BusinessExecutivesHadiza Bala Usman: The NPA was considered a cash cow

Wed,26Sep2018

Posted on Thursday, 23 August 2018 13:22

Hadiza Bala Usman: The NPA was considered a cash cow

By Charles Idem in Lagos

TAR102 p78
In two years, Bala Usman has started sweeping a clean broom through Lagos ports, but she has a long way to go before Nigeria can become a logistics hub for the region

 

Motorists in Lagos are well aware of the problems facing the city’s twin ports. For more than two years, hundreds of parked trailers have lined the highways leading to the gates of Apapa and Tin Can Island. Of Nigeria’s six sea ports, which are situated in four states along the country’s southern coastline, the Lagos pair are the busiest, accounting for 75% of all the cargo that is shipped in and out of the country.BIO

Lagos’s ports are also reputed to be a den of large-scale racketeering involving both public officials and private operators. And, despite some infrastructure improvement over the past two decades, both ports fail to keep up with the exponential growth of cargo.

The snarling traffic jams out of the ports are a grim symbol of the task faced by the Nigerian Ports Authority (NPA). Hadiza Bala Usman – an activist and former chief of staff to Nasir El-Rufai, the governor of Kaduna State – has managed the federal agency since July 2016. President Muhammadu Buhari tapped her to accelerate port reforms that have been bogged down since the transition to a concession model in 2007, which gave the NPA oversight over private port operators.

Though the concession model has certainly improved the situation, it is far from ideal. At the conclusion of the initial stage of the government’s reform programme, the country’s ports were carved out into 26 concessions won by terminal operators such as A.P. Moller-Maersk and Julius Berger. Overall cargo throughput grew by 73% from 49m tonnes to 84m tonnes between 2006 and 2014, before dipping following a recession that started in late 2014.

The waiting game

The volume of cargo recovered to 71m tonnes in 2017. Cargo dwell time – how long ships wait to unload – initially dropped from around 30 days prior to the reforms to an average of 20 days in 2010, according to a study by the US Agency for International Development. It stood at 22 days in 2017, says a study carried out by the Abidjan-Lagos Corridor Organisation, which is amongst the highest port wait times in the world. The slow progress suggests the new regulator has yet to fully find its feet.

The NPA had always been a favourite of leaders looking to dispense patronage and grant favours. That is going to change, Bala Usman tells The Africa Report: “The NPA was considered a cash cow. [But we] will not be that agency that is seen to finance political activities or to be where politicians gravitate to in seeking funds or having access to patronage.”

One of her first moves was an audit of the NPA. Some N11bn ($45m) was missing. The investigation revealed the funds were stashed in a number of commercial banks, violating regulations.

Bala Usman also uses sunlight as a disinfectant. She signed a two-year partnership with BudgIT, a civic organisation that advocates for open government, to make the NPA budget public. Critics wonder how sustainable this transparency will be after her time is up. But Bala Usman is convinced that the move sets a strong precedent. “I think having already taken that step, it might be challenging for anyone that comes in to sort of reverse it. That would mean that you want to operate an opaque system.”

Next on the agenda was the enforcement of concession policies. The concessionaire arrangements that the government had entered into with terminal operators was premised on the idea that competition would drive efficiency. That only works, however, if the arrangements are entered into fairly. One case involving Intels, a logistics company partly owned by former vice-president Atiku Abubakar, demonstrated how the NPA had favoured certain operators over others. In 2017, the government moved to end Intels’ monopoly on oil and gas exports. Oil and gas shipments can now berth in any of the multi-purpose or bulk cargo terminals, including the likes of the Lagos Deep Offshore Logistics Base (LADOL).

One-stop-shop ambition

Some will see this as attacking political rivals and boosting allies – Atiku wants to be Nigeria’s president, while LADOL has been supportive of Buhari. Others say it is simply allowing market forces to operate.

Regardless, while the policy fix has introduced more competition, there remain many other problems. Clearing cargo is still onerous. Reducing the number of agencies required to carry out checks would help. So, too, would a ‘single window’ mechanism, to allow all supervising agencies to share a common platform for inspecting cargo.

Bala Usman is championing both initiatives, but other agencies are proving resistant. Insiders say the customs services are opposed to a one-stop-shop platform. To break the deadlock, she is considering a unilateral deployment of a ‘ports community platform’, which mimics a single window.

But she concedes that port probWe will not be that agency that is seen to finance political activities”lems will not be fully resolved until there is a one-stop shop: “If we are not able to have single window, we are not there yet when it comes to trade facilitation. Our neighbouring countries have single windows, so what is it that is challenging us from implementing that?”

After this, the next pressing issue is how to get containers out of the ports. The bulk of the country’s cargo passes through the Lagos ports, and most of the goods are evacuated by road through the city. The trailer traffic pushes up Lagos’s collective blood pressure, with residents and businesses suffering major disruptions.

The main roads that lead to the Lagos ports are in tatters, the legacy of decades of neglect. To fix them, the NPA helped to get the works ministry and Dangote Group, which has its flour mills in the area, to work together to rehabilitate the roads. The NPA has committed N1.8bn to the project.

The reconstruction kicked off last year and is near half complete. Longer-term solutions are being developed, such as bringing rail and inland waterways into the mix, says Bala Usman.

Considering the country’s location, Nigeria has often been tipped to be a potential transhipment hub for West and Central Africa. But Bala Usman says Nigeria needs to walk first before running. “The ports need to be competitive for our own use even before we look to being a hub,” she concludes. 

“We will not be that agency that is seen to finance political activities”

From the July / August 2018 print edition

Photo: Hadiza Bala Usman: Managing director, Nigerian Ports Authority
Credits: Stefan HEUNIS/AFP

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