Shippers Council lists obstacles to Nigeria’s fleet development efforts …Laments payment of $9.1bn freight on wet, dry cargo
BY FRANCIS EZEM
The Nigerian Shippers Council, the nation’s Economic Regulator of the seaport industry has said that unless the economic issues associated with poor policy framework and inconsistency, paucity of funds, lack of technical human capacity and imbalance in trade terms and other sundry challenges were addressed, Nigeria’s dream of developing an indigenous fleet would continue to be elusive.
Available data show that as an import dependent country and 6th largest exporter of crude oil, more than 5,000 vessels call at Nigeria’s seaports annually, all of which are foreign-owned due to the absence of a vessel on the nation’s fleet. This development has given rise to huge capital flight and contributing to the growing youth unemployment rate with the attendant rise in crime rates.
Executive Secretary/ CEO of the council, Mr. Hassan Bello, who spoke at the 20th Anniversary Lecture, Award and Investiture of Patrons organized by the League of Maritime Editors and Publishers in Lagos last week in a lecture entitled: ‘’ Indigenous Fleet Development, What Options, expressed regrets that the inability of many of the promoters indigenous shipping companies to acquire the needed technical capacity to own and manage ocean going vessels has helped to worsen the situation.
According to him, in 2015 alone, Nigeria spent over $9.1billion on the payment of freight charges for dry and wet cargo to foreign ship owners due to the absence indigenously owned vessels that ply the international trade routes.
Bello, who is a member of the Nigeria Fleet Expansion Committee put in place by the current Minister of Transport, Mr. Rotimi Amaechi, also decried the imbalance trade policy where Nigeria’s crude oil and other non-oil exports are carried on Free On Board FOB, while her imports are carried on Cost, Insurance and Freight CIF, both of which exclude Nigerians from determining the vessels for the shipments.
Reacting to some of the Federal Government’s policies, he said: “Customs import duty/tariff on vessel, which currently stands at 14 per cent of the ship value has been described as prohibitive. This accounts for why vessel owners, including Nigerians prefer foreign registry, thus they bring in their vessels under Temporary Importation Permit TIP, which attracts only one per cent tariff of the total cost of acquiring the ship, which is renewable annually.
“Similarly, for Nigeria to reap the benefits of the huge maritime potential available to her as a littoral state, she has to urgently address the trade imbalance under which Nigeria’s exports are shipped on the basis of FOB, while her imports are lifted on CIF basis”.
He regretted that given these and many other policies, the oil rigs used on Nigeria’s waters as well as other vessels that service them are owned and controlled by foreigners. According to him, the situation is even made worse by the fact vessels used under the Coastal trade and Inland Shipping Cabotage regime, which are supposed to be exclusive preserve for Nigerians under the Cabotage Act 2003 are also mostly owned and managed by foreigners.
He however noted that all hopes are not lost, proposing a well-thought out indigenous fleet development programme by the government, which will not involve government ownership and funding of vessel acquisition rather creating the necessary atmosphere that would encourage local and private investors to invest in vessel acquisition with the assistance and cooperation of the Nigerian National Petroleum Corporation NNPC.