How Nigeria’s maritime sector under-achieved in 2017

With so many expectations in 2017, the Nigerian maritime sector huffed and puffed, but nothing changed, writes TOLA ADENUBI.
Nigeria boast of 853 kilometers of Atlantic coastline and her Exclusive Economic Zone (EEZ) covers a total area of approximately 315,950 square kilometers. With a vast network of navigable and potentially navigable rivers, lakes and creeks, traversing more than 3000 kilometres of inland waterways, the country still dance’s to the whims and caprices of the foreign shipping lines.

The Executive Secretary/CEO of the Nigerian Shippers Council (NSC), Mr Hassan Bello once enthused, while chatting with newsmen that, “What we have now is a sector dominated by foreign ships and they dictate to us. We have no choice than to listen to them, yet we own the cargoes. To correct this anomaly, we should have the ships. No matter how wide or long our coastline is, no matter how long our inland water is, and how our ports are, if we do not have the ships, then we cannot pretend to be a maritime nation.”

 

Arbitrary Shipping Charges

In early 2017, the foreign shipping lines introduced new charges called Ports Additional Destination (PAD) on Nigerian bound imports without consulting any government agency in the Nigerian maritime sector. Despite all the cries and shouts by stakeholders following that action, including warning from government agencies, the PAD is still being collected by the foreign shipping lines from hapless Nigerian importers, and everybody pretends as if all is well.

So when the Federal Government signed a national carrier agreement with Pacific International Lines (PPIL in late 2016, and set up a steering committee to look into indigenous involvement in the proposed national fleet in early 2017, hopes were high that the excesses of the foreign shipping lines will finally be curbed. But recent development has shown that the FG-PIL agreement is set to hit the rock.

Speaking to journalists at the 2017 Dinner/Workshop of Ship Owners Association of Nigeria (SOAN), Mr Greg Ogbeifun, a member of the steering committee said Nigeria’s tax law was a major impediment to the PIL agreement. In his words, “I was part of the delegation that went with the Minister of Transportation to Singapore in 2016 during the signing of the MoU.

“Along the line, after we had signed the MoU in Singapore with PIL, the company came up with issues as regards our local tax laws. PIL made reference to our local laws that will not make the agreement viable. And they put it in black and white that unless some of these laws are reviewed, it will be hard for them to fly the Nigerian flag. That was the biggest setback for that MoU.”

Nothing has been heard again from the steering committee since its formation. The year 2017 is coming to a close and Nigeria is still grappling with the lack of a national carrier that will fly the Nigerian flag, thereby compelling the country to dance to the tune of the foreign shipping lines.

 

CVFF Imbroglio

Another issue that dragged all through 2017 was the disbursement of the Cabotage Vessel Financing Fund (CVFF) to indigenous ship owners.

In 2003, the Federal Government established the CVFF under the Coastal and Inland Shipping Act, popularly referred to as the Cabotage Act. Since then, every indigenous ship owners contribute two per cent of every business they do into the CVFF, which is then warehoused by the Nigerian Maritime Administration and Safety Agency (NIMASA).

The purpose of the fund is to offer financial assistance, create access to funding for indigenous ship-owners, with the sole aim of increasing indigenous ship acquisition capacity. However, five years after, many indigenous ship-owners have gone bankrupt and the CVFF fund, which has accrued to almost $100 billion, remain undisbursed.

At the 2017 end of the year dinner organised by SOAN, the Minister of Transportation, Rotimi Amaechi told bewildered ship-owners that he won’t approve the disbursing of the fund if there is no structure on ground.

The bewildered ship-owner’s threatened to report the Minister to the Presidency if the CVFF remain undisbursed in the New Year, and the Minister has dared them to go ahead. With 2018 beckoning, more drama over the CVFF is sure to unfold.

 

Persistent Infrastructural Decay

Nigeria has six major seaports excluding oil terminals with cargo handling capacity of 35 million tonnes per annum. The berthing facilities at the ports include 93 solid cargo berths, 11 bulk liquid cargo berth, and 63 buoy berths, in addition to a host of privately owned jetties. But these facilities were built decades ago and have suffered massive infrastructural decay, particularly the ports access roads.

From Wharf road and Creek road leading to the Apapa port and the Apapa-Oshodi express road which leads to the Tin-Can Port, the two busiest ports in Nigeria have witnessed their fair share of containers falling off the back of trucks and killing unsuspecting port users due to the very bad state of the road.

Stakeholders were shocked the more when information leaked out in the middle of 2017 that the ports access roads were not included in the 2017 budget of the Federal Government. Although, towards the tail-end of 2017, remedial works commenced on the roads through public-private partnership initiative of the Nigerian Ports Authority (NPA), access into or exiting the two busiest ports in Nigeria remains a herculean task for port users; and many have had to divert their cargoes to Nigeria’s neighbouring ports due to the increased cost that has accrued on cargo clearance as a result of the infrastructural decay at Nigeria’s ports.

“In the words of an importer, Chidi Obiajulu, “Many containers are trapped inside the ports due to the very bad ports access roads. The longer those cargoes stay inside the ports, the higher the amount of demurrages slammed on cargo owners. It is now cost effective to divert your cargoes to neighbouring ports,”

 

Piracy Attacks

In her efforts to stem the rising tide of piracy in her waters, the Federal Government through NIMASA renewed its Memorandum of Understanding (MoU) with the Nigerian Navy in the first quarter of 2017.

Also, during the celebration of the 2017 World Maritime Day in September, the Minister of Transportation, Rotimi Amaechi announced that the Federal Government has entered into a three years agreement with an Israeli firm to combat the menace of piracy and sea robbery on Nigeria’s territorial waters. The agreement, which has $195 million financial obligation on the Nigerian government, will entail the training of Nigerian security personnel by the Israelis.

Again, to find a lasting solution to piracy, in early December, 2017, the G7 Friends of the Gulf of Guinea Group, an international initiative, held its meeting in Nigeria. That was the first time the meeting of the group will be held outside Europe.

However, despite this laudable efforts, Nigeria’s maritime domain has remained a high security risk and is most unsafe for seaborne trade and activities vis piracy, hostage taking, kidnapping and poor navigational aids. In November of 2017, insecurity off the nation’s waters prompted the United States of America to warn ships to be wary when approaching Nigerian waters.

The US Maritime Administration which quoted the latest quarterly report from the International Maritime Bureau (IMB), noted that a total of 20 reports of attacks against all vessel types were received from Nigeria, while 39 of the 49 ‘crew members kidnappings’ globally occurred off Nigerian waters in seven separate incidents.

It is only hoped that come 2018, this laudable efforts of government against piracy and sea robbery will translate to safety on Nigeria’s waterways for vessels.

 

Imo Election Disaster

In 2017 year end, Nigeria failed in her bid to get re-elected into the category ‘C’ of the International Maritime Organisation (IMO). In the election, which took place in London on the first day of December, 2017, Nigeria scored 98 points and lost out while five African countries of Morocco, Egypt, South Africa, Kenya and Liberia joined the group at the expense of the Giant of Africa.

Forty countries were elected into the IMO Council in three categories for the 2017/2018 biennial.

The successful countries are China, Greece, Italy, Japan, Norway, Panama, Republic of Korea, Russian Federation, United Kingdom and United States in Category A.

Australia, Brazil, Canada, France, Germany, India, Netherlands, Spain, Sweden and United Arab Emirates were elected in Category B; while Bahamas, Belgium, Chile, Cyprus, Denmark, Egypt, Indonesia, Jamaica, Kenya, Liberia, Malaysia, Malta, Mexico, Morocco, Peru, Philippines, Singapore, South Africa, Thailand and Turkey were elected in Category C.

Category A council members are countries with the largest interest in providing international shipping services, while Category B are countries with the largest interest in international seaborne trade:

Category C, which has 20 countries are those with special interests in maritime transport or navigation” and whose election to the Council will ensure the representation of all major geographic areas of the world,” according to IMO.