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CBi and MACN Explain Inefficiency At Nigerian Ports; Corruption Still A Problem

Doing Business in Nigeria	2752 VIEWS
Doing Business in Nigeria
2752 VIEWS

Saturday, October 5, 2019 / 04.00PM / Teslim Shitta-Bey, Managing Editor, Proshare/Header Image Credit: CBi & MACN

Deliberate violation of standard operating procedures (SOPs) and the rampant use of discretionary authority by port officers remain two of the most severe problems at Nigerian ports and a major cause of the country's inability to do better in its ease of doing business index, says a recent survey of the Convention on Business Integrity (CBi) and supported by the Maritime Anti-Corruption Network (MACN).

The Survey

The survey notes that there is a general awareness of standard operational procedures (SOPs) at the ports and terminals but officers working at the maritime facilities prefer to implement the SOPs in their breech. Circumventing the procedures allows port officials demand and receive 'service premiums' to facilitate the processing of cargo (see illustration 1 below).

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Reducing service quality or service scale offered at a lower 'official' processing cost (P₀), reduces port activity from Q₀ to Q₁, forcing those that want speedier service or improved service quality to pay P₁rather than P₀. This leads to a non-official service 'premium' of P₁-P₀ or what amounts to the price of port corruption.

The report notes that, "Many public officers are themselves insurance covers for many in their society where many are unemployed thereby further creating and fueling the propensity for cycle of corruption within the economic system of the port".

Additionally, the survey notes that port corruption has strong social undertones, "the common orientation in Nigeria is that the end justifies the means. Nigeria is a system where people do not ask how people do their work to earn a living but celebrate bogus and unsustainable lifestyles. For example, if a port official has a fleet of expensive cars and houses in highbrow areas of the country, Nigerians will likely not ask the source of income but only celebrate his/her time has come and even wish they were like him/her".

Using what the report describes as a PESTEL analysis which references political, economic, social, technology, environmental and legal issues at the port the report notes that the increased application of technology would relieve the ports of the burden of human intervention in the compliance with standard operating procedures.

The report further notes that that environmental conditions also strongly affect the ability of port officials to act in a manner that is consistent with best integrity practices. The survey observes that, "Based on the principle of Federal Character, postings in government establishments are often based on ethnic and political considerations and these affect the nature of operations at the ports. It affects how people perceive the ports and how they operate in them. Even though there are many ports in the country, there is significant power distance between the supply side and the demand side such that there are exercises of discretionary powers and demand for unofficial payments within a broader corruption framework"

On a strong positive side, the survey notes that the rules, regulations and general legal context of port operations are appropriate but the problem lies in the failure of port managers to implement the rules, guidelines and regulations. According to the survey, "Many existing laws, rules and Standard Operating Procedures (SOPs) only exist on paper while applications are poor as people rather operate informally and see the laws as meant for the management and not to be applied thereby making the ports run as business as usual. This creates a fertile ground for corruption and inefficiency. The letters of the rules and SOPs are not usually activated to combat corruption and in many cases, officials and customers innovate fresh strategies to counteract the laws and rules through which they create systemic legal, regulatory and administrative bottlenecks for personal gains and against effective ports operations and anti-corruption since corruption fail where there are seamless operations and effective rules and SOPs".

To explain the details of the survey analysis, the Convention on Business Integrity (CBi) and the Maritime Anti-Corruption Network (MACN) will be hosting a roundtable session on" "Service Delivery At The Nigerian Ports". The event will take place on Tuesday, October 8,2019 from 9.30am at The Providence Event Centre at No. 12A Oba Akinjobi Way, Ikeja, GRA, Lagos.