Sunday, 24th September 2023

Fresh concerns over $17 billion yearly freight loss to foreign shipping lines

By Adaku Onyenucheya
28 October 2020   |   4:28 am
Stakeholders in the maritime industry have expressed displeasure over the yearly $17 billion revenue loss to foreign ship owners due to the inability of the country to lift her cargoes.


Stakeholders in the maritime industry have expressed displeasure over the yearly $17 billion revenue loss to foreign ship owners due to the inability of the country to lift her cargoes.

According to shipping experts and economists, Nigeria cannot own and manage vessels, which is a critical and essential trade facilitation tool. This is particularly worrisome as trade is the country’s second-largest contributor to its gross domestic products (GDP).

The stakeholders frowned at the uncoordinated efforts made by the current and past governments to revive the Nigerian National Shipping Line (NNSL) or establish a new national carrier. The absence of this, according to them, has cost the country huge losses.

They urged the government to borrow a leaf from countries like China, Hong Kong, Singapore, Japan and Greece, where shipping is a major revenue earner. The Bank of Greece (BoG) disclosed that revenues from shipping in 2015-2018 exceeded an average of over $13.5 billion yearly, which is about 6.8 percent of the country’s GDP.

According to the Governor of BoG, Yannis Stournaras, shipping receipts cover a large part of Greek external financing needs and a dominant component of its economy.

The immediate past President, the Merchant Navy Senior Staff Association, Matthew Alalade, frowned at the over-dependence of Nigeria on foreign vessels for the affreightment of the nation’s import, cargoes and training of cadets.

He recalled that when the National Shipping Policy was enacted in 1984, a minimum of 40 percent was targeted as the volume of goods to be lifted by Nigerian-owned vessels, noting that mismanagement and corruption killed the National Shipping Line.

He said due to the lack of a national carrier, Nigeria is losing trillions of naira to foreign ships and experts who lift its cargoes and train cadets.

He said: “All the marine officers we have now are aging; our captains are aging as well. So, we need our vessels to train our local talent and utilise them well. We can train people up to the upper level of captain and chief engineer level.”

He added that having a national carrier is essential, especially during distress when countries need to evacuate their citizens from places in distress. He said that during the coronavirus pandemic, Nigeria was unable to evacuate its citizens from countries that were worst hit by the pandemic due to the absence of a national carrier.

The immediate past President of the Ship Owners’ Association of Nigeria (SOAN), Greg Ogbeifun, told journalists that the maritime industry could contribute more GDP if the industry was given its fair support to be more productive.

Ogbeifun, who is also the Chairman and Chief Executive Officer of Starzs Investments Group, said from independence till 1995, the country had managed, developed and grown a very vibrant national fleet under the defunct NNLS, increasing its fleet to 29 ships who were handling imports and exports.

He regretted that 25 years later, the National Shipping Line had liquidated while the country has lost all the accruable economic benefits like job creation, skills and human capacity development and training opportunities.

The shipowner said the nation has not been able to articulate a replacement modality, whether privately or publicly-owned or Public-Private Partnership (PPP) arrangement. He said there has been no platform of training for Nigerian cadets with carriage of the nation’s imports and exports now transferred to foreign ship owners.

Ogbeifun said a committee set up by the Ministry of Transportation to explore the re-establishment of a national fleet that would trade globally, though laudable, had yet to yield the desired result.

He also expressed concern on the import duty estimated at 14 per cent and tax laws, which puts Nigerian shipowners at a disadvantage, while calling on the government to review the fiscal framework to give all operators a level playing field.

Meanwhile, the Executive Secretary, Nigeria Shippers Council (NSC), Hassan Bello, who spoke to The Guardian on the feasibility of the proposed national carrier, said Nigeria spends so much as 17 billion dollars yearly on freight.

Bello who is also the Chairman of the National Fleet Implementation Committee set up by the Ministry of Transportation, said while the national fleet is private sector-led, “we need to remove all the stumbling blocks. We need to, for example, incentivize the private sector with friendly conditions.

“My committee has been pushing to get pioneering status for national fleet, that is, for Nigerians to own and operate ships and if we get some initial, but for the Covid-19, we will now push more incentives, that is, tax incentives and exemption from customs duty for the ship we are going to bring.

“If we are to have Nigeria on the list and if we have a fleet according to NIMASA Act, the fleet will be given the status of a national carrier, which means they will have priority in project cargos, Nigerian cargo, cargo belonging to federal, state and local governments .”