Harsh economy has reduced imports – CEO Genesis Shipping

The Chief Executive Officer of Genesis Worldwide Shipping Company, and Integrated Oil and Gas, Capt Emmanuel Iheanacho, speaks on the challenges in the maritime sector and the way forward in this interview with ANOZIE EGOLE

In your view, what are the current challenges in the maritime sector?

When you say current challenges, that is a broad question. The challenges are broad. I would like you to narrow it down.

There has been a drop in the importation of goods. What would you say about this?
It is not a maritime issue. It is a trade issue. The economy is contracting and if the economy is contracting and there is not enough money to import goods, then it is bound to impact the means of transport that hitherto brought goods in or out of the country. So that is what it is. If the economy improves, there will be an improvement in maritime trade. They are interrelated, you can’t separate them.

What is the update on calls for port rehabilitation?

Yes, you know that contract has been awarded for the rehabilitation of the Tincan Island Port and it is a multi-billion dollar contract. I can’t answer if they have started. All you need to know is that they are aware that the ports need investment and a budget has been committed to it to carry out that and someone has won the tender.
What would you say about the delay in the disbursement of the Cabotage Vessels Financing Fund?

We all contributed to the Cabotage Vessels Financing Fund and I feel bureaucracy is the reason why the fund has yet to be disbursed and people would like to be very careful. It is a political fund and nobody wants to be accused of rushing off to distribute the fund and at the end of the day, if it didn’t work they would hold the person responsible. So every director-general that had been through that position was very careful. I think that is part of the issues we are facing at this point.

People claim that the fund belongs to the Federal Government and not shipowners, do you agree with this?

Well, it must belong to someone. I mean when you are accruing a fund it is going into an account and who owns the account? The owner of the account is the owner of the fund, it doesn’t belong to shipowners, and it belongs to the Federal Government. It is a fund that has been accrued by the government and they have guidelines in terms of how they are going to use it. So it doesn’t mean that it is a fund that is being kept for shipowners to come and say we want to have our money.

But it was contributed by shipowners?

It doesn’t matter. The tax that you contribute to the Federal Inland Revenue Services, do you have a say on how the money is disbursed? You don’t. So that is it, it belongs to the Federal Government. The only thing is that people have got to continue to pressure the government to make them ultilise the fund the way it was recommended and meant to be used.

Shipowners say Nigeria is losing so much to foreign dominance in the maritime sector. Is this true?
Several things happen to cargoes that leave our shores. First of all, it is taken, and transported to foreign refineries and then you add refining to it and transport it to bring it back to Nigeria. And I am saying that if you internalize these things, transport going out, refining it, and bringing it back, you would have dollars that you didn’t have before. I don’t know if anybody hasn’t done this basic arithmetic before. If I say it to Mr President he will see it that is a huge amount of money for him to realise for projects and all kinds of things.

How can this be addressed?

If the people who are in charge of the government ask a follow-up question and I explain to them and they carry out the small experiment and they see it, then they know that there is money that is there. The money is not hanging, if you don’t get it, someone else is getting it. The person who supplies the ship is getting it and the person is not Nigerian. The person who owns the refinery is not a Nigerian but he is getting the money. The person that brings the cargo back here into the country is not a Nigerian but he is getting it. So these monies are going out every year. So what I am saying is to internalize the process and realize the monies yourself.

Do you think the Dangote Petroleum Refinery can help in tackling most of these concerns?

I am not going to say anything about it. The facts are very clear and you are a Nigerian. Dangote has finished building his refinery. Left for me I would say that Dangote should go into the market and try to sell. Dangote would compete with those who supply fuel from outside. If his product is cheaper we would buy from him, but if is more expensive we would buy from other people. But what we don’t want is for someone who is not a supply person to come and insert himself there and say I want to be part of it. You are just putting additional cost when there is not supposed to be any cost. There are two suppliers now, Dangote on one side and foreign suppliers, check both of them, who’s product is cheaper than the other? That is the one we are going to buy.

As a former minister of interior, how would you compare what we had then and now?

I haven’t been looking at the ministry recently to know what they are doing and what they are not doing. Another thing I won’t do is become an examiner to the current minister to talk about the things he did and what he didn’t do. We did our jobs when we were there, the minister that is there now has responsibilities he would attend to them, and he is trying his best.
Agro exports from Nigeria are rejected due to poor packaging and other issues. How can this be addressed?

It has to be addressed by the owners of the cargo by having a look as to why the products are described as being of poor quality and then finding a way to deal with the issue. You deal with the issue including the packaging. I am not a packaging expert, you have to go and look for standard packaging to which other ones should follow. If you find out that yours is deficient, go to a packaging company and ask them to develop a proper packaging for you and you deal with the issue.
What is the major challenge of running an oil firm like yours?

There are lots of problems. You know we invested billions of our money building infrastructure in the form of tanks, pipelines, and all of those things. If you don’t have a fair means of cargo being routed to those facilities, if you have a situation where there is an entity that claims to have a right to allocate cargo to those things and does it in such a way that is neither fair nor equitable, then there are lots of problems. Jobs are going to be lost because businesses are going to close down.

Are you encountering such challenges?

Well, we are encountering very serious problems including what I just told you.

Can you estimate how much you have lost to these challenges in recent times?
I can’t tell you. It is huge. In the last two years, I haven’t traded, I lost a lot of money. It’s huge I can’t tell you, I can’t give you any problem.

How do you think the government can come in here?

Well, to ensure that there is fairness and equity and that whatever we do makes logical sense. Otherwise, there is no point.

Apapa is said to be littered with tank farms, what is your opinion on that?

It is not littered, those tank farms were built because it is necessary to build them. Let me tell you something, if you import a petroleum product or even produce it at Dangote, you can’t take that product and throw it straight into the tank of a car. It must make a transit through a depot. If you are importing you must take a ship, go down to the mother vessel, collect a product, and take it to a depot and put it there, then trucks would come and take them.

Even if it is from Dangote, he has a huge vessel outside his refinery where he pours all the products that he is making, and from there, other vessels would come and collect. If you don’t allow Dangote to do that, I don’t know how he would distribute them. The distribution infrastructure is a function of demand. It is not a question of whether I like you or not, is there a demand for it? If there is, can you borrow money from the bank? You borrow money and you develop all of those things. That is how it works, they are not littering anything.

And by the way, let me tell you when I show you a glass of water and it is half full or empty? You would see it is a big puzzle. The reason I ask this is because there are many tank farms in Apapa and they haven’t exploded all this while. Is it a testament to how careful people have been? Or do you wake up one day, to something that hasn’t happened you start shouting that it would happen and people will say we have been here for 50 years and non has happened. Is it a good thing or a bad thing?
They are saying that the tank farms are also causing congestion.

They are not causing any congestion, what are you going to do otherwise? You want to move them elsewhere; wherever you move them the same problems you were trying to avoid here would follow it down there. Whatever problems you are dodging here will follow the tank farms there that you are going to build.

Is the Nigerian Midstream and Downstream Petroleum Regulatory Authority collecting a $2,000 registration fee from shipowners?

They are not collecting $2,000. They are collecting more than that. You have to source for the money, which is $2,000 when you are running a huge tank farm. They are collecting 10 times more than that so it is not a $2,000 issue. But they are collecting them for a purpose. One is for administration, and the next is for other things that they do.

How safe are our seafarers at the waterways?

They are very safe; I don’t see any outstanding safety issues as regards seafarers in Nigerian waterways.

There was a recent surge in kidnappings on the waterways. Why?
The kidnappings have gone down. I don’t think it’s on the high side now, so much more that they have removed Nigeria from war-risk countries. The excess insurance that people pay for cargoes coming to Nigeria, we are fighting to get them knocked off because we don’t think that Nigeria is actually in a war risk zone.

International vessels are avoiding Nigerian waters because of the menace of drugs. What’s your position on this?

Yes, the vessel owners would incur losses if someone on their vessels is detained for one infraction or the other. Chances are that they are going to stay there for a long time. If there is a court case involved, the court doesn’t decide those cases quickly. So the detained person or people will stay there (detention) for a long time.