leaving out the shipping sector.

Shipping is a very tangible aspect of the oil and gas industry fully included without the vessels you cannot move the crude. The Chamber played a very crucial role in ensuring that the shipping sector was fully included in the law. We were brought on to represent ‘shipping and logistics’ in the NCCF, which is part of the Nigerian Content Development Monitoring Board (NCDMB), we give them a regular update of the problems that our members have.

Nigeria receives 50 per cent of the foreign direct investment (FDI) coming into West Africa, which amounts to around US$6 billion annually. What advice would you give to fresh entrepreneurs looking to invest in the maritime sector in Nigeria? 

I would tell them to do their homework, and come to the NCS to get a really clear picture of the maritime terrain in Nigeria. The government will always paint an ideal picture, we will tell you the good and bad. If you are a prospective foreign direct investor, you should speak to other people here in the business. They should come on familiarisation trips to go around and see the country. Nigeria is a very complex, dynamic and interesting country, with highly intelligent and professional people here.

Your embassies can be a good resource. If after familiarising yourself completely you still want to take the risk, you will be well prepared, not that the Nigerian risk factor is as high as some may believe. The returns on investment here are great. There is a lot of money to be made here. It is a developing nation so you cannot lose out. The thing is to not plunge in headfirst. Keep your options open, because there is more than just the oil and gas sector. The maritime sector is a big sector. The best advice is to come in, do your homework, talk to the right people and make sure you have a good, trustworthy partner.