By TOLA ADENUBI

In the multifaceted and economically vital landscape of Nigeria’s maritime industry, the significance of proper funding and legislative empowerment for regulatory agencies cannot be overstated. At the core of this sector lies the Nigerian Shippers Council, NSC, a pivotal regulatory institution whose operations are constrained by inadequate funding, outdated legal frameworks, and limited enforcement capabilities. These limitations undermine the NSC’s ability to create a transparent, efficient, and competitive maritime environment, essential for Nigeria’s economic advancement.

Inadequate funding: A major obstacle

The NSC’s primary funding mechanism, the two percent Port Development Levy, has proven grossly insufficient to meet the operational demands of the Council. Compounding this challenge is the agency’s inability to implement the statutory one percent Freight Fee provisioned in its enabling Act. This funding gap has hindered the Council’s ability to discharge its regulatory responsibilities effectively.

Adding to these constraints is the Federal Government’s push for self-funding mechanisms across government agencies, as recommended by the Oronsaye Report. If implemented, this policy would strip the NSC of the Port Development Levy, a critical revenue stream. Such a scenario would cripple the Council’s operational capacity, leaving it unable to regulate a sector that is not only critical to Nigeria’s economy but also a cornerstone of its international trade infrastructure.

An outdated legislative framework

The NSC operates under the provisions of the 1978 NSC Act, a legislative instrument crafted during a period when the Nigerian Ports Authority, NPA, exclusively managed the country’s ports. However, significant reforms, such as the 2006 Port Reform, have since introduced private-sector participation into the sector. Despite these changes, the NSC’s legal mandate remains rooted in the outdated provisions of its founding legislation, limiting its ability to adapt to contemporary realities.

This legislative deficiency prevents the Council from adequately safeguarding the interests of shippers, importers, and the public. Furthermore, it hinders the NSC’s capacity to address the sector’s evolving challenges, including rising shipping costs, disputes over freight charges, and inefficiencies within the logistics chain.

A legislative lifeline: The Nigerian Shipping, Port Economic Regulatory Agency Bill 2023

The introduction of the Nigerian Shipping, Port Economic Regulatory Agency Bill 2023 offers a pathway to resolving the NSC’s legal and operational shortcomings. Currently under review in the Senate, this bill seeks to modernise the NSC’s legislative foundation by formally designating it as the country’s Port Economic Regulator.

If enacted, the bill would empower the Council with the authority and flexibility to address the dynamic and complex challenges of the maritime sector. It would provide the NSC with the tools to enforce industry standards, regulate shipping practices, and foster fair competition. Such reforms are indispensable for aligning Nigeria’s maritime operations with global best practices.

Consequences of an underfunded and underequipped NSC

The repercussions of an underfunded and legislatively constrained NSC are evident in its limited capacity to enforce regulations and mediate industry disputes. For instance, in a recent case involving CMA CGM, a global shipping giant, and ASPA POP Investment Limited, a Nigerian importer, the NSC successfully negotiated higher compensation for the importer over damaged goods. However, the Council’s limited resources hindered its ability to ensure full compliance with the resolution.

Such incidents underscore the urgency of empowering the NSC with sufficient funding and an updated legal framework. Without these, the Council cannot fulfill its role as an impartial arbiter or enforce regulations effectively. This creates an environment of inefficiency, mistrust, and economic stagnation—dynamics that deter investment and stifle the sector’s growth.

The broader implications

Beyond dispute resolution, the NSC plays a critical role in monitoring shipping charges, curbing extortion, and addressing operational bottlenecks within the maritime value chain. A well-funded and legislatively empowered NSC would enhance transparency, reduce inefficiencies, and safeguard stakeholders’ interests, thereby promoting the growth and competitiveness of Nigeria’s maritime industry.

Conclusion: A call to action

The enactment of the Nigerian Shipping, Port Economic Regulatory Agency Bill 2023 and the provision of adequate funding to the NSC are urgent imperatives. These measures would position the Council to act decisively in regulating the maritime sector, ensuring fair practices, and driving Nigeria’s economic development.

In the broader context, the success of Nigeria’s maritime sector hinges on the strength of its regulatory institutions. By addressing the foundational issues of funding and legislative reform, the Federal Government would be investing in a maritime industry that is not only globally competitive but also a catalyst for national growth and prosperity.