Chief Olisa Agbakoba (SAN) is a former chairman of the Nigerian Bar Association (NBA), Principal Partner of Olisa Agbakoba Law (OAL) and a key maritime stakeholder. In this interview with PAUL OGBUOKIRI, he says that the Buhari administration, like the ones before it, has not done anything to develop Nigeria’s maritime industry. Excerpts:
What do you think is the problem with the Nigerian maritime industry?
The government has failed since the time of the Nigerian Maritime Act in 1987. The government has not enacted any policy to review, examine and implement a plan. So, what you see now is a heavy decline in the way maritime policy is carried out, in the way new laws are even made to meet new challenges.
So, all together, the industry is very sick and don’t forget that the maritime industry is strongly connected to the hydrocarbon industry that is, oil and gas industry because oil and gas industry cannot take place in the absence of the maritime industry in particular, crude oil. Everything used to explore it is maritime, shipping. Right now we have a case in court where the question is whether oil rigs are defined as ships under the cabotage regime as it is. Imagine if we are to remove the oil rigs. So, for me having been in the industry for a long time, I have seen that the Federal Government of Nigeria has no understanding of maritime policies.
It was assumed that the last administration was not up and doing in developing the maritime industry, we have a new administration in place which is almost two years old, what impact do you think they have made in the industry?
There is no change, it is clear there is no progress, and rather there are more declines. Just take Apapa as one of the key maritime areas; you can see the decline yourself. No roads, the port is in tatters. I told the Managing Director of NPA that the port is technically deficient. You cannot say it is an ocean going port anymore.
The original plan of Apapa was a port city not residential, but today, residential houses are everywhere. Apapa was filled with warehouses but because of lack of planning, it has become residential rather than a port city. A city can’t serve as a port city and a residential area at the same time. It will limit the scope of port efficiency. Coming to Apapa in the 80s, vessels would load their cargoes onto train and the cargoes would be moved to Iddo. As I said, because nobody has given careful thought to the ways ports are run, the port here is only about eight metres draft, serious ocean going vessels will be afraid to come here because they may run aground.
So even though we control over 80 per cent of the traffic in the West and Central West African, the ship owners will continue to be afraid to come here, rather they will prefer to go to the ports of the neighbouring countries from where the goods are now brought by roads to Nigeria. The Ports and Harbour Bill has been lying in parliament going to almost 10 years so which investor is going to come and say I have located this parcel of land here and will like to build a port. The problem is Abuja which excludes everybody in the planning process.
From the pictures you have painted, what should an ideal port look like?
If you look at Jabilali in Dubai, it is an ideal port, if you look at Shanghai or Singapore, these are ideal ports. It is so clear, they have open space which is number one, it must be able to transfer goods very fast, you must have mechanized and technical way of bringing in ships and clearing them.
There is need to define the relationship between government and business, you should not combine both. You should allow business people to invest, just like Dangote is doing but Dangote is doing his own taking a risk, there is no legal context in what he is doing, there is no law backing it up and I am sure he knows that.
It is an investment risk to embark upon building a massive refinery with a port without a law. Babalakin got his fingers burnt in aviation. What profit will anyone have if government is always doing policy summersault? You give someone a concession at the airport, it comes to exercising his concession, you give it to Arik, people are watching.
Look at Dangote and Erisco Foods, they set up multi billion naira industries to process tomatoes while the government allowed China to flood the country with finished tomato pastes, but I am happy to see today (Wednesday) that they have announced a new tariff that will keep away foreign imports because the only way you can grow the economy is by growing production capacity locally and the port is critical because it is from there you export what you want to export. Either way, whether importing or exporting, our ports are not able to perform those functions.
Expatiate more on protection of local industries viz-a-vis the ban on importation of vehicles into the Nigeria through the land borders?
The problem is that the policy of national treatment as it is called meaning that you create an environment to encourage local production; it is not just one finger. So banning cars from coming into the country through the land borders is only one side of the coin because you cannot ban cars from coming when your ports are in tatters, when your roads are useless. If you ban cars from coming through land borders, where do they come from – these ports?
These ones cannot bring in many vehicles so really, it is back to what we are saying that you cannot discuss the maritime industry until a holistic economic policy and the so called economic growth plan is put in place, it is still aspirational. I read the 40 pages of the aspirational values which doesn’t say exactly what they are going to do for instance saying that we are allocating N10 billion to fix the roads, it just says in seven years we hope to be. So, I haven’t seen any commitment on the part of government to grow oil and gas industry and the maritime industry. Indigenous ship owners have not been able to access the Cabotage Vessel Finance Fund (CVFF), how do you think they can access the fund?
Do you expect NIMASA to disburse the funds? I don’t think so. There is a difference between policy making and regulation. On business operations so unfortunately, NIMASA is given some responsibilities that is best done by the private sector so when NIMASA raises those funds from the freight charges or whatever, it can nominate a bank and deposit the money there and it is the bank’s responsibility to draw the lending process because they have the skills but when NIMASA now takes up the role of disbursing the funds, it has no capacity.
How does it assess those people who have come to borrow? It doesn’t have the skill, it is not its job so naturally, and the CVFF is lying dormant even though they said part of the money has been technically diverted but I just know that NIMASA doesn’t have the skill. I once told Dosunmu to name one DG that has assisted in buying one ocean going vessel apart from all these scraps that they buy, name one because if the key function of NIMASA is to develop the shipping sector, how come they are not buying ships? Not even one so you see it is a big problem.
Policy on carriage of crude oil: which do you think is better between Free on Board (FOB) and Cost Insurance and Freight (CIF)?
The Cost, Insurance and Freight is better. In the maritime industry, there are 36 value chains. I am surprised that the government didn’t know this when we had the Ribadu Committee set up by Diezani to look at how the maritime sector can be strengthened to raise revenue and block leakages. I told them that we have 36 value chains, four are of interest to me; shipping, banking, insurance and law. Of these four, the contribution of Nigeria that is us locally is less than one per cent.
So it means that when Shell brings up the crude from the ground under the FOB principle, they call the shots but if Nigeria turns it around and calls it CIF or writes a contract because we have a contract that says you are here to bring up the oil, once you done so, our people will take over, there will be a big difference and that is partly why the shipping industry is not working. The same thing in arbitration because am sure you may not know there is a lot in arbitration.
I just did one in the UK about a month ago and I was shocked that these are arbitrations concerning Nigerian oil, Nigerian money and we were in London, and I was the only black man there. When I looked at the yield in the legal services in arbitration to the economy there, it is 4.5 per cent but in Nigeria, legal and dispute services are not a sector, it is called other sectors. So what type of government do you have that can’t see that there is money to be made by Nigerians at these levels.
Mobil spends about $1 billion on legal services but no Nigerian lawyer gets it. We allow these guys to drill our oil here and insure it abroad, what sort of rubbish.
Then the worst is that you won’t bring your salary and say I should keep it in my account, you won’t say so but we keep our money in foreign bank accounts. Actually, it is Shell and other IOCs that put the money in and then they notify the Central Bank, the Director of Foreign Exchange to be precise. We discovered during the Ribadu Committee that an IOC delaying in notifying the Federal Government of sail will mean that Nigerian government loses millions because there is interest to the money. The man who holds the money holds it for longer than necessary before notifying you and he takes the interest.
NIMASA has given up till 28th of this month for abandoned ship owners to evacuate them or they be declared wrecks, what is your take on that?
It is under the law. The proper procedure before NIMASA was that Government In- spectors as they were then called, they were the receivers of wrecks then, they will send a notification to the Minister of Transport and he will authorised them to remove otherwise the waters will become accident prone. In fact, nobody knows that Lagos at a point was most dangerous port in the world because the vessels can hit something. There was a time some years ago that an airplane that landed in Port Harcourt hit six cows on the runway.
Air safety or maritime safety is paramount. This issue is actually NIMASA’s job but part of the problem is that is not exciting for anybody to go for wrecks because we don’t have steel industries. These wrecks is crushed and used in steel industries. No sane country will have the kind of wrecks we have here, in fact, some whites come here to buy wrecks and go away. The vessels you see in Marina, who owns the abandoned vessels, nobody answers that. What do they do with them? The law allows NIMASA to do that.
NIMASA is hosting the African maritime stakeholders in Abuja on from 19th to 21st, will you be there?
I am not going
Because every time there is a conference, even when Emeka was Minister of Transport and held a conference, I refused to go but the Director General of Chamber of Shipping persuaded me and I told him I am here and you know who I am and he said yes. We have been attending conferences, to me they are diversionary. Holding a conference to fix the Nigerian maritime, we need to make first decision to say we do away with FOB from the law and put CIF, do we need a conference for that?
If we don’t, we now need to tell the IOCs that we have a law called the National Content Act and by sections 3 and 6 of that Act, you are supposed to play a part in developing indigenous capacity.
In some aspects, engineering in particular, Nigerians are now getting work especially the new government policy and they are laying pipelines. That is the new law in the maritime industry. The foreigners could have decided in the olden days to choose who to use. So there is advantage in the Nigerian Content Development Act but the Content Act is missing out the legal services. Can you imagine if the government should insist to these IOCs, the legal works that would have come out for Nigeria lawyers?
Maybe the lawyers have been silent because I am not even aware legal content….
It is not us as lawyers. You are speaking to me as a man wearing two hats. First as a maritime stakeholder and also as a lawyer so if you ask me that whether as a lawyer, I think it is more of the maritime stakeholders that should play a role in putting pressure on government to make sure the laws work so that Nigerians play a role. The one thing I like about the US President, Mr. Donald Trump on his stance in his country’s businesses that have gone to Mexico.
He said how can we send them all our businesses and they are sending back the products to us because we are the market? I was in Malta at a conference and a permanent secretary in Cameroun who used Nigeria market as his reason why they should invest in Cameroun. If you invest in Cameroun, the market is here.
This thing is terrible, if you build a thousand cars per day for example, Nigerians would buy them so we are the consumers and produce nothing. My point is not just the maritime sector, it has to do with political, economic plans it has linkages with African development and capacity. The maritime is a very wealthy sector, a lot of money there. If the ports are working properly, we are looking at trillions of naira, we are looking at employment, job creation and many interlocking fallouts.
What do you think the government should do to bring out the potentials of the maritime sector?
What the government should do is to develop a plan and in developing the plan, we need to reach out to the people who have been in the industry. With greatest respect to Amaechi, he is new here and there is no way he will understand the sector as much as those of us who have been in the industry. So, it is important to have the minister call on people. It is like calling top business men and they tell you that what you are saying will not work.
There should be a forum where successful business men who understand the nitty gritty, who own businesses and ask them what he can do. He will hear something different from what the permanent secretaries are telling him. That is what we need to do we need to have people who understand how to build ports even though I am not a technical man I know that we have 47 inland waterways that the whites built. Not a single one is functioning yet we have NIWA sitting down there, yet we have road traffic congestion.
If you have ever gone round the waters of Lagos, you will indeed know that Lagos is a coastal city. The second advice I will give to the president is, don’t cut away the private sector. These are the people who constitute the engine of economic development not you. Your own is to listen to them and quickly respond and that keeps things going.