Kingsley Igwe,Registrar of the Council for the Regulation of Freight Forwarding in Nigeria sat with the JournalNG team in Lagos for an exclusive interview.
He gave an insight into his immediate, medium and long term plans for the council and explained his strategies to build council’s employees and and stakeholders capacity
Excerpts:
Q:Give us an overview of your immediate, medium, and long-term plans for the Council for the Regulation of Freight Forwarding in Nigeria.
On the immediate, we are focusing more on stabilizing CRFFN internally, owing to the journey of the Council so far. We’ve dealt with a lot of crises, both internally and externally. To God be the glory, we have to an extent, addressed most of those issues that had destabilised internal management and internal control within CRFFN.
Again, we have been able to offset some of the troubling concerns over time, which contributed to the stability that we are enjoying today in CRFFN. To cap it off, we, in CRFFN today, have a relative peace internally.
However, we are not losing sight of the fact that there is bound to be some external influence .The staff are all happy. They have returned back to work and everywhere is getting busy. We have a better environment for the staff to work, especially from the headquarter.This has also extended to other zones.
On the medium term, we have developed reforms to our regulatory tools in order to strengthen the regulation of the industry, because without that, we cannot be able to have a very strong control of the industry.
We have come up with policies which are still being reviewed. Some are already in the pipeline, especially when it comes to licensing, standardisation and digitisation which will keep up the campaign and then designing a better system for actualisation of our mandates, especially when it comes to education and training.We have designed the systems that will take them through the processes they have to undertake to be professionalised.
All of this is geared towards helping us to set out the trend for the long-term targets that we want to achieve, which include ensuring that the council now bounces back to be at par with other regulatory bodies elsewhere ,outside the shores of Nigeria, which speaks to standardization of industries, harmonization of standards and practices while leveraging on technology. All of these are not easy. We’re also having a very minimal space here that we are managing.
I can say for sure that CRFFN is currently squatting here, which is not conducive. On the long-term, we plan to have headquarters of our own, of which the conversation is ongoing. The planning for us to have a conducive environment to comfortably and conveniently discharge our mandates is ongoing.
Even the practitioners can have a place of contact at their own convenience to the council .They can also access some of the services that we offer.These are, just in summary, the short-term, medium and long-term plan that we have set out.
Apart from that, integration with international bodies like International Federation of Freight Forwarders Associations (FIATA) and the rest of them, in order to also bring home what is practiced in the global space.We are doing that under the foreign collaboration package that we have designed.
Q:How do you intend to build freight forwarders’ capacity, which I know is part of the mandate of the council?
Quite frankly, building capacity is not easy. It’s not just about building capacity, but professionalising the practitioners such that when they find themselves outside this domain, they can be able to stand with confidence, chest up and compete in the global space. So to do that, we have also designed training programmes in two pathways to help them upskill and expand the knowledge of the industry which they practice.
For example, we are issuing training on certificate programs that will help them to gain basic knowledge of their respective services. Whatever aspect of the service they find themselves, whether under haulage, freight-forwarding, courier services, warehousing, or even custom brokerage and more. It is specific to what they do.
We have designed a curriculum. Before now, there have been a lot of gaps in that space due to the content of the curriculum not meeting the daily needs of the practitioners. We’ve been able to fine-tune this curriculum with the help of experts in the industry and outside the industry.
We’ve already launched out with the training of almost 300 practitioners at the airport in collaboration with Federal Airports Authority of Nigeria (FAAN). That has been achieved and we are replicating what we have done down here at the seaport corridor. We are also going to extend it to land borders and other parts of Nigeria where these logistic services are found. In addition to the professional pathways is the licensing pathway which has to do primarily with the licensing of corporate organizations, companies, and the rest of them.
I always like to explain that freight forwarding is not just individual based. It is not a practice of just an individual person. What I mean by that is that it requires you to have a corporate name even though you are an individual practitioner.That corporate name is what you will use to interface with other service providers or regulatory agencies like customs, Standards Organisation of Nigeria (SON), and the rest of them. If your name is Chukwemeka in the Bill of Laden, shipping line will not invoice Chukwemeka.
But if it is Chukwemeka Enterprises, the shipping line will invoice Chukwemeka Enterprises. That is what they will request because logistic services require people to have a corporate name to make it formalised. People have not really realized that the business they do is not a common business. This is an industry, a multi-trillion dollar industry that requires people to upgrade themselves to what is also practiced in the global space.
By that ,we have developed the licensing pathway for corporate entities. Now, it is difficult for people who do not have basic business knowledge to key into this, thinking the name agent is enough for them. I don’t blame them. This time around, CRFFN wants to change the orientation by first of all granting them access to education, the basic fundamental knowledge of logistic services through certification. By the time they get that, they will be certified as certified logistics practitioners and that will qualify them to go further to operationalise by obtaining license.
When they have registered the corporate name or their company, we will now be able to license them as long as they qualify according to the criteria that we have set out. With that, they can beat their chest confidently and source for business in any part of the world. This is how we want to professionalize them properly. When we have more logistics service providers, we will have more proficiency. We will have improved proficiency in the terms of logistics service delivery in Nigeria, but without that, we will still be where we are today.
Q:What would you consider the biggest challenge since you assumed office?
Quite a lot. First, the crisis in CRFFN was one challenge that we needed to mitigate, and then I had to start by engagement and consultation. Warring parties have to be brought together on the same table to talk about the issues. We have done that largely enough and it has helped us to calm nerves down.
Another one is the issue of funding. The funding that was not there, the Internally Generated Revenue was not robust enough in terms of inflow received, and also the challenge of high expenditure, cost of running the council. These were challenges.
What we did was to speak to the Oversighting Agency, I mean the Ministry(of Marine & Blue Economy), under the leadership of His Excellency degboyega Oyetola who came immediately to our rescue and helped us to get back into budget so that we can be able to access federal government funding to carry out some of the functions that we need to carry out. Apart from these, we have largely enough infrastructural decay, which we are still battling with today. That is why I mentioned earlier, that we are squatting here. If we had headquarters of our own, I don’t think we would be squatting here.
The same thing happens in other zones where we have facilities. Another one is the issue of manpower within the council.There is a difference between workforce and manpower. I think what we have here at the moment is workforce ,we don’t have manpower.What I mean by that is, we need to do massive skill development of the employees, and I have been talking to the relevant departments.
As a matter of fact, the Head of Civil Service and also the Ministry, are very interested to help us give the requisite training, especially when it comes to obligation of government procedures and the rest of them. I’m also talking to some logistic companies, to have my staff posted to their companies, just to have hands-on training, practical, so that they can have a feel of what logistic service is all about.
Not that we are regulating and they themselves cannot even speak about it. So we are doing that in Abuja and Lagos. This is part of the collaboration that we have used to mitigate the issue of deficiency in workforce development.These are a few of the challenges. There are quite a number of them, but I think we are surmounting them already.
Q:Tell us about Practitioners Operating Fee (POF) and salaries.Is the POF rising from what you met? Is there a decline? Concerning the intervention for salaries, because you are now in the budget. If the feeding bottle is removed from your mouth suddenly, can CRFFN survive?
That speaks to revenue, generally. First and foremost, let me thank His Excellency once again, who intervened to help us get bailout from our sister agency, which we used to settle the backlog of salary that was owed for over 10 months. That was before I came and we have been able to solve that.
Again, when I came in, I saw the reason why salary was owed. It’s so disheartening, but we can’t complain. All we did was to roll up our sleeves and try to find or explore what solutions can we put in place to mitigate those challenges. One of it was, like what I explained earlier, getting back to the budget, which was very essential, to give us a leeway to breathe, so that we can now strategize and develop our own internally generated revenue. In that sense, what we are now doing is to expand our revenue coverage, not only depending on POF, because over the years, the council has relied on what comes from POF collection.
But this time around, we are changing that. POF will not be our only source of revenue. Let me not spill the beans, because we need to get the appropriate approvals before we can be able to let the cat out of the bag . Those are the areas we have mapped out as an expansion for our revenue generation. So it’s not only going to be on POF . However, internally, the issue of licensing, education and training that we provide, and we have improved on them.We are also going to contribute to our Internally Generated Revenue larger than it used to be because of the strategy we have mapped out in order to achieve more with it.
Q: Tell us about your relationship with the various associations under your regulation. What has it been?
Well, the relationship between the council and the freight forwarding associations has been cordial. You may be surprised when I used the word cordial, because sometimes power intoxicates. When one person holds power, they flex it like as if that is the ultimate. You find out that sometimes when you look back, those who are subjects behind you, might not even be in support of what you are doing. That is what is happening currently.
Now , it looks as if there are issues there. There are no issues. It’s only a few people who think they have too much power controlling the association.An example of such cordial relationship is from the recent training we had at FAAN , all the associations were represented. Even people who do not belong to the associations attended. They participated in the training . The stakeholder engagement we had recently had many attendants. They came from all associations.
The relationship has been cordial, and we have been having this communication internally, both with individuals and with respective groups among them. However, I cannot deny the fact that some of them, especially judging from what happened recently regarding the court ruling where it looks as if some them happened to gang up and flex a little more muscle. But today, you can’t hear about it anymore, because that has been taken care of. The relationship has been very cordial. There is no issue.
The only thing is just for us to focus on our core mandate, which is institutionalising professionalism in the industry, standardizing the logistic services provided, and upgrading the quality of service that is provided through digital means that is leveraging on technology.
They will have to upgrade to the required level because today, we are talking about logistics advancement. You can hear of national single window. It is not going to be manual service, it’s more digital-based. Most of the operations at the ports are also digitalized.
Customs has improved so, if you are providing services and interfacing with these institutions, definitely you will need to upgrade and our focus is to help them upgrade. I have explained that which happens to be the pathway for professionalism, educational training, licensing certification, and all of that.
Q:Three years back, I was fortunate to visit the NIFF(Nigeria Institute of Freight Forwarding) in Abuja. I was also at the commissioning of the CRFFN regional office in Kano two years ago. We also know you have offices and outstations in other parts of Nigeria. What’s the state of these facilities and what are their contributions to the council?
It is easier to destroy, but difficult to build. What I mean by that is, you can bring down a three-story building in less than one hour. But to build it back and put everything in place will take time. That is what CRFFN is undergoing. When you talk about the state of facilities and all of that, it’s not something to be proud of.
Most of the zones are not in the right shape which they ought to be. But this is part of what we have inherited, and we need to fix . That is why we have the budgetary provisions to fix most of these things.All of that is already in the design and we are working towards that. In the next one or two years, if you come back and ask me the same question, I can be able to give you statistics of what has been achieved there with us.
Q:Last two years, JournalNG had reported that there was a N900 million Naira kept somewhere for purchase of headquarters building for CRFFN in Lagos. Where is the money and what’s the state of the purchase?
Quite frankly, it’s a subject I don’t like talking about because, I came here with a different mindset. The figure or the money you talk about has generated a lot of issues before my coming.Somehow, it doesn’t have to be the status quo. There are always one thousand and one ways to kill rats.
For me, I will build a headquarter for CRFFN with the support and cooperation of all stakeholders involved. But, will I be interested in the money or whatsoever? It is actually earmarked for construction, not purchase. I mean construction of headquarter building.We are still hoping that we can assess it and be able to utilize it. But with what is happening in Nigeria, you know what I mean and I don’t have to go into details.
I also have alternative means of sourcing for funds and erecting a headquarter under a very conducive arrangement. It doesn’t necessarily have to be that. If you ask me, I also don’t have an account of where the money is and what is the state of it because I am not chanelling my energy to that. I am taking things according to how I listed them in my list of priorities.
Q:Let’s look at the recent court judgement . What’s CRFFN lastest position on that?
We have appealed already. Right from time, we made it clear that the judgment was not the right one. However, the case is in court. Somehow, it won’t be very okay to talk too much on it as the law demands, so, I think the only answer I can give is that we have appealed it and let’s wait for the court to conclude on it.
Q:Tell us about CRFFN’s contribution to the growth and development of Nigeria’s Blue Economy and how we intend to have Nigerian freight forwarders benefitting from the Africa Continental Free Trade Area (AfCFTA)
Okay, so, if you were at the recent conference at Lagos Chamber of Commerce and Industry (LCCI) there was something they asked and I answered that clearly. It was a similar question . We need to help practitioners understand how to maximize profit in the industry and not the other way around. One of it is, what are those avenues by which they can conveniently make profits? We have African Continental Free Trade Area. It depends on the context in which you are using it, which you just mentioned.
Q:How can freight forwarders leverage on that instrument and be able to make profits? We have trade agreements with other countries and regions. How has freight forwarders leveraged on it to maximize profits in their business?
These are all still on the embrayo stage. They need to be guided and properly educated on what those trade agreements mean and how to leverage on the terms of those trade agreements. Specifically, for African Continental Free Trade Area, it is meant to achieve free flow of goods, persons, capital, services across borders within the African continent. This is like treating Africa as one marketplace. It is not easy for an item produced in Nigeria to go across the border and enter places like Republic of Ghana. There are rules that should govern the movement of such items, and that is when you talk about rules of origin that need to be applied and observed. Freight forwarders need to understand what rules of origin is, what makes an item originating from a particular country and how to calculate the percentage of local content that qualifies an item as originating, such that they can be able to declare it on the documents and the goods can easily enjoy that free flow that is being targeted. This discussion has not come on the table yet.
I want to spearhead it and impute it as one of the educational contents for freight forwarders to begin to understand when we say African Continental Free Trade Area, what does it mean? That is one. If they leverage on that, we can find out that goods can actually come into Nigeria almost free of duty charges and levies.
What that means also is that a freight forwarder can be able to make more profits if he knows how to permutate around the charges and services provided and also increase the volume of transaction that they handle legitimately.
Another area is still on the concept of rules of origin and contents it enjoys. Bilateral agreements ,multilateral or even regional agreements with other continents, countries and regions have not been leveraged on by us.This is where freight forwarders also need to be trained to understand how to make declaration on either import or export using terms agreed upon, especially when it comes to duty and preferential treatment on those consignments, depending on the origin. Freight forwarders need to know those terms.
I want to use this opportunity to implore the Ministry of Trade and National Trade Facilitation Committee to be up in their game in this sense because the onus lies on them to give us clarity on the content of those agreements.It has not come in public place. Journalists like you can do some investigative findings on that. It is important for every manufacturer to know all of these agreements, the terms in them, and what they could benefit . Then the freight forwarders can be able to leverage on those terms.
Now these are things that CRFFN has identified and are putting in place because they form part of what I call knowledge gap in the industry. When these things are not exposed to them, how do you expect them to be proficient? How do you expect them not to make mistakes when they are making declarations? We want to bring them up to speed and I am not doing it alone. I am collaborating with several agencies to be able to spread the push for this particular move.
Let me use customs for example, some of the processes are not standardised across customs stations nationwide. So, it is also important for us to make freight forwarders understand what is the standard level flow.
I will begin to advocate that processes and procedures should be standardized as it applies to World Trade Organization, trade facilitation agreement that was signed in 2017, which one of the pillars says all processes must be harmonized with international conventions, and they should be standardized across all stations.
Customs is one of it. Other agencies practices and procedures are some of it. The way you obtain import license from SON here in Lagos, is not the same way you obtain it in Port Harcourt. That is what I mean in simple terms. The process you undertake in making declaration for import, in Tin Can Island Port for example, is not the same as Lekki Deep Seaport. For the same item, they are not standardized.So, it becomes too irrelevant, and that is what confuses people. You go here, it’s different and when you go there, it’s different. People become confused, not as if the processes are too cumbersome. No, they are not cumbersome. Go to China and India, it’s not like that. Netherlands, Singapore, it’s not like that.
Q: Let’s look at your enabling law and the Nigeria Customs Service Act 2023 . Some stakeholders are calling for a review and amendment. Would you also subscribe to the notion that to obtain a customs license, people should get a CRFFN license, or customs law be amended to accommodate CRFFN endorsement as a prerequisite for obtaining a customs license?
The reason I’m going to speak on that is for the fact that the previous Customs and Excise Management Act has been overridden by the recent Customs Act 2023 and because we have a case in court, it’s clear to put them in perspective that it was based on CEMA, not based on the Act 2023.
You will find that the Customs Act 2023 has clearly defined the freight forwarder in that act as somebody who provides services, logistic services, around the clearing corridors that we have, whether it’s air or land.
However, CRFFN does not have an issue with that, but the law is the law. It is important for us to have mutual understanding. We’re not going to have issues or more comments about that. It is important for other agencies to respect what is statutory.
The issue has not been brought on the table for further discussion, maybe that is why we’re experiencing what we’re experincing. So, Customs is required to confirm the proficiency or competency status of somebody who is applying for Customs License.
And you may ask me, why did you speak of Customs License Agents and at the same time you speak of CRFFN License? These are two different things. Two different things in the sense that Customs License empowers you or gives you the permission to interface with Customs or Custom-related matters in any Customs station. What that means is it makes you a customs broker. Similarly, if you are to own a fleet of trucks and provide third-party trucking services, it will require some haulage license. Then you go to the appropriate authority and obtain that license. You can’t just begin to operate. You also need to certify the roadworthiness of those vehicles. So all of this, like Customs License. Warehousing is the same thing.
You can’t operate a proper warehouse, whether bonded or whichever without obtaining the appropriate license for it to practice. It’s the same thing with courier services. You can’t operate as a courier operator without obtaining a license from the appropriate agency.
Now, all of these are the same with Customs License, but all of these that I have just mentioned are all logistic services, which require a proof that you are competent, because it is very technical. That is where CRFFN comes in, to issue now an overrall license.
So the license is what qualifies you as a logistic service provider that you have been subjected to the requisite training and you have been deemed certified. That is what the license talks about.You are now free to go ahead and obtain a customs license if you want to do Customs brokerage.
That is why each of these agencies will always ask you for Certificate or License before they can issue their own.
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