Nigeria’s ports advance with automation and digitalisationSeptember 1, 2022
Mohammed Bello-Koko, managing director and CEO of the Nigerian Ports Authority (NPA), talks to The Energy Year about recent steps the Authority has taken to improve the functioning of Nigeria’s ports and its plans for advancing automation and digitalisation and attracting finance. The NPA is responsible for governing and operating Nigeria’s ports.
How would you describe the NPA’s mandate?
First of all, in addition to our regulatory role, the primary business of the NPA is cargo handling, which involves service-to-vessel and service-to-cargo.
Service-to-vessel involves pilotage, which is bringing in the vessel upon its arrival at the port and providing towage and mooring services to vessels.
Service-to-cargo involves cargo receipt, cargo storage and delivery to the owner.
The second leg of our services was outsourced to private terminal operators following the federal government’s ports reform, which led to the concession of the terminals in 2005/2006.
Essentially, the Authority’s responsibility covers the entire gamut of activities that ensures trade facilitation through the ports as gateways to the economy and transit point of cargo movement to the hinterland and beyond.
What recent steps have you taken to improve the functioning of Nigeria’s ports?
In 2022, we focused on the low-hanging fruits to provide short-term growth. We improved our revenue collection because the NPA is expected to transfer a certain amount of revenue to the federal government. Since January 2022, we have been able to transfer over NGN 45 billion [USD 108.2 million] to the Consolidated Revenue Fund (CRF).
The ports in Lagos are congested, and we realised the need to open up the ports in the eastern part of the country. We deployed more marine crafts and appointed third-party towage companies to deploy tug boats and pilot cutters to ensure a continuous movement of goods and vessels.
Another critical activity that we have focused on is safety in the ports.
We have procured and deployed security patrol boats around the ports and have intensified our collaborations with the Nigerian Navy in order to increase security patrols along the channels.
One of the ports in the east has draught limitations because of the collapsed breakwaters. We commenced and concluded the dredging of the channel from the fairway buoy to the Escravos bar and beyond in order to improve the draught to 7.5 metres along the channel. The essence is to stop incidents of ships going aground. We also ensured the deployment of navigation aids in some eastern ports that did not have them. To support the federal government’s agenda of increasing and enhancing non-oil revenue and exports, we gave licences to about 10 export processing terminals.
The idea is to solve exporters’ current problems, where export commodities and containers take too long to export. Each of these terminals is supposed to have all of the necessary equipment to ensure business continuity. If you deliver to that location, the products are sorted, tested, certified, packed and then sealed in the container which is sent to the port for export immediately. The essence here is to reduce the time it takes for export commodities to be taken out of our ports.
We have improved security along the waterways by deploying more security patrol boats. To foster activity in the ports, we also introduced some tariff rebates, which should encourage users to move their imports and exports from Lagos to other ports in Nigeria, thereby decongesting the ports in Lagos even further. We will keep engaging stakeholders, encouraging them and providing whatever incentives are necessary to boost activity at our ports.
We will start rehabilitating all of the existing ports within Nigeria to ensure that they become more competitive, have deeper draughts and encourage exporters and importers to do business from various locations.
How is the NPA advancing the automation and digitalisation of Nigerian ports?
We are improving our efficiency by enhancing the sector’s digitalisation, and we have launched a roadmap to fully automate the ports by 2023. We are developing a deliberate expenditure model to ensure that spending is targeted to improve digitalisation in the fastest way possible. In collaboration with the IMO [International Maritime Organization], we are deploying the Port Community System [PCS], a remarkable achievement so far. A PCS is an avenue that brings in all the stakeholders in the maritime industry for easy exchange of information, ensuring reliable data.
It reduces the documentation time for cargo clearing, reducing the berthing time of vessels and cargo dwell time. The IMO even funded the first and second phases of consultancies. The first phase was done virtually, while the second phase was done with IMO consultants who spent 10 days in Nigeria to conduct on-the-spot assessments of the maritime industry and to visit stakeholders such as Nigerian Customs, Nigeria Immigration Service, the Standards Organisation of Nigeria, the shipping companies and the freight forwarders and other stakeholders.
They need to know what kind of information technology (IT) deployments each of these stakeholders has because the next step is to see how to integrate them and what type of system we should use.
The NPA has several IT deployments such as Oracle Financials, which helps us efficiently manage our accounting books and the Revenue Invoice Management System (RIMS), which allows us to effectively manage revenue generation and collections seamlessly. The advantage of having both is because they integrate with each other to minimise human interference thus ensuring accuracy in the process. We also have HYPERION, which helps us with budget control, ensuring that our expenditure aligns with budgetary approvals. We also have the Customer Portal, which enables our customers to upload vital documents such as the manifest, apply for the Electronic Ship Entry Notice (E-SEN) online in real-time and also get the certificate online with zero human interface. One important aspect of the Customer Portal is the link with Lloyd’s Register, which allows for accurate verification of gross tonnage.
Overall, we are convinced that IT deployment remains the veritable means of ensuring the competitiveness of our ports, and we are resolute in the drive to fully digitalise our operations by deploying the PCS.
Which challenges are you expecting from the automation plan?
Standardisation is missing in Nigeria. Each stakeholder has a different and separate IT deployment; some are far ahead of others. That means you must find a way to integrate everything and get them to use the Port Community System. Another issue could be the availability of funds. IT is expensive, whether it is the servers, the app itself or whatever you’re deploying.
We will work with those in financial need to attract investors and collaborators. We also need to buy licences, and then, of course, we need to train. We need to plan how to train, whom to train and how to get people to train. It will be a significant change, and we must find ways to ensure that stakeholders will join us.
How is the NPA fostering transparency in the sector?
We have introduced the Nigerian Port Process Manual, which guides activities in the ports more transparently. We want to reduce corruption relating to vessels visiting the country. That has worked; we have had extremely low reported cases of attempted bribery or corruption. All the relevant government agencies in the port are involved in this. We keep engaging stakeholders, sensitising them on the need to ensure that our practices are up to international standards. We have an active website which provides information about our tariffs, rates, licensing and approval processes.
We have also strictly adhered to the mandate of promoting the ease of doing business as directed by President Buhari. We have 24-hour port services. We have improved safety and security along the channel at our port and within the port premises. We are observing ISPS [International Ship and Port Facility Security] codes to ensure safety at all port locations. We will ensure international best practices in whatever we do.
How will the Lekki, Badagry and Ibom deep seaports change the Nigerian marine sector?
Currently, our ports have a maximum draught of 13.5 metres. The Lekki Deep Sea Port in its first phase has a draught of 16.5 metres, reaching above 18 metres. Badagry will have a draught of about 18.5 metres. For the Ibom Deep Sea Port, we have already identified the location that has a natural draught of 17.5 metres. We will be able to bring in bigger vessels, creating excellent economies of scale. The cost of doing business in our ports will decrease.
The Lekki Deep Sea Port is expected to commence business in September 2022. It is an automated port; there will be efficiency in terms of the clearing of goods, documentation will be faster, and there will be little-to-no human interference when it comes to port operations. We believe that this will reduce the traffic and congestion in the Apapa port.
We will be optimally positioned to attract a higher degree of the transit cargo we lost over time due to smaller draughts or operational inefficiencies in some of the ports, especially for the landlocked countries. In light of the African Continental Free Trade Area, Nigeria can play a pivotal role and once again become the trading and logistics hub of West Africa.
How would you evaluate the development of local content in your operations?
Most terminal operators are wholly owned by Nigerians. Nigerian companies are behind the construction and operationalisation of the deep seaports. They are also focusing on being green, which is a welcome achievement. Barge operation companies are strictly Nigerian, and we have seen an increase in their number of activities. We have seen an increase in Nigerian-owned jetties, whether for oil or general cargo. We will keep looking for avenues where we can encourage local companies and manufacturers to ensure that they set up businesses.
What is the NPA’s strategy for attracting finance?
The Tin Can Island Port revamp will require more than USD 600 million over a three-year project. We are looking for multilateral funding agencies that would provide loans to be paid back from our generated revenue. The other option is to work with the terminal operators to bring in foreign investors to invest in the development of existing sea ports. But for now, we are open to any ideas from investors that will develop Nigeria’s marine logistics and the ports themselves.