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Buhari And The Juicy, Low-Hanging Fruits

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Indulge me this morning as I share a very personal story — although I will tie it back, later, to today’s discussion. Most people know me as a journalist, but that is a quarter of my story. When I started my post-NYSC journalism career in 1993, I took a dispassionate look at my salary and concluded it would take me nowhere. With a widowed mother and three younger siblings, and with hopes to marry “as soon as practicable” — which meant getting my own accommodation — I knew N1,072 per month was going to be a miserable drop in the ocean. I began to think up ideas that could give me better income. I had ideas but I did not have money to push them.

My first idea was to publish a magazine devoted to the 1994 African Cup of Nations in Tunisia. I got financiers. The publication did extremely well, but I was thoroughly cheated and exploited. After playing me like football for one whole year, the financiers eventually paid me N5,000 as the worth of my idea. Although I was bitter, I used the experience to master the basics of graphic design and printing — which would become my biggest source of income till today. I did journalism during the day and printing business at night. I started in 1996 by printing leaflets, newsletters, journals and books for an NGO and later graduated to printing for banks, schools and government agencies.

The fear of a mono-income life has also made me invest in other businesses. Why am I telling this story? I have always been scared of living my life on monthly salary. I have often wondered why Nigeria hopelessly depends on monthly salary, called “federal allocation”. States rush to Abuja every month to collect FAAC “cheques” the same way salaried workers expect bank alerts every month. If crude oil price is high, we return from FAAC meetings with smiles. If the price is low, we come back in tears. Our lives revolve around it. A drop in oil price weakens the naira, increases our debt burden, paralyses governance and inevitably brings hardship on the people. It ought not to be so.

President Muhammadu Buhari doesn’t need to complain, though. Yes, things are tough. But Nigeria is not alone. Most oil-dependent countries are writhing in pains, but they have not thrown up their hands in surrender. Necessity, as we know it, is the mother of invention. Situations like this should force us to be creative, to look around, to look inward, to see possibilities, to pay attention to what we have always neglected. Now that we have found ourselves in this hole, we can carefully make our way out of it. It does not have to cave in on us. We don’t have to keep digging. The dire situation requires thinking on our feet and being pragmatic with our ideologies.

Luckily, several juicy fruits are hanging right in front of Buhari’s nose. He does not need to jump or stretch himself thin to pluck them. All he needs to do is stretch out his hand and grab them. Of the ripe fruits staring at him, I will pick out just one today — and other ones subsequently. I want us to discuss the seaports. First, I want to use common sense before I deal with the inside details. Nigeria is an importing country. We import virtually everything we consume. As I sit at my desk writing this article, I am looking all around me and I can see mobile phones, a laptop, a mouse, calculators, a stapler, an internet router, a wallet, bags, a printer, a tabletop fridge — everything imported!

Simple logic: there is an enormous revenue government can harvest from imports. Our consumption of imports is inelastic and will be so for years to come. It is not just a low-hanging fruit, it is overripe and dropping on the ground unaided. But for the corruption and inefficiency at our ports, Nigeria should be raking in trillions of naira in import duties. Cargo is grossly under-declared, bureaucracy slows down clearing, multiplicity of levies creates unnecessary complications, cost regime by foreign shipping agents is unfriendly — all sorts. These all conspire to stifle a cash cow. Buhari can plug the loopholes and simplify certain rules to make our ports very competitive.

It is estimated that over 60 per cent of goods shipped through other West African countries are meant for Nigeria. So why do importers prefer Cotonou to Apapa? What are we getting wrong? Why are we empowering Benin economy at the expense of ours? Why are we denying our own government enormous revenue? Those are the questions Buhari needs to deal with decisively. To start with, an importer has to sign at least 79 papers to get his goods out of Nigerian ports. It’s not that cumbersome in Cotonou. Our clearing process is manual, slow, cumbersome and primitive to the highest degree. If you were an importer, would you prefer Nigeria to Benin?

Niger, a landlocked country that shares borders with us, does 150,000 metric tonnes of imports yearly. But you know what? They would rather go through Cote d’Ivoire because of administrative efficiency. Imagine how much potential revenue we are losing. Benin does the highest port business in West Africa outside Nigeria: 3 million metric tonnes per year. Just guess where most of the imports end up. Benin has a population of just 10 million while Nigeria has 170 million. Keep guessing the ultimate destination of those goods. The easy flow of petrodollars for 40 years blinded us to all the veritable revenue streams around us. It is time to wake up.

It is indeed tragic that for decades, there was no economic regulator at the ports and this hurt us intensely. It was when President Olusegun Obasanjo wanted to concession the ports some years ago that this came to government’s attention. Many interested investors wanted to know the regulator. Obasanjo eventually appointed the Nigerian Shippers Council (NSC) to do the job. President Goodluck Jonathan took it much further when he realised that the concessioning was falling apart without a proper regulator. He issued gazetted orders based on the NSC Act to properly empower the council to do its job, like NCC does in telecoms and CBN in banking.

Dr. Hassan Bello, the NSC executive secretary/CEO, has been pushing a lot of reforms. But while there has been glaring improvement in port operations and regulation, better things can still be achieved. Bello is currently pushing what should be of significant interest to Buhari:  the implementation of the cargo tracking note (CTN), a bold attempt to checkmate corruption and ramp up revenue from the ports. CTN is a tool of verifying the contents of every cargo, which will then be tracked between ports. Every cargo travelling by sea is issued with a CTN by an approved agent prior to departure. CTN is supported by all major international maritime organisations.

Why is CTN important? Some multinational shipping lines are accused of under-declaring the gross registered tonnage of their vessels in order to underpay port charges. Some importers also under-declare or conceal real quantities of their cargoes so as to underpay duties. This denies Nigeria enormous revenue. CTN is also a security tool — to know what is loaded on the ships. Where are all the guns used by criminals coming from? Don’t they enter Nigeria through the ports? CTN could have taken off as far back as 2009 but it was wrongly conceived as a greedy revenue tool. The charges were crazy. That has now been sorted out. CTN should take off.

Buhari must also make life easier for the NSC by reducing the bureaucracy at the ports. The number of days it takes to clear goods can discourage any importer, who will prefer to divert to neighbouring countries and then smuggle the goods into Nigeria by land. Demurrage is haemorrhage. Another hint for Buhari: Nigeria can make its ports so efficient and import-friendly and actually become the hub for West African countries. Benin is more attractive for a reason. It is time for us to use our head to get out of this petrodollar hole. The era of the black gold is coming to an end. Mono-product economies must become wiser. I’m not a mono-income journalist, remember?

Written by Simon Kolawole