Joy Dimka, Senior Legal Officer, Nigerian Shippers' Council.
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Subjects of Interest
- International Trade
- Law and Society
Progress in the implementation of Nigerian port reform 15 May 2023
In 2013, the federal government commissioned a corruption risk assessment (CRA) on the Nigerian ports sector to be conducted by the Nigerian Shippers’ Council (NSC) in partnership with the Independent Corrupt Practices and Other Related Offences Commission (ICPC), the Technical Unit on Governance and Anti-Corruption Reforms (TUGAR), and the Bureau for Public Procurement under the umbrella of the Inter-Agency Task Team (IATT).
Following the assessment of the then-prevailing situation, the CRA outlined an array of measures to eradicate or minimise corruption at the ports. It created a harmonised Standard Operating Procedures (SOPs) and anti-corruption policies for port agencies and stakeholders. It also advised the creation of the Port Service Support Portal (www.pssp.gov.ng) to serve as a centralised complaints management mechanism. The CRA also developed a single process manual – called the Nigerian Ports Process Manual (NPPM) – which contains the harmonised, sequenced, and numbered steps required to implement each activity in the ports sector, from arrival and departure of ships to terminal operation, custom clearing of goods, and immigration.
The NPPM became the instrument for institutionalising the Executive Order in the Ports Sector signed in 2017 by then-Acting President Yemi Osinbajo, which serves as part of the ease of doing business reform by the federal government. Amongst its other functions, the manual addresses the challenges of overlaps and sequencing of tasks carried out by the multiple agencies and stakeholders in the sector. It clearly delineates the initiation, conclusion, and interconnections of processes among different agencies and stakeholders.
The combination of these initiatives by the CRA has significantly improved the resolution of complaints pertaining to ship calls at Nigerian ports. During the public presentation of the process manual by the former Minister of Transport, Rotimi Amaechi, on 2 February 2021, the Maritime Anti-Corruption Network highlighted that “complaints, which previously took an average of three to seven days to resolve, are now addressed within hours and seldom exceed a day.”
This resource has empowered stakeholders to demand improved services, while enabling smoother operations and increased efficiency. Stakeholders have further benefited from a clearer understanding of port processes, with the manual serving as a quick reference guide. The expectation is that this will continue to improve port efficiency and transparency in the country’s maritime industry.
The NSC was appointed to lead the monitoring and enforcement of the implementation of the manual. Other agencies appointed to support the implementation efforts are the ICPC, Department of State Services (DSS), and Nigerian Ports Authority (NPA). Vice President Yemi Osinbajo further directed the establishment of the Port Standing Task Team (PSTT) by the Chairman of the ICPC, to serve as the operational and enforcement outfit, with members from the aforementioned agencies. The task team has remits including the dismantling of the corruption network fuelling the congestion within port areas. It has the responsibility of carrying out port surveillance to generate evidence-based infractions against the SOPs, the NPPM, and the ease of doing business policy of the federal government. The task team is also empowered to carry out swift enforcement actions based on confirmed intelligence reports.
Prior to the establishment of the PSTT, the ports were in complete disarray, causing significant setbacks to the maritime industry. Excessive delays at anchorage, the proliferation of numerous government manning agencies with unspecified officer quotas per vessel, high rates of vessel infractions, and bottlenecks in resolving complaints on infractions were just a few of the issues plaguing the industry. Additionally, there were gross violations of terminal operations, encompassing cargo handling, storage, trans-shipment, and equipment deficiencies during inspections. The ports also experienced severe human and vehicular congestion. The combination of these challenges created an environment for the breakdown of law and order, leading to widespread corruption, including the prevalence of extortionate practices.
As part of its functional initiatives, the PSTT enforced joint boarding of vessels by officers of the Nigeria Immigration Service (NIS) and Nigeria Customs Service (NCS) to improve joint accountability. Each agency has defined timelines to board vessels and carry out their functions. In an effort to foster cordiality and eliminate hostility, the PSTT implemented sensitisation programmes aimed at enhancing the understanding of government agencies on the purpose of their establishment, the executive order granting them authority at the ports, and the crucial role they are meant to play in the growth and development of the Nigerian maritime industry.
While the work of the PSTT continues, it is important to highlight the successes it has achieved so far, especially in relation to the implementation of the port process manual. The agencies that are permitted to man the ports are now clearly known. They are Ports Health Services (PHS), the NCS, the NIS, the National Drug Law Enforcement Agency (NDLEA), and Nigeria Maritime Administration and Safety Agency (NIMASA). The DSS can only board vessels based on credible intelligence.
Vessel turnaround time has significantly improved, resulting in substantial financial savings for vessel owners. The operations of Nigerian ports have become more transparent, predictable, and consistent, aligning with international best practices. Also, there is now an enhanced cargo dwell time, ship turnaround time, berth occupancy rate efficiency, speedy cargo delivery, reduced congestion, and increased yard capacity efficiency by creating more space.
It is noteworthy that under-the-table costs of cargo clearance at the ports – i.e., illegal financial demands – have been drastically reduced by eliminating bureaucratic obstacles faced by port users and improving duty collection. Also important for highlight is the drastic reduction in unauthorised sample-taking by individuals and agencies. Authorised agencies have progressed towards implementing moderate sampling for both homogenous and heterogenous cargos.
The number of containers examined daily has nearly doubled, improving from an average of 120 to 230 containers at both Lagos Port and Tin Can Island Port. The implementation of the reform has yielded a progressive cost recovery, resulting in savings of billions of naira. Between 2021 and 2022, the economy saved an average vessel demurrage of $20,000 per day, totaling over $12,350,000 or N5.4 billion.
Also noteworthy is that, in 2021, over 85 percent of the vessels that called at Nigerian ports and terminals departed without incident. Extortion incidents by both state and non-state actors have drastically reduced, facilitating smoother movement of vehicles and individuals along the ports' logistics ring.
Finally, while revenue generation is not the primary focus of the task team, fines serve as a deterrent and has contributed to the successes of "Operation Free the Port Corridors" by the PSTT. A modest amount has been directly generated into the Treasury Single Account (TSA) of the federal government. While the task team cannot accurately estimate the amount generated through vehicle document regularisation, but substantial revenue has accrued to the government in this regard.
These outcomes of the task team's interventions have gained the attention of national and international civil societies, some of whom are collaborating with the efforts. An example of such collaboration is the partnership with the Convention on Business Integrity (CBi), a prominent civil society group. The task team and CBi have actively participated in advocacy and action programmes, culminating in the nation's recent achievement of the prestigious "Outstanding Achievement in Collective Action Award" presented by the Switzerland-based Basel Institute on Governance. Prof. Yemi Osinbajo received the award on behalf of the federal government, highlighting the significant shift in the narrative on Nigerian ports as anticipated by the Vice President during the launch of the process manual in December 2020.
Countries including Egypt, Ukraine, and India have expressed an interest in adopting the "Nigerian miracle model” for port reform. Through the implementation of a real-time Anti-Corruption PSSP/Help Desk in Nigerian ports and strict adherence to the provisions outlined in the process manual on joint boarding of vessels, there has been an unprecedented reduction in the number of vessel infractions.
The maritime industry holds immense significance for coastal countries in terms of economic growth, security, and overall development. A coastal country with an efficient maritime industry enjoys enhanced trade capabilities and improved international connectivity. Ports and harbours are vital gateways for import and export activities, facilitating the smooth flow of goods, commodities, and raw materials. The benefits extend to a vibrant blue economy.
The sustainable activities that can be promoted within the coastal economy include responsible marine resource management, renewable energy generation, marine conservation, and eco-tourism initiatives. A well-managed maritime industry ensures the long-term ecological and economic viability of coastal countries.
To further shed light on the ongoing transformation of the Nigerian ports, this column plans to interview the Chairman of the Nigerian Port Standing Task Team, on the progress and outlook of the implementation of the Nigerian Ports Process Manual.
Joy Dimka is a Legal Officer at the Nigerian Shippers’ Council.