The Executive Secretary/CEO, Nigerian Shippers’ Council (NSC), Mr. Hassan Bello in this presentation highlights the role of NSC as the economic regulator of Nigerian ports and its effect on the industry and the national economy.
After the implementation of the Federal Government’s port reform programme which led to the concession of port terminals to private operators, the Government noticed a disturbing vacuum in the sector, namely, absence of an Economic Regulator that will act as a referee in the industry. This vacuum has made it difficult for the nation to enjoy the gains of the programme.
The inefficiency in the procedures and operations of agencies and service providers and even users is adversely affecting and undermining Nigeria’s competitive advantage in international trade.
In a deliberate remedial effort the Federal Government in February 2014 appointed Nigerian Shippers’ Council the Interim Economic Regulator for the ports sector.
Economic Regulation is an attempt by Government to monitor and correct any disorder in the working of a free market to address anti-competitive behaviours.
Economic regulation focuses on: Market Rules; Tariffs; Quality of Service; Access and Incentives regulation.
The global competitiveness of Nigerian Ports has a major role to play in the attraction of Foreign Direct Investment. Port Reform no doubt has brought in tremendous benefits to the national economy. However, there is still the need to harness other potential areas of the Port Sector with a view to bring down the cost of doing business and enthrone efficiency.
Nigerian Shippers’ Council was appointed the Port Economic Regulator mid-way after the Ports and Terminals were concessioned.
The Nigerian Shippers’ Council recognised the fact that there existed gaps in the Port Sector and this led to increasing clamour for an Economic Regulator by stakeholders. In our capacity as the Port Economic Regulator, our role is to consult, coordinate, moderate and harmonise the various processes and procedures with a view to achieving operational efficiency at our ports.
To assess options for competition; To decide on entry rules; To regulate on pricing freedom and to monitor outcomes.
Enforcement and efficiency
Where there is unreasonable resistance, we shall not hesitate to apply appropriate sanctions to ensure compliance.
We shall remain open, independent, neutral and consultative and all decisions will be based on the buy-in of stakeholders. Finally, we wish to note that NSC is not competing with any other Government Regulatory Agency but thrives to actualise the mandate of making our Ports the Sub-Regional Hub and International Logistics Centre.
An efficient and effective regulator plays the following roles: Analysts/Strategist; Advocate; Detective; Prosecutor; Judge; Negotiator; Educator; and Manager.
Effective regulation requires much more than just competent economic and financial analysis but must also manage often complex interaction with the regulated firms, consumers, politicians, courts, the media, and a range of other interests; Regulators need to provide a level playing field amongst competitors; A Regulator needs to be independent, transparent, legitimate and credible;
Managing the transitions to a competitive market is a major regulatory challenge; the regulatory process should be fair to all parties (procedural transparency, lack of arbitrary decisions, balancing the needs of stakeholders). Professional development of staff of regulatory agencies is essential.
The involvement of stakeholders is an important source of legitimacy and public acceptability for regulatory agencies and their decision-making procedures.
Communication: information to stakeholders on timely and accessible basis;
Consultation: stakeholder participations in meetings promotes legitimacy;
Consistency: across market participations and over time;
Predictability: a reputation that facilitates planning by suppliers and consumers;
Flexibility: use appropriate instruments in response to changing conditions; Independence/Autonomy- free from undue political influence;
Effectiveness and efficiency: cost effectiveness emphasised in data collection and regulatory policies;
Accountability: clearly defined processes and rationales for decisions and clear appeals procedure; and
Transparency: openness of the process.
Effect of economic regulation on regulated entities in the transport and logistics chain:
(1) Seaport terminal operators
Protection of their investment from undue interference leading to: Guaranteed Return on Investment; and Increased Profitability; Predictability in processes and procedures.
Improved Revenue Generation; Improved Infrastructural Development; Creation of Efficient Market; Reduction of cost of doing business; Improvement of the Nation’s Global Competitive Index and consequent attraction of Foreign Direct Investment (FDI).
(3) Shipping companies
Improved Delivery of Marine and Terminal Handling Services leading to: Reduced Turnaround Time of Vessel; Reduced Cost of Vessel Operations; Improved Image due to increased Customer Confidence.
(4) Freight forwarders
Professionalisation of Freight Forwarding Practice leading to: Elimination of Touting; Sanitisation the Port Environment; and Promotion of Global Linkages; Harmonisation of Clearing Processes and Procedures and the consequent reduction of clearing charges; Strengthening of Complaint and Arbitration mechanisms.
Other Regulatory Agencies
Nigeria Customs Service (NCS)
Improved Revenue Generation; Enthronement of clearer Standard Operating Procedure (SOP) derived from International Conventions and Practices; Transparency, Efficiency and Effectiveness and consequent improvement in Image; Improved Level of Compliance by Importers, Exporters and Freight Forwarders. Effect of Economic regulation on truckers
Decongestion of Port Access Roads leading to Improved Truck Transit Time at Ports; Re-Fleeting of Rickety Trucks; Instalment of Electronic Gating and Call System; Guaranteed Loading Opportunity for Truckers.
Finally, we wish to note that NSC is not competing with any other Government Regulatory Agency but thrives to actualise the mandate of making our Ports the Sub-Regional Hub and International Logistics Centre.
On this note we call for the support and cooperation of NPA, NIMASA, NCS, NIS, SON, NAFDAC, Nigeria Police, and all other stakeholders. We shall also rely on the political will and support of Government to enable us succeed in this our assignment.