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Stakeholders seek comprehensive policy on maritime sector

A few days ago, the Nigerian Ports Authority (NPA) announced that it generated N1.02 trillion in three years. Stakeholders who spoke with OLUWAKEMI DAUDA said the agency could generate more if the government came up with a national policy on maritime.

FEW days ago, the Nigerian Ports Authority (NPA) announced that it generated N1.02 trillion in three years under the tenure of its current Managing Director, Ms. Hadiza Bala-Usman.

The authority made this know via a tweet it posted on its official Twitter handle.

The amount generated from the port by the NPA, the Nigerian Maritime Administration and Safety Agency (NIMASA), the Nigeria Customs Service (NCS), the Nigerian Shippers Council (NSC) and other agencies, stakeholders say, are enough to develop the sea ports to international standard.

Industry experts at the weekend,  proffered reasons why Nigerians were yet to reap the benefits of the Cabotage law as it relates to the oil and gas  and international freight.

Speaking with The Nation in separate interview, the experts noted that inadequate capacity at the port and absence of a comprehensive national policy on maritime sector were some of the factors militating against the development of seaports to international standard and full participation of Nigerians in coastal and international trade.

Determined to put an end to foreign domination of the shipping business, NIMASA Director-General Dr Bashir Jamoh, however,  said the agency had put necessary measures in place to address the situation and make Nigeria the hub of maritime trade.

The agency, it was learnt, is doing everythimg necessary to put an end to granting of waivers to foreign owned vessels.

Nigeria’s shipping business

With a coastline of 852 kilometres bordering the Atlantic Ocean in the Gulf of Guinea and a maritime area of over 46,000 km2, Nigeria is no doubt a maritime destination.

Statistics show that a total freight cost of between $5 billion and $6 billion is estimated to be generated on export and import businesses annually, while the maritime component of Nigeria’s oil and gas industry is worth an estimated $8 billion alongside seaborne transportation, oceanic extractive resource exploitation and export processing zones.

But the business has, for several years, been dominated by foreign-owned shipping firms. As a result, the Federal Government in 2003 came up with the Coastal and Inland Shipping (Cabotage) Act, aimed at growing shipping through effective participation of indigenous-owned vessels in the lucrative business.

The act restricted the use of foreign vessels in domestic coastal trade to grow indigenous tonnage. It also made provisions for securing jobs for qualified and upcoming Nigerian cadets being trained in various maritime institutions of the world.

Almost 17 years down the line, the act is yet to achieve its aim as many Nigerians still lacked the capacity to acquire quality vessels to participate in coastal trade and foreign vessels still depended heavily on foreign seafarers for manning.

To bridge the gap created by insufficient vessel supply for shipping-related business, the Act further created certain clauses to accommodate granting of waivers of different categories to foreign-owned vessels in the event that Nigerians failed to produce the needed vessels or qualified manpower to man Cabotage vessels, own ship yards to build Cabotage vessels and acquire the specific vessels required for a particular Cabotage trade.

However, granting of waivers caused huge capital flight as Nigeria continued to lose in excess of N2 trillion annually for not developing local shipping capacity.

It is estimated that maritime industry can generate close to N7 trillion annually because developing shipping comes with spin-off effects on other industries such as insurance and steel for the use of ship building and ship repair yards.

Unfortunately, over 80 percent of Nigerian seaborne cargoes are carried by foreign-flagged and registered vessels today.

Investigation has revealed that the huge revenue was going into private pockets of foreign shipping firms operating at the seaports.

A member of the Association of Chandlers and Ship Suppliers of Nigeria (ACSSN), Felix Anthony, said the Federal Government could raise over N1.5 trillion from over 10,000 vessels carrying out their business in the country.

He said the government should empower the Nigerian Content Development and Monitoring Board (NCDMB) in carrying out its core responsibilities.

He decried a situation where foreigners were supplying 90 per cent of essential commodities to Floating Production Storage Offshore Vessels (FPSOVs), oil rigs, platforms, supply boats, LNG vessels and bonga flow stations, saying that if the NCDMB was fully empowered by the government to enforce its Act, the reverse would be the case since only locals were permitted to supply provisions to vessels in other countries.

He said lack of regulation of the sector by the appropriate agencies was partly responsible for the criminal activities on territorial waters.

He said the country had been losing between $3.5 and $4 billion to foreigners for over 15 years, stressing that the illegal practice was causing capital flight. He noted that the money that was supposed to be in the country was being repatriated by foreigners.

NIMASA’s effort

Following these concerns, NIMASA recently rolled out plans targeted at putting an end to granting of waivers to foreign-owned, manned, built and flagged vessels.

The new strategies are aimed at addressing issues around growing capacity in ship building by encouraging establishment of shipyards; creating affordable credit facilities to enable Nigerians acquire vessels; creating tax incentives for importing built vessels by Nigerians and building of qualified seafarers.

NIMASA, it was gathered, is engaging with the Federal Ministry of Finance and the Nigeria Customs Service (NCS) to create a special tax incentive for Nigerians willing to purchase new vessels in the country.

Sources at the agency said the plan would involve creating special incentives that can enable shipbuilding yards to bring in components for building vessels.

The agency, a source said, is engaging with the office of the Vice President on the possibility of creating incentives for shipyards.

Ships cannot exist without cargo to lift. Therefore, NIMASA is also working towards ensuring that ship owners have cargo support.

NPA Revenue

The financial results showed that the NPA recorded consistent growth in revenue and remittances in the last three years compared to what was obtainable in the past.

A breakdown of the six years’ revenue and remittances showed that the NPA recorded revenue of N157.31 billion in 2013. Of the 2013 revenue, it made N137.9 billion through operating revenue and N15.08 billion, N1.24 billion from other revenue and investment income respectively. However, it remitted N13.17 billion.

In 2014, the agency recorded total revenue of N172.8 billion, N149.7 from operating revenue and N22.4 billion and N636.5 million from other revenue and investment income respectively. However, its remittance for the year, improved by a little over N4 billion to N18.56 billion.

In 2015, the agency’s revenue improved by N4.4 billion as it recorded revenue of N177.2 billion compared to N172.8 billion the previous year. However, its remittance for 2015 declined by N130 million as it remitted N18.43 billion as against N18.56 billion in 2014.

Stakeholders’ view

Industry stakeholders have commended the efforts of the NPA in increasing government revenues and NIMASA in addressing the shortcoming facing the nation’s shipping business especially as regards to creating jobs to Nigerian ship owners and seafarers.

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