Why Nigeria Maritime is underdeveloped

Nigeria Maritime Industry is as old as the country itself but like many other sectors, the nation’s maritime sector is not exempted from myriad of problems facing the economy.

The maritime sector like other sectors of the economy has been bedeviled with series of challenges that are yet to be solved ,making the Nigeria Maritime industry underdeveloped.

For instance, the maritime industry has been confronted with challenges of funding for indigenous ship acquisition, foreign ship owners taking over indigenous trade, unabated pirate activities, sea robberies among others.

Dominance Of Nigeria Coastal Water By Foreign Ships

One of the many challenges facing the nation’s maritime sector that has refused to abate is the dominance of Nigeria coastal water by foreigners.

This challenge has nullified several various reforms initiated by successive administrations in the sector.

However, Indigenous Ship owners have decried the dominance of their foreign counterpart stating that while their foreign counterparts are in business, their members are going through difficult times of keeping their investments afloat.

Speaking recently, the founding Chairman, Nigeria Ship owners Association (NISA), Chief Issac Jolapamo said “indigenous vessels are idle and huge costs are being incurred as the engines keep running”..

Besides, he said that, foreign ships were entering the nation’s waters at will despite the Cabotage law, while the relevant agencies watched helplessly.

Jolapamo blamed the development on the inability of the implementing agency to enforce the provisions of the law.

According to the ship owner, years after the Cabotage law came into effect, the law has not achieved its intended objectives.

“Because of this, we (Nigerians) have not done well and there is nothing to roll out the drums for”.

Inconsistent Government Policies

Another major setback for the nation’s maritime sector, has always been inconsistent policies by the federal government.

According to top players in the sector, the inconsistency of the federal government in policy formulation has caused investors several billions of Naira over the years.

Chairman, Seaports Terminal Operators Association of Nigeria (STOAN), Princess Vicky Hastrup believed inconsistent government policies have held the maritime industry down over the years.

‘‘Government need to ensure that consistency in policy is applied to the economy because there are lots of inconsistencies in policies that they keep changing from time-to-time and these do not augur well for business owners. The maritime industry has a huge potential if right policies are made”.

“The port industry doesn’t need inconsistent policies. We don’t need policy somersault because that makes it very difficult for business owners to plan. That is quite scary and that is why investors are moving out of the country. Investors do not have confidence in injecting finances into business in Nigeria and the reason was due to inconsistent government policies,” she said.

“For instance, Customs tariff keeps changing from time-to-time and before it changes, an importer of goods would have shipped his cargo from wherever it is and before the cargo lands, Customs has increased the tariff on such cargo then, that business owner is already messed up and got into trouble financially. So, these are all the fortunes we need to sync.”

“The port industry has a huge potential but like I said, only if the right policies are applied. We know the port industry is second to oil. It is such a huge industry because it comprised of big operators such as – Terminal operators, Truck Operators, Shipping Companies, Clearing Agents – that is a huge industry, it is an industry that can provide jobs for youths, provide jobs for families, it is an industry that has potentials to generate huge revenue for the government but only if we have consistency in policies,” she stated.

Non-disbursement of CVFF

Another major setback for growth of the nation’s maritime industry includes non disbursement of Cabotage Vessel Financing Fund (CVFF) to help Indigenous ship owners.

The CVFF ,which was established from the two per cent contribution from the cabotage contract by indigenous ship owners, is warehoused with NIMASA.

Right from the tenure of Shamsudeen Dosumu through Temisan Omatseye, Patrick Akpobolokemi to the incumbent NIMASA DG, Dakuku Peterside, the actual amount of the funds has remained a subject of conjecture as the actual amount has been mired in controversy.

The fund was created to provide financial assistance to indigenous operators in ship acquisition. However, 13 years down the line, the Cabotage law could not be effectively implemented, as participation of Nigerian shipping companies in marine transportation is yet to improve.

In view of this, stakeholders, especially indigenous ship owners, who are said to be tired of the endless wait has called for the disbursement of the fund . President of the Ship owners Association of Nigeria (SOAN), Engr. Greg Ogbeifun recently expressed the frustrations of his members over the endless delay when he disclosed, that, the association has written on why it could no longer hold on to the Cabotage Vessel Financing Fund (CVFF), saying the time has come for the disbursement.

“We will engage the authority. For instance, Starz group contributed $1.25 million, C&I Leasing contributed $1.8 million, Slok contributed over $1 million while Seabulk contributed $1.3 million”.

“We have all contributed to the fund and if we have genuine transaction, we have the right to meet the government to disburse the fund,” he said.

“Members of SOAN who have genuine transactions have applied for CVFF and we are waiting to see how they will react to that. We will also collectively engage them”, he declared.

Captain Emmanuel Iheanacho, a ship owner and former Minister of interior in his comment, described as strange the unending waiting game over the disbursement.

“NIMASA should address the issue. It is a strange thing that the CVFF that was conceived so many years ago with so much money contributed by people who offer and users of shipping services. We are still at the stage where people are talking about disbursing it.

What is the purpose of CVFF? Then you have to finance those who are stakeholders and people who contributed this fund. There must be criteria for determining those who qualify and for those who meet that criteria. Then there is no reason why that money should not be disbursed. The money should not be diverted into other uses or other courses. The money is specific for the promotion of indigenous capacity in shipping and ought to be applied to that end,” he said.

Oil Producing Country Without A Ship

Since the collapse of the Nigerian National Shipping Line (NNSL), in 1995, Nigeria has been the only oil producing nation without a national fleet.

This has however affected it’s freight earning from oil as statistics indicated that Nigeria exports about 900 million barrels of crude oil annually, but foreign vessels earn the freight of about $2.25 billion, yearly, carrying the country’s crude with no freight earning benefits to Nigeria.

This must be addressed if there is going to be a change of fortunes in the maritime domain and Nigeria’s economy, in general.

The former President of the Nigerian Association of Master Mariners (NAMM), Capt. Adewale Ishola, said that, the nation’s indigenous ship owners should be able to transport more of Nigeria’s crude oil than the foreign ship owners.

Conclusion

There should be deliberate effort by the government to tackle problems militating against the industry’s efficiency. Nigeria’s strategic location in Africa puts her at advantage in becoming the hub of shipping activities. The country has a large coastal territory, with extensive coastline and vast exclusive economic zone. It has inland waterways and large volume of numerous commodities, oil and gas exports. Therefore, if the vision of increasing local content participation in the Nigerian maritime industry is pursued vigorously, the sector will fall in tandem with Goldman Sachs’ 2003 report, in which it was predicted that Nigeria was one of the identified countries with the potential to be like Brazil, Russia, India and China.