Hon. Muhammad Kabir Ajanah is the Vice Chairman, House of Representatives’ Committee on Ports, Harbours and Waterways. In this interview with FRANCIS KADIRI, he calls for an end to multiple taxation and high duties in the ports, insisting that unless this is done, attracting foreign investors would remain a mirage. Excerpts:
Why is the Nigerian maritime sector unable to meet the goals of resource diversification and revenue generation set for it by the Federal Government in 2016?
Although I have not visited all the ports in Nigeria, it is true that the maritime sector in Nigeria is grossly underperforming. In terms of revenue, even the Federal Government is not getting what it ought to receive from it.
Presently, maritime businesses are suffering some setbacks. For example, only very few ships berth in Nigeria. Most ships prefer to berth in ports of neighbouring countries. However, the goods they bring still end up in Nigeria. Some are smuggled, while others come in legally upon payment of taxes.
What do you think is responsible for that development?
The factor responsible for that problem is multiple taxation at the ports. Government should create incentives by slashing the custom duties on importation. There is a need for a synergy in taxation: tax rates are too high, so they must be slashed down. Also, people must pay taxes at the ports, but it should be once per engagement.
What are you doing in the House of Representatives to address the problem?
The House is already addressing it from a holistic angle. For example, the terminals perform below expectation in terms of the Guaranteed Minimum Tonnage. To correct this, we will review the GMT as well as put in place strategies that will ensure the relocation of lost businesses to the country. When this is achieved, we would have stopped the huge loss of revenue currently being experienced.
There is currently a ban on importation of cars through land borders.How effective is this?
It means cars can only get into the country through the terminals. The policy means well, because it discourages the importation of scraps into the country, and this is in the interest of the masses. If a car is made in year 2014, it is still relatively new, and may serve the Nigerian buyer better than a scrap made in 2000 that was smuggled into the country via porous borders. Scrap cars constitute nuisance to users and some of them bear hazards. So the ban on cross boarder importation of cars is a welcome development. Although cars brought into the country via the terminals may be more expensive than the ones which are to be smuggled via the borders, but it is still more beneficial, because buyers will be sure that they are buying a car that still has a lot of value. So let cars come into the country through the proper channel that guarantees greater value of the product.
We hear you are working on the Waterways Social Trust Bill. What is the progress of the bill in the National Assembly?
Yes, the Waterways Social Trust Bill would soon be presented to the National Assembly for passage. It may be new in Nigeria, but it exists all over the word. The bill aims to harness opportunities in the maritime sector and make it generate revenues from the businesses carried out on the waterways. The idea is that government should generate revenue from the businesses of oil and other businesses done on the country’s waterways. The revenue, which shall accrue to government from businesses on waterways, will be used to solve some challenges in the ports.
The bill provides that five per cent of profits made by businesses carried out on waterways should accrue to the government.
You said the bill is new in Nigeria. How well has it functioned in other climes?
Overseas, bunkering is a thriving business recognised by law as a means of livelihood and revenue generation for government. Unfortunately, it is grossly misunderstood in Nigeria and has been criminalised, and people now referred to it as oil theft.
What is the difference between oil theft and bunkering?
In other climes, bunkering is a business term. Those who engage in the business of bunkering are licensed to do so. They pay their taxes for bunkering and government makes revenues from it. Oil theft is when you break pipes and engage in lawless activities aimed at tapping oil. So, the bill will put a lot of things in perspective in order to reposition the sector for development.
Government should create incentives by slashing the custom duties on importation. There is need for a synergy in taxation: tax rates are too high, so they must be slashed down
How soon would you present the bill?
We are already tidying it up and sooner than you expect, we will be pushing for its passage, by God’s grace. Drafting is done, research too, so we are just set to present it to the House.
Aside from generating income for the government, what other benefit can Nigerians derive from the bill?
It would also address the huge traffic and infrastructural decay witnessed at the Apapa port. But away from that, the truth is, Nigerians overburden the government. They expect government to do everything for them, even when they still make huge profits from the ports and the overstretched infrastructures. I was in New York and I was surprised that terminal operators were happily building bridges in the port, because they needed to increase the height of the bridge in order for their ships to pass. They may just seek permission from government; but they don’t wait for government to fund the infrastructure upgrade. Waiting for government to do everything for you is like living in a rented apartment and expecting that your landlord will come and clean your house. So, we need a law that will provide for terminal operators to contribute to making the ports more conducive for business. When government gave lease of terminals to the operators, there was an agreement for them to maintain and improve on the terminals.
How is your committee working towards increasing the establishment of dry ports in Nigeria?
That is an important aspect of developing the sector. Let me begin by commending the Nigerian Shippers Council for its effort to create dry ports. The establishment of dry ports makes businesses easy and convenient, because people won’t need to labour themselves to the sea ports to get their goods. One dry port is already being operated in Kaduna, while more would be established in Lokoja, Enugu and other states.
Indigenous freight forwarders have sounded the alarm that foreigners were fast taking over the business from Nigerians. Would the legislature not move to ensure that businesses are controlled by Nigerians?
I don’t think so. If foreign investors are ready to invest in freight forwarding, I don’t see any reason why indigenous businesses won’t want to do same. Foreign partners are ready to make investments and reap large from the business.
All businesses have risks. Those who are risking their money will surely gain it somehow. Government is not in business; it has only retained its role as a regulator. So investors are free to invest according to the laid down rules.
I am a lawmaker and I expect propositions from business-owners who believe that new regulations should be in force to enhance businesses.
So indigenous freight forwarders should propose a position and we will examine it. If it is valid, we will fight for it. For example, we met with stakeholders and they explained why they failed to meet up with the GMT. Government policy is not stagnant, but flexible. It needs to accommodate all interests and sectors.
There is a long standing bill called ‘Ports and Harbours Bill’ which has been before the National Assembly since the 5th Assembly. Why has it not been passed?
It is one of the bills currently before our committee and we have put in place a committee that is reviewing all such bills we inherited and the ones brought to us.
