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Nigeria @56: Tale of a sinking sector

By Sulaimon Salau   |   05 October 2016   |   4:21 am
Director General of NIMASA, Dr. Dakuku Peterside

Director General of NIMASA, Dr. Dakuku Peterside

Nigeria, with an 800-kilometre coastline is endowed with vast potential in the maritime sector. This natural advantage was a major revenue earner in the early years of independence, but it now requires proper attention after 56 years of national sovereignty.

To muster enough growth capacity in the nearest future, the need to develop this potential into national economic strength is germane and should be a priority engagement of government and the private sector.

Government’s appreciation over the years is responsible for the various policy and administrative initiatives to evolve relevant strategic framework to fast-track the development of the maritime sector into a value-creating hub of the national economy. But more needs to be done.

Although, the country has recorded some achievements in the sector, but they fall below expectations, given the huge potential. Corruption, greed and policy inconsistencies by government are believed to have become a cog in the wheel of shipping development in Nigeria.

Other maritime nations, which had the same background with Nigeria, have since risen to become giants in all facets of maritime development. Countries like Malaysia, Brazil and South Korea, have today grown to become shipbuilding nations, while Nigeria remains dominated by foreigners.

The controversy raging in the shipbuilding and logistics sector from fear of domination by a section of the industry is another bitter pill for the nation’s ailment.

Another area is the cabotage law, whose implementation has failed; it is not the making of the law, but enforcing it that counts.

With regard to Maritime Financing, the Cabotage Act in Part VIII (Ss. 42 – 45) created the Cabotage Vessel Financing Fund (CVFF), to promote the development of indigenous ship acquisition capacity by providing financial assistance to Nigerian operators in the domestic coastal shipping.

Barely 13 years after the floating of the CVFF scheme, operators in the shipping sector are yet to access the fund, which is estimated to have hit N50 billion. The fund is marked for disbursement through the Nigerian Maritime Administration and Safety Agency (NIMASA) for those intending to expand their fleet or start a new business in the shipping sector.

The Minister of Transportation, Rotimi Amaechi, during the inauguration of the NIMASA Governing Board, confirmed this by saying: “I am not sure that NIMASA in the past complied with the Cabotage Act. The last administration in NIMASA virtually spent all the money. The money in the cabotage fund is not for NIMASA to build universities but to improve shipping activities.”

A Renowned maritime lawyer, Olisa Agbakoba, had noted that, “the milestone achieved by having cabotage remains a pipe dream,” adding that, “the Cabotage Act failed because there was no political will to make it work.”

The Founding Chairman of Indigenous Shipowners Association of Nigeria now Nigerian Ship-owners Association (NISA), Chief Isaac Jolapamo, said the Federal Government must make maritime business the business of “my people, by my people and for my people”, in order to make the sector contribute immensely to the revival of the ailing economy.

Jolapamo said: “Without a past, there will not be a future remembering that Nigeria used to be a maritime nation at the beginning.

“Maritime and shipping trade revolves around ships from ports and harbours, shipbuilding and repairs, insurances, legal, technical and other ancillary services but cannot be developed on political platform.

“For example, if we recollect that our petroleum ministry has moved from collecting royalty from the exploration and production companies now known as IOCs into active participation in all areas of oil industry, it follows that we should not be contented with collection of port charges and levies on vessels, but be actively involved in the soul of maritime trade which is shipping.

“Unfortunately, there is lack of will power on the side of succeeding governments including the present, to turn the sector around,” he stated.

Jolapamo however, noted that the government needs to address certain factors to revive the industry such as the need for government to have a policy restructure, which will include relevant changes in existing trade policies.

He said: “Nigerians, particularly stakeholders must also support government for sustainable development and not only for personal gains for example, the safe anchorage area that will curb piracy and reduce shipping cost recommended by the Presidential Committee on Harnessing Maritime Potential is reported to have been hijacked by some influential Nigerians with their foreign collaborators and have become dollar spinning business at the expense of the nations.”

The country’s shipping industry, over the decades, had been dominated by foreign shipping agencies. Nigeria shortly before independence decided to establish her own shipping line, the Nigerian National Shipping Lines (NNSL), which was strengthened to fill the shipping gap that the nation had.

Following the oil boom some years after independence it appeared there was no clear policy that encouraged indigenous participation in the trade except with the acquisition of 32 ships for the NNSL. Before the NNSL liquidation, government had promulgated Decree 10 of April 1987, which became a national shipping policy to develop indigenous shipping. The Decree led to the establishment of the National Maritime Authority (NMA), which today is now known as Nigerian Maritime Administration and Safety Agency (NIMASA).

It is ironical that as Nigeria celebrates 56 years of independence, the nation cannot boast of a single shipping line today. The local content is growing arithmetically, the port concessionaires are lamenting, port facilities are decaying, infrastructure remains poor, and funding is frustrating.

A legal luminary, Dominic Obozuwa, identified impediments to maritime financing as: Policy failure; poor management and loss of focus; ineffective judicial system, and inactive organised private sector.

According to Obozuwa, the existing policies in the maritime sector are inadequate to meet the aspirations of potential investors in the industry. Hence, there is need for a comprehensive maritime policy for Nigeria and the present monetary fiscal and financial policy of the Federal Government requires urgent review.

He said the envisaged maritime policy should go beyond shipbuilding and acquisition, adding that technical services and operational issues are crucial elements in any discussion about maritime policy.

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