THE 10TH NIGERIAN DREDGING
SUMMIT AND EXHIBITION
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Date: Wednesday-Friday, Nov. 23-25, 2016.
Time: 9am - 3pm daily.
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Ports are Empty While Cotonou, Lome, Abidjan Bubble...
reform in Customs has not been done…” Amieworo.
An interview with Mr. Lucky Amieworo,
the Chairman of the Council of Managing Directors of Licensed Customs
Clearing and Forwarding Agents.
DDH: Please kindly introduce
Amiewero: My name is Lucky Amieworo, President of the
Council, and a member of Presidential Committee to reform Customs, destination
inspection committee, 48-hrs Clearance and other port problems. I have
served in 167 committees, nine of them presidential.
DDH: What is the origin of the problem with the customs
goods clearance at the ports?
Amieworo: Nigeria beforehand was operating a system which
was manual in nature and so it was cumbersome, time-sapping and exhausting.
But in 2006, two systems were canvassed and developed to change the
system from manual to electronic. The first was the destination inspection
committee and the second was the ports reforms committee. The ports
reforms committee concessioned the ports while the destination inspection
committee was where I served. We brought in the scanners and the new
procedures into the old system. Before then the port system was run
on a manual labour, you have to bring out all the containers, bring
out all your goods from the containers and view the goods physically.
The NPA was the one handling everything at this time. It is not as if
the NPA was wrong but the concept and the processes were wrong. Because
it was manual, you had to outstretch your facilities in terms of physical
examination. But as at 2003, 2004 the world had moved on and changed
their examination principles from physical examination to selective
principles of examination.
DDH: Are they using the result of your reforms?
Amieworo: If they don’t use the result of the reform
that is why the country is like it is.
DDH: What have they left behind?
Amieworo: The reform in Customs has not been done. Reforms
are not changing people. Reforms are not moving people from one place
to the other. By the UNCTAD concept of reform, reforms are technical.
When the first reform started in Nigeria, we were the proponents of
the reform, we were one of the people who were the engine that pushed
for the reforms. We looked at our procedures and they were not meeting
up to standards, we decided to push government that these things must
be done. The first one was done but not properly done because it was
a fraudulent one. The second one was done and COTECNA was given the
whole contract of taking care of the scanning and the procedures. I
actually petitioned the goverment and [President] Obasanjo had to set
up a new committee to look at the whole thing under Sekibo, the then
minister of transport. At the end of the day it was resolved that it
should be reviewed. It was reviewed to accommodate other service providers
like SGS, Globalscan, Webfontaine. Webfontaine was actually involved
in the platform, they provided the integrated platform that we are seeing
today. COTECNA, SGS and Globalscan provided the scanners. Now when you
look at the concept of what is happening in the whole port, the reform
process is on the technical, looking at the tools you use to bring about
trade facilitation. The tools are there and you must look at the conventions.
The Customs has not complied with most of the conventions. The conventions
[in use] are not in line with the international best practices. It’s
not enough for you to wear uniforms and put on the ranks. It’s
for you to look at the conventions because the Customs are for trade
conventions. For instance when you look at the CEMA, the CEMA is a trade
convention that you entered into in the 1950s, in the 1960s, in the
1970s, and some of them lately. So, you are having conventions that
have not been complied with by the Customs. So when you are talking
about reforms, reforms are not to talk about revenue, nobody in the
world talks about revenue today because if you run your Customs well…
There are three principles you must run your customs today: the Customs
principles must be predictable, must be consistent and must be transparent.
These three principles are hinged on WTO Article 5, 7, 8 and 10. If
your principles are not based on that, you have not reformed.
If you look at Nigeria Customs now, they are imposing
procedures, they are not treating procedures. The whole scanning machines
have collapsed. And these are the tools and under that scanning machine,
you have the WCO safe framework. Why? After just one year of handing
over, we have these problems. So when you say reforms, reform is to
comply with the conventions. They are Kyoto Conventions. They are WCO
conventions on so many issues, on classification, on valuation, on origin.
These conventions are there. Have they complied with it? Do the Customs
know it? They are trade procedures experts. Just like the licensed customs
agents. So, when you are talking about you are talking about the procedures,
have you complied with them? Then the tools you are using, are they
in line? What are the trade facilitation mechanisms they are using?
DDH: What are the effects of these handicaps or these failures
on our country?
Amieworo: The effects are what is affecting our cargoes
being moved out of the country. A customs man or a licensed customs
agent is to treat, classify, interpret, then you apply. So, when you
say you are a customs man, you don’t impose decisions, values,
classification or rule of origin. It drives the people out of the country.
It makes them to go into smuggling because your duties are not treated.
DDH: You believe this is responsible for scaring cargo-laden
ships out of our ports?
Amieworo: You must scare them because you are imposing
and once you impose, that is why the principles of trade were not given
to Customs. The principles of trade were converted back to WTO because
they noticed that the Customs used very crude opinions. Customs opinion
is not what is used in the world today but Nigerian Customs are still
using their own opinions which are not in the parts of the law. There
is no way you can bring your cargoes in when you don’t have those
three principles. They are not predictable, they are not consistent,
they are not transparent. Go and ask any customs man whether they know
about valuation, they don’t know. So, you bring in values and
threaten people, at the end of the day, you tell them if you don’t
pay you leave your cargo. But you can go in the port and do it on the
basis that you want to raise revenue. You don’t raise revenue
because when you are raising revenue of N1 billion you are scaring away
people with revenue of more than N3 trillion. If you look at the what
they call the import assessment of cargoes that have left the country,
you will be shocked what we have lost. By our huge market and our throughput,
we control almost 80% of the sub-regional trade. And every other sub-region
relies on Nigeria for their throughput.
DDH: But now the reverse is the case, why?
Amieworo: Because, we’ve lost our transit [cargoes].
Why? The technical tools are not there. We are still using Federal Operations
[Department] to guide things going on transit, we don’t even have
transit. We are not a transit nation but we have a natural transit asset
because Chad is close to Nigeria. Niger is close to Nigeria. Burkina
Faso might be close, these are all landlocked countries that require
our facilities based on Article 5, transiting through our facilities
for us to make the money. But instead of using our facilities, they
are using Ghana, using Cote d’Ivoire which are very far. Our own
is near but because we have not been able to programme [well]. For instance,
Ghana has what they call satellite tracking system for their transit.
Ghana is having E-bond for their procedures. We don’t have all
these things. Up till now, everything we are doing is manual. You still
see us carrying guns on the road. We use gun to go and stop containers,
this and that… That is in contravention of the Kyoto convention.
It’s duplication of checks.
DDH: So the customs man in 2016 is not supposed to be carrying
Amieworo: No. The customs is a grade. You are carrying
gun on the road, dropping containers on the road, stopping motors on
the road, it’s duplication of checks and contravention of the
DDH: How does the Kyoto convention see it?
Amieworo: It says you should have a one-stop shop on custom
examination. That is why there is what we call selective principle of
examination. There are two key areas: you have the Kyoto convention
and the safe framework. Safe framework talks about our global trade
system which actually focuses on security. It has two pillars: custom-to-custom
and custom-to-business. Custom-to-business focuses on validation of
importers and manufacturers who are under what they call the AEO, authorized
economic operators. That means you are authorized by validation to operate
so that your things can move faster, that is custom to business. Then
custom to custom talks about scanners, you must have an in-bound and
out-bound inspection. Like what happened to the USA and other countries.
What they have done so far is to look at their customs and push a lot
of them out their country to make sure that every iota going to the
US are examined before they are loaded on board. So, you have throughput
countries that lift cargoes to the US. Most of the US customs officers
are there. Then they have what are called importers security filing.
You file an information 24 hours before the cargo is loaded onboard
the ship. Then you have the validation which is called C-PAT which is
AEO to other countries. So, when you look at the gamut of all these
things, we are not complying with anyone. And you don’t talk about
the reforms when you don’t know about it.
DDH: What do you say in a situation when a customs man is
at the border confronting smugglers, he needs a gun?
Amieworo: When you say confronting smugglers, which is
at the border. That is why in the US, you have the customs at the Treasury
and the customs in the Homeland Security and they call them the border
agencies. They are there to secure. How many guns do you see at the
border in America? It’s heavily controlled. You don’t carry
guns on the highway. Trade has been harmonized, simplified. We are not
running the trade of 1947 or 1970. We are running trade in 2016 whereby
we are only having four bands, 0%, 5%, 10% and 20%. The 35% or anything
higher you are having is just to protect the primary industries. That
is what trade is all about, it is so friendly. Trade is not a criminal
thing. That is why many countries in the world changed the trade process
to issues that have to do with pecuniary trade penalties that have to
do with money. You still have the Nigerian customs looking at section
46 and 47, all those are 1958 procedures. They have not looked at trade
as it is being done by WTO and WCO. And you still have people who don’t
understand the modern trends at the helm of affairs because trade has
changed, it has been compressed, friendly, simplified. In the 1950s
countries tried to secure their borders for duty payments, etc but today
we have the common external tariff that have to do with other friendly
nations. You have the EPI and all the rest where you have the global
trade because now we are a global village. This is why all over the
world, customs has been integrated into inland revenue, VAT, etc. In
Ghana, you don’t hear much of customs but it’s under the
Commissioner-General [of Inland Revenue] and same in other places like
Kenya, Canada, everywhere now. Mono board does no longer exist. So Customs
must change the way they are doing things. The revenue concern of Customs
is being simplified and when you hit revenue hard you force out trade
and what we have lost so far, the impact is in trillions of Naira.
DDH: If we want to recapture our transit trade, what do
we have to do?
Amieworo: You bring experts. Customs cannot reform customs.
There is nowhere in the world you use the customs to reform customs.
DDH: I was looking for facility and procedure upgrades…
Amieworo: The ICT and platforms you have might have those
things because the platform by our committee’s recommendations,
were supposed to have been audited and validated to know whether they
met the standards. I know that in 2009, there was a man from USAID that
came in and assessed the whole thing looking for the faults in the whole
system. For transit trade, we have the corridor, the facilities we don’t
have, we don’t have the satellite tracking system, we don’t
have the E-bond system, we’ve not been able to codify and we don’t
even have a transit system on ground.
DDH: Do we have enough warehouses and sheds?
Amieworo: You don’t need all those warehouses. Transit
is just for you to move from the ports to the border. In Ghana, they
have a dedicated berth. Warehouses and sheds, they have all those things
in Nigeria. Unfortunately nobody controls them. If you look at our system
in Nigeria, who controls the port system?
DDH: The concessionaire.
Amieworo: Who controls them (the concessionaires)?
DDH: The NPA and the Federal Ministry of Transport.
Amieworo: Or Shippers Council or who? When it comes to
concession, there are six different management models. You have management
and employee buy-out which is being practiced in Britain. Then the landlord-port
model, the model we are operating. Then partial privatization, we had
done that before. And full privatization. What Nigeria has developed
is concession and there is component and element in concession. The
component in concession represents the port regulator, the land lord
and the marine. When you have independent port regulator, then you have
to have the marine side has to do with dredging, channels maintenance,
channels maintenance, tug boats and all the rest. The port regulator
is [Nigerian] Shippers Council. Now when you talk about the port elements,
they are four: labour, tariff, traffic, and infrastructure. That is
why they had to drop almost 10,000 workers from NPA. NPA is just the
landlord but they might not the people to regulate.
DDH: So if we are targeting transit or transshipment cargo,
for instance, it means that it has to come under the auspices of the
Amieworo: You see in transit cargo, promotion may come
from NPA or Shipper’s Council and the implementation may come
from the terminal operators. That is why Ghana did not give out their
ports to concessionaries. What Ghana did was to go into joint venture.
The company there is Meridian Port Services. They have two concepts,
35% of the throughput was given to the Ghana Government while 65% was
given to Meridian, and in Meridian the government was having a share.
And in the throughput arrangement they still control the traffic and
DDH: Is this why most of our cargoes (traffic) are going
Amieworo: We already lost most of our traffic even before
they concessioned their ports. We simply lost our traffic because of
several irregularities in the customs and other agencies whose procedures
are so out dated. In Ghana they have what we call “E- bond”
(electronic bond), a national bond system. But our bond here is manual.
That means you have to go to the bond office, come down here, they will
tell you to go here and there and this takes so much time and days.
I might have a bond with customs and I have a query. I just go my bond
system, click it and move, if you want to do your transit you do it.
E-bond means that when you are on transit, that cargo must be bonded.
Through this E-bond system, they simplify it for all the consignments
that have to go through bond regime.
DDH: The E-bond is actually the interface of digital or
Amieworo: It’s electronics, a national guarantee
bond system. They have what they call “Satellite tracking system”,
their trucks are not going with any gun. There’s a device they
put in the vehicle and as you are going the cargo is tracked. If you
tamper with it, they know. We don’t have these things here whereas
the custom is the engine of implementation in government.
DDH: What is the situation with our diverted cargoes?
Amieworo: It is madness. You see, there are three layers
of diversion, the cargoes that are being diverted to countries around
us is massive, because if you have the impact assessment of cargoes
leaving the country … Nigeria has a huge market huge industries
and huge throughput that have been distributed to every other countries
within the region. Distributed to Togo, Seme, Cameroun, Tchad, Niger
and every other country, there are leakages coming back. You have three
layers: the transit, transshipment. Transshipment is NPA’s problem.
In the world today, you have millennium ports and mega ships. Among
the ships, there are classes: C-class and E-class ships. E-class ships
fall under 18,000- to 20,000-teus. C-class ships fall under 8,000- to
12,000teus. There are about 250 of these ships being moved around the
world by the five big shipping lines. That is why the shipping companies
are merging every day. In 2015, I think they released almost 50 of these
ships. Millennium ports must have a draft level of almost 19 metres.
What is our own draft level, it’s political. They will tell you
it’s 12, sometimes they will tell you it’s 9. How many of
these container ships are coming here? Can you bring 2,000 containers
here? That is where we have the problem. Now, within the sub-region,
West and Central Africa, we need two hub ports. You may call them preferred
ports, deepsea ports, transshipment ports. Our ports are river ports,
very far from the fairway buoy and causing lots of fuel to steam. That
is why our freight cost is very high. The dredging cost is also extremely
high. You cannot bring a deepsea port into a river port. Our ports are
river ports and if you want to really do anything, you must look for
a transshipment seaport or ocean port but when you start to talk about
Akwa Ibom and this and that, you don’t need five hundred ports
because a millennium port is a massive investment. Nigerians are just
playing politics with it. You don’t need two seaports in Nigeria,
you need just one. A millennium port is where a mega ship will come
in. Mega ships have fuel economy and they carry what you can carry in
five years in one day. And when they berth, they offload the whole cargoes.
The implication to Nigeria is this, Cote d’Ivoire has started
since 2008. Togo has built their port and their draft level is almost
19 metres. That is where you see many of these ships are going, they
cannot come to Nigeria. Cameroon has started their deepsea port, Limbe.
They have two but one has started working. Cameroon is the one taking
our cargoes. Most of the NPA people do they know about it? Do they know
what is happening in Togo? If we don’t have the type of ports
they want, there will be a time when nobody will come to Nigeria, they
will go to Ghana. Since Nigeria finished concession, have they developed
the port? Ghana gave out that port and have contributed $1.5 billion
last month to the development of their port. That is the second time.
And what cargo are they targeting? Nigerian cargoes.
DDH: When Nigerian cargoes are landed there, a lot of it
come in through smuggling…
Amieworo: No, the freight component is going to Ghana.
The cargoes come in legally through the borders, there are scanners
at the border. If smuggling is going on, that is the people who want
to smuggle. Most of the cargoes coming in through land borders are allowable.
They have to pay their duties to come in. The problem is those cargoes,
once they are transferred to another country, you are losing your freight
component, those components that bring employment. Revenue is for customs
but employment generation comes from the freight component. The ship
that is supposed to berth in Nigeria, berths in Ghana and when they
berth there the cargoes goes there, the people pay their shipping companies
there, pays their licensed customs agents there, pays the freight forwarder
who will transport the goods. They come to the border here and they
pass. So, everything that is a contributory factor as far as employment
generation is concerned, goes to Ghana. That is why when you go to these
countries now, they are big because they are living on our freight component.
That is on transit cargo. Then you have our domestic cargo that is supposed
to be here but are moved to other countries before they come in. So,
you just pay duty and say yes we have got custom revenue but employment
generation is hard in the country because all the things that bring
in employment are moved out to other countries and they are benefitting
from it while we are waiting for the crumbs to collect.
DDH: If you are asked to proffer three quick solutions to
reverse this trend, what would you say?
Amieworo: If you don’t put experts there, you cannot
reverse the trend. You must put people who are seasoned in positions
of power, experience is very key. You don’t bring learners to
come and change a dicey system because as they continue to learn, things
would continue to get worst. You have to bring people who have been
in economic system before, like IMF and World Bank, people who understand
the mechanism and the manipulative tendencies in the world economy,
to come and run some of our economic system and structures. There is
no pride in this thing. When you look at Obasanjo, for instance, he
brought in the best brains. He brought in people like El-Rufai, Nuhu
Ribadu, Ngozi Okonjo Iweala, Obi Ezekwesili and the rest. He brought
in brains with experience, under President Olusegun Obasanjo I served
in 90 committees. So, when you are talking about leadership, it is not
that I give my sister work, I give my brother work.
DDH: In tracing the history of the managing directors association,
how did you people come about it?
Amieworo: It was formed in 1996 under the Abacha regime
to help change some policies in the maritime sector after the ANCLA
crisis. We then decided to form the Association of Managing Directors
of clearing and forwarding companies.