Govt losing billions to lack of coastal rail line – ICNL CEO
The Managing Director and Chief Executive Officer of Inland Container Nigeria Limited, Mr Ismail Yusuf, speaks to Anozie Egole on the challenges confronting the maritime sector, among other issues
How would you describe 2022 in the Nigerian maritime industry?
The year was not good for the maritime industry. It was full of problems. For instance, the economic situation of the country does not support the maritime business. When you look at government policy in terms of forex, you will find out that it is not available. Despite the fact that we have some items banned even those ones that were not banned cannot easily access forex. And secondly, the rate was too high that it affected a lot of people. It reduced the volume of cargoes that came into the country. The Customs policy regulating import duties wasn’t friendly. Almost every two to three months you will hear that the duty has been taken up. So, it affected my customers.
Then, apart from that, you look at the transportation sector. The government is working on many roads but when you look at the roads that are being used by transporters who move goods from the seaports from the southwest and south-south up north, these roads are bad. They need attention. They need to be worked on quickly so that motorists can enjoy the movement of cargoes from the seaports to the hinterlands of the country. Then you consider the use of railways, even though we know that we have the narrow gauge that connects the ports to the north, it has been abandoned. For more than two years now, it has not been used by the Nigerian Railway Corporation. And the people who constructed the railway from Lagos to Ibadan are not working on carrying goods. What you see are rail lines constructed for carrying passengers. And you know, carrying of passengers alone cannot fetch enough money for the government to recover the money spent on constructing the railway. So, the Federal Government needs to look into the procurement of wagons that would enable us to move our products from the seaports to the hinterland freely.
You said the narrow-gauge line has not been in use for two years now. How has it been affecting your businesses?
If the narrow gauge has not been in use in the movement of cargoes from the seaports to the far north, we will continue to rely on the roads. You know trucking now is very expensive coupled with the cost of diesel that has been going up every day. Before now, we used to do spend about N600,000 to N700,000 to carry a 40ft container from Lagos to Kano but it is currently N2m. So, if the rail is there and working, it won’t be more than N700, 000 and the government will make money. We will also make money and the beneficiaries who are our customers will be happy because the cost of transportation would have been reduced in their bills.
Now that you spent so much transporting these cargoes, how much did you lose to the nonavailability of rail at the ports?
The loss is huge. Because of the unavailability of rail to move our cargoes from the coastal area that is the ports to the terminals around, we lost over N9bn in 2022.
Looking at the year 2023, which area do you think the government should focus more on?
My advice to the government is to reconsider the policies in the maritime sector in terms of the importation of items into the country. Take for instance, they should consider how importers can be able to have access to forex to enable them to bring items into the country so that we can have something done. This will increase the volume of our activities and the government will also get more revenue in terms of duty collection. Secondly, they need to look into the narrow gauge as I said earlier. Government cannot say this because it has new standard-gauge lines and then abandon the narrow-gauge lines. The old ones can still work. If there are problems with it, the government should allocate funds for its maintenance. I see no reason why the government should abandon it when we have not gotten a replacement for it. They should work on forex, rail and roads so that those who also want to make use of the roads should have also good roads to move their cargoes.
Recently, the Nigeria Customs Service in collaboration with the Federal Ministry of Finance launched scanners for cargo examination. How has this impacted your business?
As far as I am concerned, it is the policy of the government to have a scanner in the port and there are reasons behind that. It is a good development as it makes the movement of our cargoes from the seaport to terminals easy. It also helps to ensure transparency in cargo clearance. The government also gets its revenue at the end.
In a view to stopping the issue of extortion at the port corridor, the Ports Standing Task Team was established. How would you access the task team?
For me, it is a welcomed development. You know we were the people complaining about all the excesses of some people and the government agency listened to us and established the task team to sanitise the system. So, it is a welcomed development and it will bring sanity to the ports. The establishment of the task team is a welcomed development because the government did that because of our request and they have answered our prayers in sanitising the system. It will bring improvement in the ports. It will rid the ports and their corridors of extortionists.
With all the challenges in 2022, how many containers were you able to handle last year?
Well, last year we were able to handle 15,000 20 equivalent units. I will say that my performance for last year stood at 75 per cent from the 85 per cent minimum capacity we used to record in previous years. So, our performance dropped.
As the first dry port in Nigeria, what are your strategies to remain at the top?
I cannot say we are at the top because we are the only ones for now. Others are coming up. So, it is until all of us are in operation that is when we can say who is at the top or not.
NPA last year inaugurated five export terminals for agro-exports. How has that helped your operations?
It is a welcomed development. It will reduce a lot of encumbrances in the port. The terminal currently has a command saddled with export responsibilities only. And I have been in touch with that comptroller and we have been discussing how to make things easier for our customers. He has assured us of giving his support as required. So, it is a good development because it will enable exporters to get their cargoes at the port in good shape and on time. The process we had before was so cumbersome that before you complete the processing time was gone. You have to wait for another turn before your cargo can be moved. It was discouraging but these newly established export terminals will reduce the bureaucracy and make exports good.
What is the level of patronage at the ICNL?
We are enjoying enough patronage. We don’t have a problem. For those that are not around the seaport, you will discover that even when the port is filled to the brim, you discover that the terminal operators move their goods to bonded terminals around. So, Nigerians need more of these terminals nationwide so that it will boast the sector. For instance, from Lagos to Katsina is about 1,350 kilometres. If you have a bonded terminal in Katsina, importers will not have to travel these numbers of kilometres to get their goods cleared from the ports. So, if they have these bonded terminals closer, they don’t need to travel this far to do their clearing and get their goods to their warehouses. So, as far as the government is talking about the ease of doing business, these are some of the things the government should also be thinking about.
Do you think the current agro sector’s performance is good enough looking at the intervention from the Central Bank of Nigeria?
I would say that the intervention from the CBN is a step in the right direction. That is if the people that are supposed to have access to it are getting it. Because if they don’t politicise it, if they make it available to the agro-industry, they will use it properly and before you know it, it will start growing the economy of the country and all this hunger will reduce.
There are complaints by some shipowners that the nation does not have enough cargo for export. Do you think we actually have enough cargoes for export?
It is not a one-day job. Let me tell you. If you compare what we have now with what we had say two or three years ago, the export that has gone out of the country is higher than the ones that went out say two or three years ago because the government is already encouraging people to go back to farming and boast the sector and earn more foreign exchange. This is because the hard currency you will get it can be used to bring more foreign currencies back to the country instead of sourcing for forex. So, you will discover that many ships are now going out with some agricultural products like hibiscus, sesame, among others.