Harnessing economic growth through maritime sector

MARITIME transport is essential to the world’s economy as over 90% of the world’s trade is carried by sea and it is, by far, the most-effective way to move huge volumes of goods and raw materials around the world.

From a very broad perspective, maritime activities have a key role to play in the alleviation of poverty and creating wealth because they constitute an important source of income and employment for many people in maritime nations of the developing world, including Nigeria, in the form of supply of seagoing personnel, labour for ship recycling, ship owning and operating, ship building and repairs, as well as port services, among others. Therefore, if maritime transport or maritime related activities are threatened or become terribly in-secured, it can have serious impact on the nation’s economic growth.

The survival of the Maritime Industry in any country depends to a considerable extent on the level of aggregate demand for shipping services and the country’s shipping lines market share. The later depends on the operational efficiency of the lines and the former on how well the Country is performing. Using the trend in the total number of vessels and the cargo throughput of Nigerian Ports, there is an observable growth in the demand for shipping services in Nigeria. Besides, the nature of the Nigerian economy, which is import dependent, and oil economy which boosts her export cargo, indicates that the maritime industry will continue to be relevant to the nation’s economy, which would in turn require that modern infrastructures as well as adequate maritime security are provided.

In addition, the Maritime industry in Nigeria, to a large degree, plays important roles in civilization, development in the acquisition and construction of vessels, types of cargoes, enhancement of navigational waterway, application of exciting technology to the efficient extraction of oil and gas from the offshore fields as well as construction of efficient ports for cargo handling such as Lekki and Badagry deep sea ports that are under construction.

Nigeria requires a practical and holistic plan to address a number of issues challenging the Maritime Industry and to harness the potentials for the benefit of the nation. The Industry is vast but highly untapped despite years of persistence and several attempts to revitalize it.

It is an employment driven industry and can over run oil and gas contributions to domestic product of this Country. These opportunities are wasting and the challenges are enormous and multifaceted ranging from access to credit, financing, obsolete or in-effective Laws, Poor Infrastructure, Human Capacity, lack of political will to engineer fundamental reforms.

Maritime policy: There is absolute need to have a unified Maritime Policy for Nigeria that will capture the Maritime Sector and the port industry as a single entity. An Establishment of a “Maritime Advocacy Group” should be in place with the responsibilities of examining and reviewing the policy from time to time with the changing technology and provide for the strategies and frame work for the effective implementation of the policy. The group will be the one to tactically requesting the government to give the political will to strictly implementation to the numerous programmes and policies so that Nigeria and Nigerians can begin to derive the huge benefits inherit in it. The group will provide a document as a guide and position inform of a roadmap to create pathfinder that is capable to deliver and this will drive the maritime economy and the industry.

Legislative arm of Government: The legislative arm of government in the National assembly has “Marine Committee” in the upper house while the lower house has “Environment Committee.” Those committees members normally carry out their over sight functions to the Maritime Industry. Understanding the concepts and practices of the industry will assist them in their assignments while bills concerning the Industry are forwarded to them for consideration.

The committees members in both chambers need adequate and updated information of the industry through training, seminar, workshop and in addition, power point presentation of each agency under Federal Ministry of transport to showcase their duties, functions, achievements and problems in the sector. This adequate brief will go a longway for the legislatures to understand the industry and their yearnings.

Both committees in the National assembly that are assign to oversee the affairs of the Marine Environment need to Establish the procedure for the implementation of conventions of the International Maritime Organization and the International Maritime Labour Organization and other international conventions to which the Federal Republic of Nigeria is a party on Maritime Safety and Security, Maritime Labour Commercial Shipping and for the implementation of codes, resolutions and circulars arising there from thereby ratifying and domesticating those conventions in our national laws.

The Council Membership in the International Maritime Organization (IMO) London is of three categories of which Nigeria is yet to return to category (c) after her defeat in a previous council election.

IMO currently has 171 Member States and three Associate Members as well as 76 international non-governmental organizations in consultative status with IMO.

Category (a): 10 States with largest interest in providing international shipping services:

Category (b): 10 States with the largest interest in providing international seaborne trade:

Category (c): 20 States not elected under (a) or (b) above which have special interests in maritime transport or navigation, and whose election to the Council will ensure the representation of all major geographic areas of the world:

Nigeria as a maritime nation needs to secure a seat in Category (c ) and work towards moving to category (B) as soon as possible.
Marine Insurance Policy: An Establishment of a National Marine Insurance Bureau which should be properly backed by Law to take charge of and collect insurance levies on all cargos of crude or gas leaving the shores of the country daily may be considered as appropriate.

If this is in place, the system would help to check billions of dollars capital flight which Nigeria looses to foreign insurance companies who monopolize and specialize in marine insurance in the country. This action will also create new jobs and make up the nation’s Gross Domestic Production (GDP) significantly. It is a well-known fact that poor technical skills and knowledge gaps are major factors why foreign nationals dominate and monopolize the Marine insurance sector. This short fall can be addressed by training and re-training of Nigeria Insurance experts and professionals as well as through Seminars, Workshops, Conference and tailor made programmes in order to acquire needed skills and knowledge for this sector.

Maritime Infrastructures and Ships Financing: Shipping sector requires long term funding. Credit financing is shrinking and no bank is interested in long investment,  waiting for a long period of Return on investment (ROI). The Cabotage Vessel Financing Fund (CVFF) cannot fund all projects that are required in the Industry to achieve a better goal expected in a modern day Maritime Industry.

This is where the active role of financial institutions has become utterly necessary and this will require developing confidence in the sector to attract the lenders and investors. The financial system must be strengthened to encourage long term financing.
Maritime Investment is highly capital intensive and it requires long term funding hence government intervention is required to boost investors understanding of the market, the potentials, concessions incentives among others. Establishment of a “Maritime Development Bank” may properly be a better option to assist this industry  for various investment portfolio that exist there in which in turns will improve the nation’s economy and create more jobs.

Port Concesioning: Barely nine years ago and to be precise in 2006, the government decided to privatize and concession the ports to private investors in order to remove inefficiency, abject lack of facilities, revenue leakages and improve turn around of vessels at our nation’s ports for better Port Management. This Port reform exercise received global acclaim for its transparency, accountability and success. Under this arrangement, the government has a subsisting contract it signed with the terminal operators through Nigerian Ports Authority (NPA) and the Bureau of Public Enterprising (BPE) which serves as the confirming party. This contract states in crystal terms in Article 18.2 that “No change, amendment, or modification of this agreement shall be valid or binding upon parties hereto unless such change, amendment or modification shall be in writing and duly executed by the parties hereto”

The concept of Lekki deep sea project as well as the deep sea port in Badagry should be given all needed attention and work within the time line for completion since a similar port is being constructed in the neighboring Country in order to avoid cargo diversion which may result in loss of revenue.

As this port reform is knocking towards a decade, the government needs to re-examine and review the agreement between the two parties in order to ensure absolute compliance to the agreement. 
Complexity in Vessels Inspection at Ports: Many agencies are at the seaports looking for one information or the other to carry out their duties.

This action is not out of place rather it becomes cumbersome for the vessels calling at our ports to be given the same information to different agencies working for the same government rather such information can be obtained from an authentic source at the port instead of visiting the vessels asking for the same information or document.

Due to this situation, the management of the Lagos Port Complex of the Nigerian Ports Authority (NPA) one time issued a warning to security operatives of various government agencies who go onboard vessels for inspection operations to reduce the frequency of their callings. A captain of a vessel once lamented that he had 67 people coming onboard his vessel and all of them trying to do the same thing. This allegation needs to be examined and thoroughly investigated in order to provide appropriate solution to this act.

Maritime Safety: Nigeria covers a total of 923, 768 square kilometers with a land area of 910 square kilometer. She has coastline of 853 kilometers and inland waterways totaling 8,575 kilometers consisting largely of Rivers Niger and Benue as well as other smaller rivers and creeks.
Some of the key maritime claims of Nigeria include; continental shelf of 200 meters to the depth of exploitation, a territorial water of 20 nautical miles from the shoreline and an Exclusive Economic Zone (EEZ) of 200 nautical miles from her territorial water. This, alongside with Nigeria’s stretch of coastline indicates clearly, the vast maritime environment that subtends the Nigerian hinterland.
Nigerian Maritime Territory: 853 km of coastline 12 Nautical Miles Territorial Waters   24 Nautical Miles Contiguous zone 200 Nautical Miles EEZ

Maximum water depth of 2, 600m and 3, 000m
The Nigerian Maritime territory as mentioned above requires adequate protection for maritime business to flourish by ensuring that our waterways are free from any obstruction to vessels and where they are, signs need to be mouthed for cautions. Majority of marine casualties are caused by human errors once the vessel is seaworthy, certify by qualified and certificated Marine surveyors, the rest remain with the crew handling the vessel. This gives an indication that the crew must be properly trained, examined and certificated thereby earning the Certificate of Competency. (COC) to serve as a member of the crew onboard the vessels and all other similar structures such as Floating Production, Storage and offloading (FPSO) and Floating Storage and offloading vessel (FSO) among others.

It is a known fact that the Philippine’s Government earn a huge revenue from the services of their seafarers globally and Nigeria is capable of achieving the same considering our population, as a result, the issuance of Nigeria COC Certificate needs to attract credibility by the stakeholders who employ them on their vessels as well as been acceptable outside the country.