Nigeria Maritime Industry is Dying Due to Incompetent Managers - Captain Taiwo Akinpelumi

Captain Taiwo Akinpelumi is the Lagos Coordinator of the Nigeria Indigenous Shipowners Association (NISA) with vast experience in shipping business.

In this interview with FUNSO OLOJO and VICTORIA OLANREWAJU, Captain Akinpelumi, with brutal candour, dissects the Nigerian Maritime industry which he says is in crutches.

But he sees a light at the end of the tunnel only if things are done right.

Q. Can you please introduce yourself and your line of business?

A. I am captain Taiwo Akinpelumi, the MD/CEO of Oceanic Energy Limited, we are into shipping, encompassing vessel management, vessel operations, vessel brokering, we are vessel owners and vessel charterers.

Q. Can you access the state of maritime, given the fact that more than 70 – 80 % of ship owners have gone under, what is wrong with our maritime industry?

A. The problem with our maritime industry is like putting square pegs in round hole; the maritime industry needs seasoned technocrats that can actually take her to a greater height.

What is primarily wrong with our industry is the fact that overtime we have seen leadership of our regulatory institutions not considering local capacity development. It is said that charity must begin at home, a situation whereby you are expecting foreign operators to come and develop your industry, it will not work.

No concerted effort is being made to develop our local capacity and if your local capacity is not developing, it will affect human capacity development, technical know-how development as well as revenue inflow and when you do not have enough revenue nothing can be done.

That is why we see rare cases of rusty bottom. Nigerian ships are too old and all that. Apart from the fact that government is not looking at Nigeria ship owners’ side, there is no form of intervention fund for them to compete favourably with their foreign counterpart, the issue of cabotage vessel financing fund that was a form of contribution amongst them, they do not have access to it.

So, in situation like this, there is no reiterating that shipping cannot develop in that kind of atmosphere. That is the little I can say.

Q. You said the bane of our industry is like putting square peg in a round hole, as in NIMASA.

Are you saying the man at the helm of affair is not capable enough to drive the industry?

A. Without being immodest and very factual, we do not have to limit it to one person. When we talk about the management, we are looking at how many mariners are in top positions. At the agency, it is almost non-existent.

For instance, in the medical sector, you cannot bring a mechanical engineer to come and head an important agency because he would not know how to administer drugs and all that.

This is what government has to do for us in our sector. Our sector is dying and needs someone with the technical knowhow to revive it.

Don’t forget that our industry is specialized and highly technical in nature; we have to consider this and put it together.

The leadership might be doing its best but the best is not good enough for the industry and this is what is causing the gradual decay and folding up just like you said, over 75% of ship owners are no longer in business because there is no conducive environment and the leadership is not even considering developing capacity at all.

Q. What are those things that you think are left undone by the government agencies in order to revive the industry?

A. Thanks so much. The drafter of the cabotage act, they look at it because the industry needs a protectionist policy, it was done in the UK, Greece and other developed maritime nations.

The first thing is to look inward to see how to protect your home. Develop them, let them be like other developed nations then you can now relax your protectionist policy.

There must be an effective and full implementation of the cabotage act. Three Acts drive the industry, the NIMASA Act, the Merchant Shipping Act, the Cabotage Act.

If NIMASA works within the confines of its act, the major objective of setting up NIMASA is to develop shipping; both indigenous and international.

If NIMASA makes concerted efforts to develop shipping, as time progresses, it will graduate to international.

How many Nigerian ships are engaging in international trade, how many vessels are in our registry, so all these are major issues? The cabotage act has to be fully implemented.

We have overtime tried to set up an agenda for NIMASA. We felt where foreign vessels enter our waters and do all manners of trade and get away with the resultant capital flight. You can ensure that cargoes are exclusively preserved for the indigenous operators where they have the first right of refusal to cargos and that is the intent of the cabotage act.

Q. Why do you think the Cabotage Act has not really been implemented?

A. There is no political will to implement it though we know that the cabotage act is not perfect just like all other acts.

There is this waiver clause that is being abused, all manners of waivers are granted to foreign ships to trade freely and waivers as enshrined in the cabotage are supposed to be given sparingly.

It is only when Nigerians lack the expertise to provide services or resources that is when you look outward which is for only specialized vessels, but if you go to NIMASA they will say they have not granted waiver to any vessel but then, there are foreign vessels trading feely.

So how do they come in if you have not granted waiver to any foreign ship but you see them trading freely. How then did they come in? Nigeria had had series of occasions where.. It is like when you go for a job interview and you lack the expertise, and you are required to have up to 5yrs experience, just like our Cadets in nautical colleges, so if you do not give opportunities to local operators how will they develop and have the technical know-how to compete with their foreign counterpart?

So lack of political will to implement the cabotage act and lack of political will on the part of NIMASA to develop our local capacity. Lack of government interest to look at shipping and appreciate that shipping can actually bridge the gap of deficit in our budget. Until government realizes the importance of shipping before we can move forward.

Q. Don’t you think that there are some defects in the drafting of the act because the act rests on four pillars which include that ship must be owned by Nigerian, crewed in Nigeria, built in Nigeria?

But there are no facilities for that. How do we effectively implement cabotage?

A. I have said that goverment is not intervening in the sector thereby providing all necessary infrastructure for instance, it may interest you to know that a Nigerian owning a ship, registered and crewed by Nigerians, I am still expected to apply for waiver for build because according to NIMASA, my ship was not built in the country but NIMASA has forgotten that there is no ship building facility in the country and government is supposed to make concerted efforts to actually invest in infrastructure in the sector.

Government intervention to provide infrastructure is rubbing off and that is affecting the industry.

Government does not have business in shipping business. What has government done to empower people with technical morals that understand the business or ship construction and shipyard business?

The act was set in 2003. The fund realized since 2003 none has entered the hands of any Nigerian ship owner, this shows there is no political will.

Recently, we were discussing our system of training and certification of our sea fearers, what have they put in place to make sure that graduates of our nautical colleges are well trained to compete with their counterparts elsewhere? None. That is why you see NIMASA spending massively to send cadets abroad.

The money they are spending on these cadets abroad can as well be used to have world class maritime institutions here and get a proper curriculum, surveyors that will be examining them, what form of courses are available for them and what form of people have they considered to their examiners? These things are affecting our certification.

If you do not have people that are properly trained that can man standard ships. So that is how it affects the four pillars of cabotage act.

Q. What is the state of our ship registry because NIMASA recently set up a committee to look into ship registry with a view of rejuvenating it to be able to attract foreign vessels?

A. Our ship registry is in comatose, so there is no need reiterating that and the truth is NIMASA has not liberalized the certification of ships.

You know how difficult it is getting your permit and certificate from NIMASA and it is difficult to register your vessel, fly the flag of Nigeria and that will not encourage many people to bring in their vessels, we encounter bottle necks when we go to NIMASA to do business.

Secondly, we are saying a committee is set up to look at how to revive and improve the tonnage in our ship register your ship but it is business as usual.

The first ship I owned, I registered the vessel under PANAMA and all the registrations were done in Nigeria without the need to go to PANAMA. Someone said NIMASA is operating as a revenue generating agency but it should not be considered as one rather an agency put in place to streamline shipping, when shipping is developed deals that are supposed to come in will come in naturally, you do not say we have a target and then task ship owners heavily, that would discourage them and many ship owners will not like to fly your flag but if you put incentives on ground whereby someone who has one ship will be able to acquire more over time. The revenue you get from harbour dues and so on will be greater.

The committee set up, are they people that are seasoned in the business of ship registry? What incentives are they giving to operate? We should do away with the idea of always setting up a committee when there is a problem just to buy time and portray to the people that we are doing something that is why our NLNG, none of the ships fly Nigeria flags until we make thing conducive for people to take up our registry.

Q Government is making effort to float national carrier, what is your take on that?

A. What is a national carrier? It is defined in the act that if as an operator, if I meet all the requirements, I could be granted a national carrier status.

If I own ten ships and the ships are all flying Nigeria flags, by finance I am the owner, but the real owner of the ships is the government because in time of war, they can recall it, because if my vessel goes to Ghana and develops a fault nobody will contact me but they will contact NIMASA first and then NIMASA contacts me, so my ship is part of national fleet.

In the past NNSL, what happened to 27 ships to nothing? We should appreciate the fact that any public enterprise in this country does not have the traditional good management.

That is why I align with people that say government does not have business in business but if you empower the private sector by giving them the incentive to drive this.

Q. Government arrangement is 60% indigenous and 40% foreigners; government does not want to get involved, just to regulate.

A. Government is involved because they are the one regulating it. We should deviate from a situation whereby government will be the one telling us what to do. I appreciate the fact that government should only be there to provide enabling environment, incentives for us to operate.

It will translate to companies coming together to form mergers and conglomerates, we want to lift crude oil and VLCC is no chicken change. You need people to come together.

The guidelines for the disbursement of the CVFF, money that was contributed by ship owners but there is no ship owner in the committee for disbursement. These are part of our problems.

NIMASA has to build a habitat where these people will sit together and deliberate on how to use the money even for underwriting and for ships in this country; it would have translated to millions of dollars.

Can be used as start-up fund for maritime bank where members can access facilities at single digit, it will go a long way to revive the ailing industry. Where there is no money, there is no meaningful trade. To that extent, that is why I disagree with national fleet, it can only work if things are robust in your sector. It is decreed in the act that if there is requirement there will be national fleet and not by just saying. The government should give ship owners enabling environment to operate.

Q. With the state of the industry, does the country have hope?

A. The people at the helm of affairs and agencies will come and go, we operators will get old and replace ourselves with the young ones, the industry will still remain and I know that one day, someone with the love of this industry will come out. It is not difficult to revive the industry. Single policy statement can revive this industry because for instance, most of the shipping businesses are closing shops because access to cargo is not there. Almost all the ships that were acquired were through bank facility. And no matter your good intention to maintain the vessel, put it in competent hands and so on, if you do not have access to cargo, it’s nothing. You spend on a ship every day because it is not a car you can lock up and ask everybody to go home. So if there is no access to cargo, the standard will keep diminishing until you can move no more.

There was an initiative from Nigeria Ship Owners Association, we met with the Greek ship owners and they were ready to give us up to 52 ships at a time in batches. What we just needed from our government is say for instance, reserve PMS operations for indigenous ship owners that from Cotonou or Lome, the bill of lading will not be acceptable in Nigerian ports because it is not international trade, henceforth every refined products must be an exclusive right of Nigerian ship owners. They must have first right of refusal. The Greek people have ships and no jobs for them to do. We have already agreed that we take their ships, with bank to guarantee us and they will give us those ships which will be shared among members with a charter arrangement with the option of buying at a later date that is how to develop the industry. It is not rocket science. A ship owner goes to bank to borrow money and the money becomes rust bucket because there is no cargo.

Q. What happened with the Greek arrangement?

A. What happened was we tried to get statement from government that this one is reserved for us, and then take that statement to the bank and the bank guaranteeing the ship owner on payment.

We were almost making headway before the appointment of ministers three years ago. In fact, they threw everything away and now dividing us the more saying the association is divided. How many associations do you have in Nigeria that does not have internal trouble?

Do we have to reconcile before government will do that? We should not politicize things that are not necessary to be politicized.

Q. The year is running to an end. What do you expect of our regulators to do to put this industry on the right path in the coming year?

A. In a nutshell, Dakuku is a good man on a personal note but he needs to surround himself with people that will give him the right advice.

For the benefit of the industry, he should allow people with the technical know how to set agenda for the industry, to lobby all groups irrespective of their differences, or criticism and look at those criticisms as part of developing the industry.

Make concerted efforts to develop our indigenous capacity. If that is done, the problem is 50% solved. The issue of disbursement of cabotage fund, even if we have a million ships with no access to cargo is nothing.

There was a time NIMASA was trying to talk NNPC to utilize Nigerian ships, if NNPC is not responding, there is a way to beat them to submission as a regulatory agency. And they will have no choice than to patronize Nigerian cargos.

The issue of pollution make any ship owner to sign indemnity. There was fear that if foreign vessels are chased away there will be scarcity but these foreign owners have no other place to take their vessels to. We have resources and population and the market is there. If they are stopped today, you will see that they will queue behind Nigeria ship owners to give their vessels on charter.

So for the industry grow, the leadership must ensure that it looks towards the stakeholders to set agenda and irrespective of which faction any stakeholder belongs to, they should accommodate them all. That is the father figure role.

Also to work on our registry. The mode of doing business with NIMASA needs to be modernized and computerized such that we can do our approvals, permits on the internet without interfacing with humans.

I think with that, we will start heading to the right direction.