Ismail Yusuf is the Managing Director of Inland Containers Nigeria Limited (ICNL), parent company of Kaduna Inland Dry Port. In this interview with ADAKU ONYENUCHEYA, he talked about how insecurity in Kaduna has affected patronage and the high cost of freighting cargoes by road.
There is irregular rail movement from the port to the hinterland for obvious reasons, including security. To what extent has it affected your company, in terms of cost?
It is not only irregular movement but there are also some non-functional elements in terms of freight by rail movements. You are aware that the Federal Government started the construction of a standard gauge from Lagos to Ibadan to start with. Even though the plan was to get it to Kano, the one to Ibadan has been completed. The passenger train has been working and recently, the railway corporation said they are ready for freight movement from Apapa port to Ibadan.
In terms of cost, the effects of it on ICNL are enormous because presently, no one worldwide can compare the charges of rail movement to that of road and we all know the latter is more expensive.
Presently, the cost of taking a truck from Lagos to Kano is about N1.6 million and N1.4 million to Kaduna. This situation has been worsened with the increase in the cost of diesel and if you compare it with rail movement, you discover there is more than a 400 per cent increase because rail does not charge more than N400,000 or N500,000.
This has affected our business seriously because most of the importers that patronise us have reduced the number of containers they bring into the country as a result of the high cost of transportation from the seaport to the dry port.
It is affecting the hinterland transfer seriously; not only inland containers or our company but also every company that operates terminals on the hinterland level.
Your company discussed with the Niger Republic government on possible patronage of the Kaduna Inland Dry Port. What is the update on this?
In 2019, the management of Inland Containers Nigeria Limited and the management of Kaduna Dry Port visited Niger Republic. We discussed with their Chamber of Commerce for patronage and cost-saving if they patronise Kaduna Dry Ports because Kaduna is closer to Niger Republic than for them getting their cargoes through Cotonou in the Benin Republic.
After that visit, they promised to come to Nigeria and visit Kaduna Inland Dry Ports to see the facilities we have in place. Unfortunately, the pandemic disrupted the arrangements and we could not receive them in the country; however, we continued to keep in touch with them and they promised that when things are settled, they would visit so that we could sign a Memorandum of Understanding (MoU) for possible movement of cargo from Kaduna to Niger Republic.
Recently, they wrote to us that they are coming to see the facilities as discussed. The day before the scheduled date, after we had made all preparations to welcome them, including alerting security agencies, we got another letter through the Nigerian Shippers Council (NSC) that they would not be able to make it as a result of insecurity issue in Kaduna. That was why we could not receive them.
We plan to contact them when there is improvement in security in the country and invite them to visit Kaduna Inland Dry Port so that we can have a business partnership.
With eight months left for this administration to leave office, what advice would you give to the new transport minister? Which areas would you want him to prioritise?
Time is short and I believe that whatever plans he has would be difficult to achieve within the short period.
But, firstly, for the economy of any nation to grow, transportation is very important, both for import and export. When you are talking about transportation, rail is important as well as road, but since we know that the latter is bad and costly, I will advise the minister to ensure that the takeoff of cargo from the seaports to Ibadan by rail starts immediately, so that people coming from the North will be able to pick their cargoes in Ibadan, instead of having to face the gridlock in Lagos, which costs more time and money.
How do you think the designation of Inland Container Depots (ICDs) as ports of origin and destination will boost economic activities in the country?
If a dry port is designated as a port of origin and destination, it is as good as calling it a seaport, because it offers all the benefits of one. The only difference between seaports and dry ports is water for berthing vessels, but you have a rail terminal and access roads, and for that reason, if there is easy movement of cargo from seaports to the hinterland, the people of the hinterland will be able to, at least, receive their good orders from abroad.
This will reduce the hurdle of having to come down to Lagos with the numerous costs attached. Because the dry port that you have consigned your cargo to, will do all that stress on your behalf; all you need to do is get to the dry port location through your agent, pick up your cargo and move them to warehouses.
Secondly, if you have goods for export, you will also do it from that dry port, your cargo will be examined there and all necessary checks carried out by relevant agencies and it will be sealed from there and moved by rail to the sea port where it will be loaded onto a vessel for shipping.
I think doing that will reduce double handling, as well as the cost for the exporter, and you will discover that those dry ports too will develop with different types of small-scale factories, where packaging and cleaning of items and treatments of containers can be done.
In this type of situation, you will discover that the states where the ICDs are located will record economic growth, as well as an increased rate of employment.
How has the exchange rate crisis affected your company?
The exchange rate has affected maritime business generally because, in the last three years, it moved from N180 to N200 to N360 and N500, now it has got to as high as N680.
Just last week, it fell back to N650 or so. And you discover that even though the rate has gone up, the forex is not even available. If you even apply to the Central Bank that you are doing a genuine business, you still would not get it.
Take, for instance, my company wanted to import an empty container handler that will be used in Kano for operations, which is about 200,000 euros. Eight months later we haven’t been able to get up to 50 per cent of the required money through normal bidding.
We have to source the difference from the black market at a higher rate. This is how exchange rate affects us the operators of dry ports and bonded terminals. It is also affecting our customers who are importing items. They cannot find hard currency through the Central Bank of Nigeria (CBN); the majority of them find their money through the parallel market, and it is not good for the business and economic growth of the country.
With the current exchange rate, people that import about 50 to 100 containers a month can’t do that again and I don’t know what the government is doing about this.