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Nigeria’s Ports: The gateway to a vibrant economy

Interview - December 17, 2012
Mr. Habib Abdullahi, Managing Director, Nigerian Ports Authority, says his country is like “a sleeping giant,” whose economy has an enormous potential beyond just the oil and gas sectors. But in order to realize that potential, there must be an uninterrupted flow of goods and services to and from the country, for which an efficient port system is a must

In an interview with World Report, Mr. Abullahi talks about plans to update Nigeria’s existing ports and develop new ones, and about the role of the private sector in this process.

Growth in key global economies such as Brazil and the US has slowed considerably, down to 2%. However, last year Nigeria’s GDP grew by 7.4%. The country’s growth is robust and sustainable. How do you feel Nigeria can continue to grow in the future at these high levels? How would you like to see the economy diversify into different revenue streams?

The National Ports Authority is one of the main players in the economy. From an economic perspective, two key determinants are the population and the robust expansion taking place in the economy. We are one of the main exporters of oil and gas in the world, and we have dormant agricultural sector capabilities. I think this sector can boost the economy. Secondly, quite a lot of people forget that there is an informal sector, and I do not think this sector is fully recognized. Anywhere you look, you will see that people are really determined to succeed with their commercial activities. That is what is driving the economy, and that is why we are not really feeling the credit crunch like other countries in the world.

The maritime industry is very important to Nigeria at the moment, the majority of international trade is actually done through the ports. Since we were last here in 2006, a lot of changes have taken place. Please tell us what has happened in the maritime industry since then?

Around the time you last visited, the Government decided to reform the maritime sector. We invited private sector to come in and take over the operations of the ports. The Government decided to adopt a model where we offer concessions to interested parties, and quite a lot of people applied. Actually, we reviewed about 114 applications and about 24 were accepted. A lot of the terminals in the ports were concessions, and companies were given the chance to come in and operate.

We (the NPA) play a regulatory role where we look at the operators; we provide infrastructure and security, and basic facilities. We take care of the channels and we also enabling environment for concessionaries. We collect revenue and pass it on for development. We also try and encourage others to come in and develop greenfield areas in the ports.
A lot of people have taken up the offer. As I said, we have about 24 concessionaries that are running the ports and others are setting up for developing new ports. I think it is quite successful.

What are the key projects that you think will define the maritime industry here in Nigeria?

One of them is the channel depth development project. Bigger ships mean more cargo and more activity, therefore more revenue coming to government. As a result, we will have more money to develop the ports. It is cyclical. Secondly, we also try to rehabilitate the existing ports so that we can take care of the existing shipping lines that are coming in. We are also ensuring that the key sites of the ports are maintained, and we try to maintain the roads near the ports. We have other concerns like the internal roads in the main ports. We try to encourage intermodal transportation as well, and the rehabilitation of the railway lines within the ports. It is only by doing that, will you move the goods that come in, in the most efficient way possible.

There seems to be a race in the maritime industry at the moment for a deep sea port, along the west coast of Africa. It is something that you are taking very seriously in Nigeria. Do you think there could be an operational deep sea port in Nigeria in the coming years?

Most of our ports are over thirty years old – even the newest port is over thirty years old. Therefore there are already limits. Quite a number of businessmen and investors are coming in. We have the Ibaka deep sea port, and the state government is coming up with an industrial city. It is located just outside Lagos, so investors are looking at it. They are looking at a port with a 16 m draught. I am not an expert, but I know that this can bring in bigger ships. One of the concessionaries in the Lagos Port is trying to develop another port just outside Lagos as well. These ports are deep sea ports which are coming up to deal with the overstretched ports in the Lagos metropolis. A lot of development is planned. Some consultants have been asked to come in to assess opportunities. a lot of them are really interested in putting their money in, on a PPP (public-private partnership) basis.

How would you like to see agencies like NIMASA (Nigerian Maritime Administration and Safety Agency) and NPA and the Nigerian Customs Service working closely together to create a more efficient and enabling environment at the ports?

On 23rd July, a committee was convened by the President who chaired the retreat. All the relevant ministers and stakeholders in the maritime industry were there. We were sitting together and working on how to revive and reform the maritime industry. After the retreat, a committee was set up, which is currently writing a report to bring together our conclusions. We are going to come up with a new reformed policy, which will carry us forward and see us through the next decade or two. That itself is going to take care of all these things you are talking about. There is a synergy between Customs and NIMASA, and you will see something about our new policing driving this even more.

There has been a great turnaround in the maritime industry since 2006, especially in terms of cargo clearing times and freight forwarding. Can you tell us about your idea of a one-stop cargo clearing facility here at the ports, and how close you are to the goal of 48-hour clearances?

We have already submitted a letter to the Minister of Transport, who supervises all transport activities. The port committee system is coordinating the activities of all relevant agencies within the ports, and that will give us a one-stop-shop. Haven already written to the Ministry, I am sure they have written for the presidential approval, and so we can implement this and discuss it. I believe we will achieve something. I do not want to preempt it, but the study has been submitted and we have written the necessary authorizations sought to get clearance for this one-stop-shop.

One dimension of working in the maritime industry is how global it is. Nigeria trades with every country and due to its strategic location, is one of the key traders in Africa. You have spent time working in London and international environments where you have been an ambassador for Nigerian ports. How have you looked to create a positive image and give a realistic view, and counter some of the perceptions out there regarding security in the water territories of Nigeria, and the efficiencies and treatment of goods within the Nigerian ports?

We are trying to reach out through publications and visits. For example, just two weeks ago, when the President went to the U.N. General Assembly, there was a conference at an African Round Table Event, where issues such as the maritime industry were discussed. I presented a paper on the role of the NPA and its potential for investors to come in. This week actually I will go to Washington DC with the Minister of Transport, and we are also going to showcase our own potential to other investors. We are looking forward to going to other countries.

If you look at it, I have been consistently going outside the country publishing and generating support for Nigerian maritime sector. This is the by-product of the reform which is coming up. We are going around and trying to sell Nigeria. A lot of people are coming in and are showing interest in developing facilities on the ground. We are harnessing interest and seeing who will come in. I also use the media, like this interview for example. Our Public Affairs Department is also coming up with some creative, innovative ways to convince and encourage people to come and see what we have to offer. We give NPA publications out all over London actually. I have to give kudos to the public affairs division for coming up with all these innovations.

Why should investors be excited when it comes to operating in the Nigerian ports? Why is it that the likes of APM Terminals have seen the huge opportunities, but others have not?

The entire African continent has a bad image. You only hear stories about arrests, kidnappings and the unfortunate incidents in the Niger Delta, or about air crashes. It is a country of great people and it is a great nation with nice, accommodating people, and huge potential. It is a huge market, with vibrant, nice and enterprising people. You can find Nigerians in almost every country of the world. They are all over, and they are very enterprising commercial people. Even the new port being developed here is being driven by APM. They are ready to invest more.

What areas should investors look at? What should they be looking to do?

I believe they should look at greenfield developments. There are some areas that have not yet been looked into, like social investment, such as hotels and tourism. If you look at the northern part of Lagos Port as you are coming in, that is not yet developed. We have a lot of virgin land, and people can come and invest there. There are a lot of opportunities. The more you look at it, the more you realize that Nigeria will be one of the greatest nations in the world in such a short period of time. This country is just like a sleeping giant.

And when the time comes, a lot of it will be down to the maritime industry. I am very glad to see that you are so passionate about it. What is your vision for the future of NPA? 

I hope to make this the greatest port, not only in Africa, but in the whole world actually. I want it to be a hub, because it is supposed to be. This country has a huge market, and it can be a feeder to other nations that surround it. We have six ports and another three are being developed. I am sure we will have ten soon, as another will be developed.

Is there a future for inland ports in Nigeria? Are you looking to concentrate on that in a few years?

Yes. It is not entirely my responsibility, but I can tell you that the country has a new Nigerian internal waterways authority. There are two great rivers in the country which divide the country into three parts, so there is a lot of potential in the country for internal waterways. The country has huge potential – we are just waiting for it to be tapped.