- As $9.1bn freight lost to foreign ships, Nigerians register 256 vessels abroad
Over the years, inconsistent and policy summersaults of the Federal Government have been the major hindrances to the growth of various sectors of the nation’s economy. So many businesses and investors have left the country for neigbouring countries.
However, most of these government policies have not enabled the nation’s maritime sector to fully achieve its potential, especially in the shipping subsector to maximize its real potential. For instance, Nigeria does not have an ocean-going vessels (national carrier) to grow various aspects of shipping subsector since the collapse of the Nigerian National Shipping Line (NNSL). Since then, Nigeria has become wholly dependent on foreign owned and foreign registered vessels to move its import and export trade with adverse economic implication for the country.
Presently, Nigeria is losing over $9.1 billion (about N3.5 trillion) to foreign shipping lines due to the inability of the country to transport its cargoes.
Ironically, despite the dearth of Nigerian flagged ships to grow various aspects of shipping in the nation, Nigerians have registered 265 vessels with 6,485,000dwt in other countries as stringent Federal Government policies and fiscal challenges continue to scare away investors.
These foreign registered ships by Nigerian beneficial owners have bigger capacity than the 726 Nigerian flagged ships with 4,526,000 deadweight (dwt) for vessels of 100 gross tonnage and above. A move to get those assets into Nigeria’s ship register would also represent approximately 37 per cent increase in the nation’s fleet by flag registration.
According to statistics from the United Nations Conference on Trade and Development (UNCTAD) Stats Data Centre, Nigeria’s share of national flagged fleet is 0.2 per cent of the world’s total fleet by flag registration for vessels.
Speaking at a maritime symposium recently to mark the 70th birthday of the Chairman, Starz Group, Mr. Greg Ogbeifun, the immediate past Secretary General, of the Abuja Memorandum of Understanding (MoU) on Port State Control for West and Central African Region, Mrs. Mfon Usoro, argued: “How much of Nigeria’s import and export is carried onboard vessels that carry the Nigerian flag? As we talk about the African Continental Free Trade Area (AfCFTA), another reality check is the size of Nigerian ships by flag registration.
“According to statistics by the Nigerian Maritime Administration and Safety Agency (NIMASA), we have about 722 of 100 tonnage and above. While we celebrate the fact that we are recognised by UNCTAD, if you look at the dwt of the foreign-registered vessels by Nigerians, you would realise that it is higher than the vessels currently flagged Nigeria. So, we have to address the issues that make Nigerians register their vessels in other nations.”
She said that there is a need for Nigeria to have a plan to grow the national fleet, adding that the nation should aspire to reserve a percentage of wet and bulk cargoes for indigenous ship owners.
“Nigeria should have a target to carry a certain percentage of Africa’s trade and world trade in 10 years’ time. Nigerian-flagged ships should constitute one percent to two percent or more of the global fleet and not a paltry 0.2 percent,” she said.
According to her, there is a need for the government to take a central position to prioritize maritime transportation in national economic development.
While commending the fiscal and tax incentives for several sectors in the Vision 2020 economic development strategy, she hinted that maritime transport wasn’t captured in the plan, hence, no fiscal incentive or tax exemption was provided.
“Some of the incentives provided in the Vision 2020 framework include; zero import duty on commercial aircraft, zero import duties on equipment and machinery for agriculture, power and mineral mining, exemption of profit on agriculture and manufacturing, exemption of dividend from tax on agriculture and LNG, among others,” she added.
She emphasised that ship-owners should enjoy zero import duties on ships to be registered in Nigeria, ship parts should also enjoy zero duties.
She also argued that a holistic strategy would be needed to boost fleet expansion as Ministries, Departments and Agencies’ (MDAs) cargoes should prioritise indigenous shipping companies, especially for cargoes that require Central Bank of Nigeria (CBN) approval for forex.
Also speaking at the event, the Executive Secretary of Nigerian Shippers’ Council (NSC), Mr. Hassan Bello, insisted that a viable national fleet should be private sector-driven. He noted that the Committee has been under pressure to speedily bring up something to serve as a national fleet but the team chose the path that would address the numerous policy issues.
Bello, who is also the chairman of the Nigerian Fleet Implementation Committee (NFIC), however, lamented that Nigerian ship-owners have been accused of lacking capacity whereas they just lacked opportunities to grow their businesses.
“Nigeria lost $9.1 billion freight to foreign ships in 2015 alone. This shows the need to have a fleet and the national fleet must come to fruition but it should come with modern flag registration, ship building and ship repair yards, ship finance, insurance, other fiscal incentives, etc. It should affect the whole economy. The process is painstaking and it can’t be rushed. It should be a five-year plan and Nigeria should also work towards becoming a producing nation,” he said.
Meanwhile, the Chairman, Sea Transport Limited, Mr. Aminu Umar, stressed that security challenges have also been a top limiting factor to shipping in the country.
“No ship owner sleeps well in Nigeria because of the security challenges. There’s also the finance challenge as most financial institutions in Nigeria don’t see the need to invest in shipping,” he added.
According to him, access to finance at single digit interest rates will remain a hindrance in the nation’s bid to grow indigenous shipping, adding that the provision of necessary incentives won’t yield the desired results without access to funds.
Also, the Chief Executive Officer of Morbod Group, Mrs. Margaret Orakwusi, harped on the need for the Federal Government to pay more attention to the maritime sector, adding that the potential of shipping won’t die as the oil sector has failed. She lamented that Nigerian shipowners are operating from a disadvantaged position without access to funding at single digit interest rates.
“In other countries ship-owners have access to funds at very low single digit interest rate for as low as two per cent, while Nigerian ship-owners get funds at 18 per cent that usually increases to 20 per cent, yet, we are all going to compete for the same cargoes in the global market,” she said.
