‘Deepening Indigenous Participation In Maritime Industry Would Increase Nation’s Revenue Base’
In spite of its potentials, the maritime sector of the economy continues to be bogged down by a litany of challenges. Why has it been difficult for Nigeria to make the industry another major income earner like the oil sector?
The major problem with the maritime sector is that of recognition and the nonchalant attitude of successive governments towards its development. Sadly so, the new administration has not also listed the sector as key on its manifesto whereas it is one key sector that drives our economy.
Nigeria is still import-dependent and that means almost everything we use is imported and they can only get to the country by sea because the aviation sector cannot bring in 10 per cent of what the maritime sector carries. On the other hand, oil, which is the mainstay of our economy, is exported and imported by sea. Almost 70 per cent of the equipment used in the oil and gas sector is maritime-based. In effect, no government can afford to overlook the maritime sector.
This is the 5th edition of NIMAREX. And what we are trying to do is to create awareness about the industry and stakeholders, discuss issues that affect us and suggest solutions.
The intractable challenges at the ports seem to be defying solutions…
We have problems at the port but it is not our problem, it is the country’s problem. The government needs to realise that we don’t have adequate facilities to cater for the needs of the people. We only have Tin Can and Apapa ports and maybe Brass. When you look at Lagos alone where you have over 20 million people living and doing business and you have just Apapa and Tin Can ports to cater for their needs, then there is a problem.
To resolve this, there is a need to expand the existing ones and also establish more ports in Nigeria. Government should also encourage people to use the Eastern ports like the one in Calabar, Port Harcourt and Warri. That will create more road networks because what is affecting the Lagos-Ibadan Expressway and Lagos roads are the trucks and other heavy-duty vehicles plying them but which are not built for them.
We need to get adequate facilities at the other ports so people can start using them; they should not just be there. If you ship to Warri or Calabar and you can get your containers on time, it would help to decongest Lagos. We therefore need to give more waivers to those using Warri, Calabar or Port Harcourt. They need to know the cost of shipping their goods from Warri to Kaduna or Ibadan is fair. That will make them prefer going through such ports. It is not just about upgrading and expanding alone, but creating more ports. This is the task for the new government.
What specifically do you think the government can do to decongest the Apapa port?
Aside encouraging usage of other ports, government can enter a partnership with private investors to establish container terminals, maybe around Badagry or somewhere else. That will reduce the demurrage on vessels and more jobs will even be created. People will be able to invest in lighter badges and take their containers from there to Lagos to Calabar or any other seaport.
What steps should be taken by the new government to generate more revenue from the maritime sector?
Enforce laws and policies, and encourage more indigenous participation. I know the maritime sector is the heartbeat of the Nigerian economy whether we like it or not and when you neglect it, there will be consequences. For a country that is 90 per cent import-dependent, what more can be said. The government cannot just afford to overlook this sector again? All I hear talking about agriculture and mining. But if they produce from these sectors, it is through the maritime sector that they will export the produce/products.
People are crying they don’t have jobs. Do you know that the oil that is being imported into the country is not even discharged in the Nigerian waters? They are discharged at Lome and Cotonou. Automatically, people who are doing Ship-to-Ship transfer in Nigeria can’t have jobs; you are creating jobs in Lome and Togo and other countries and the country keeps losing revenue. If this government is serious, they must make every mother vessel bringing products into Nigeria discharge the products in Nigerian waters. There will be a quick turnaround and thousands of jobs will be created.
Recently, everyone was happy that Nigeria has been given lifting right, but the lifting right is not for us to lead the crew but to market the products in the international market. I have never seen a country that has beautiful laws then leave loopholes for people to exploit. We are the one producing but no Nigerian company can lift. There are so many things we are not doing right. We have Local Content Laws and others, but we are not enforcing them. There are thousands of jobs that can be created in the maritime sector if these laws are fully enforced.
Do you have any idea of the number of jobs that can be created if all these laws are enforced?
Five million jobs could be created directly and more millions indirectly. If the new government tries to do something about this, we will be amazed with the turnaround that will take place in the sector because it is because of corruption that the sector has been suffering all this while.
Can the sector be private-sector driven to curb the corruption?
That is happening but all the same, the sector cannot be totally private sector-driven. The Customs have to be there, Immigration, Port Police and so many others. We cannot in totality hand over our ports to the private sector.
How has the Local Content Law impacted your operations in the past?
Yes, being one of the first companies to be given the opportunity to operate in the Deep Waters. I am however not happy because we have four vessels that are not functioning again, but we have foreign vessels which come in and are given contracts. I only take delight in the fact that new companies are coming up and I pray they don’t fall into the same trap that my company fell into. But right now, we are seeing improvement.
Why are indigenous companies not given contracts?
First, banks are not sometimes there to support companies in the bidding process, which could take forever. It could take one to two years. Will the shipyard give me a quotation and stand by that quotation for two years? Will the vessel owner give me the vessel for two years? The unfortunate thing is when this process is ongoing, you allow the IOC do sport hire. And what do they do? They keep that vessel in the field while you are bidding, that means a man who has a vessel from Norway will be operating and making money on the field. By the time the bid process is complete and documentation takes place, it’s already three years.
So who is frustrating the policy?
It is both the IOC and the government. If this bid process could be shortened, it will be better. The process is cumbersome. We keep deceiving ourselves and want change to occur. They know the right thing to do; they should just do it.
What is the enabling framework and environment the incoming government needs to create to get the best of the industry?
They should enforce the local content law and other policies. If they do that, I can guarantee you that in the next few years, we will be thankful. There was a committee set up by the Federal Government some couple of years ago and in their report, it was stated that 80 per cent of global trade and 90 per cent of trade generated by Nigeria comes by sea without indigenous participation in it. They put the capital flight of that to be about N1.5tn.
In addition, this trade accounts for 76 per cent of West Africa sub-regional shipping trade, which takes place in Nigeria excluding manpower cost estimated at about N600m annually by SPDMB. In their latest report, they said that offshore trading in Nigeria is worth about $3.5bn annually. I can guarantee you that Nigeria is not doing $1bn out of that $3.5bn. You can imagine if that money goes into the banking industry in Nigeria, imagine how much is lost. When you look at things like this, I have problems. In that report, it was also stated that as a result lack of indigenous participation, about five million Nigerian youths are left unemployed and the insurance industry in Nigeria is losing about $101bn to foreign insurance brokers. This report was given to the government and they threw it away.
How many operators is NIMAREX expecting to participate in offshore trading if government gets serious about this?
I cannot really say but the idea is to let people understand what is going on. In the past, we have said that IOC has not been supporting this industry. They see this platform as an avenue to attack them. They don’t see it as a way of what can be done to address the situation and find a way of resolving issues. NIMAREX is not an avenue to attack negatively, but to brainstorm and work out things together. It is not about ship owners alone, but NIMASA, Navy, Customs, Immigration, Customs License Agents and the rest. It is an industry thing. That’s the way to improve the maritime sector. We believe our discussion could also help the incoming government chart a good course. We need to tap into the resources we have in this country and re-direct our energy. This shift in paradigm is good for the country and we believe the maritime industry should be given attention by the new government.
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