Nigeria Economy to Attract N2trn as NIMASA Stops Cabotage Waiver

Abiola Seun

The Nigeria Economy is set to gain a whooping N2 trillion through the maritime sector with the plans of the Nigerian Maritime Administration and Safety Agency (NIMASA) to strictly enforce the Cabotage act.

Also, the enforcement of the Cabotage Act would provide several thousands of jobs for Nigerians seafarers in the sector.

The Cabotage act enacted 16 years ago reserved domestic coastal trade within Nigerian coastal and inland waters to vessels built and registered in Nigeria, wholly owned and manned by Nigerian citizens.

Foreign-owned vessels and companies are, however, allowed to participate in Cabotage trade within Nigerian waters, subject to obtaining a waiver and or licence from the Federal Ministry of Transport.

However, investigation had revealed that foreign firms own about 90 per cent of the vessels in the country today, while the local operators are groaning under poor utilization and insufficient capacity.

But, NIMASA had last week presented to the public, a five-year plan to bring to an end, waivers given to foreign vessels trading on the nation’s waters thereby allowing Nigeria takeover its Cabotage trade.

The Director-General of the Nigeria Maritime Administration and Safety Agency (NIMASA), Dr Dakuku Peterside, made this known at a two-day Stakeholders’ Consultative Meeting in Lagos.

NIMASA director-general had said that cessation of cabotage waivers would begin with a two-year plan to end waivers to fishing trawlers, tugs, offshore supply vessels, barges, house boats, tankers of below 10,000 GRT and vessels such as FPSOs.

But, investigation over the weekend had shown that the country loses over N2 trillion annually to non-enforcement of the Cabotage.

For instance, Nigerian indigenous shipowners are doing less than 50 percent of the crude oil afreightment in the country.

And, it is estimated that indigenous shipowners could do crude oil carriage, the country could generate over N1.5 trillion into the country’s economy.

Speaking recently, the governor of Central Bank Of Nigeria, Godwin Emefiele said full implementation of cabotage act will raise N2 trillion annually.

The CBN governor said, “Another option to generate additional finance for the government would be to fully implement the 2003 Cabotage Act. The Act stipulates that all cargoes and passengers in the inland and coastal waters be transported by ships and ferries built, owned, crewed and manned by Nigerians.

“Contrary to the requirement of this Act, there are several foreign-owned vessels providing shipping services locally. Out of about 600 ships that operate within our waters, only about 60 are owned by Nigerians and they are mostly idle, in violation of the Act. Industry sources suggest Nigeria may be losing as much as N2 trillion annually from this anomaly. In addition to raising revenue, a full implementation of the Act could also spur job creation, capacity building, and significant backward integration,” he said.

Also, the pioneer president, Nigerian Shipowners’ Association (NISA), Chief Isaac Jolapamo said the strict enforcement of the Cabotage act in the carriage of crude could generate N1.5 trillion.

He said, “I can say conveniently that even in the crude oil carriage that they do today, if Nigerians are doing 50 per cent carriage of their own allocation, we will be putting back more than about N1.3 or 1.5 trillion into the economy and what is our budget? Is it four trillion naira or something and if we are putting N1.5 trillion or thereabouts into the economy and the multiplier effect of it is the job it would have created.”

The Nigerian Chamber of Shipping has however, called for concerted efforts towards resuscitating the Ajaokuta steel Company because the country could build ship with a functional steel company, which would in turn encourage springing up of cottage industries.

Speaking, the Director General of Chamber of Shipping, Obiageli Obi, said, “There is nothing wrong in the administration of the Cabotage Act, as that will help to create the much needed jobs for Nigerians.

“But we need to tread with caution while trying to implement that, knowing that we are dealing with an international trade variant of our economy.

“Many of the infrastructure that we need to anchor this on, are not yet available; the manpower to manage the platform and provide services onboard are still not there,’’ she said.

Another stakeholder, Mrs Margaret Orakwusi, appealed to the Federal Government to ensure that the banks would grant loans to Nigerian shippers at a single-digit rate to boost ship ownership and development.

“I thank God that people in government are thinking in this direction that we, the operators, have been longing for. If we get it right now, the economy will be shielded from negative international economic reflex.

“Cabotage is good; it will resonate the sector and foster expansion in all ramifications while engaging the cadets in the system.

“The whole idea is to have a succession plan that will midwife a full blown cabotage regime that will be of benefit to Nigerians instead of the foreigners trading on our waters.

“It has been observed that the Cabotage Act, since inception in 2003, has, to a large extent, favoured foreign ship owners while killing indigenous ones,’’ she said.