Fifteen years after the enactment of Cabotage Act, foreign shipping lines are still setting the tone for local ship owners as the Nigerian Maritime Administration and Safety Agency (NIMASA) failed to address challenges in the sector. BAYO AKOMOLAFE reports
Carriage of liquid cargoes by local ship owners has become a nightmare because of the flagrant abuse of waiver clause in the Coastal and Inland Shipping Act 2003 enjoyed by foreign shipping lines.
The act was established to promote indigenous shipping but in contradiction, foreign liners are the ones benefitting from the country’s coastal trade.
It was gathered that the allocation and carriage of liquid cargoes and other shipping services that fall under the coastal shipping regime have been dominated by foreign ship owners as the apex maritime regulator, NIMASA, failed to protect the local shipping lines.
Also, a vetting regime has been introduced in the selection of vessels that are used in coastal distribution of wet cargoes, such as petroleum products. It was learnt that foreign vessels, which bring the cargo to the country, were the ones dictating which vessel carries the cargo for distribution under the vetting regime.
This strategy has thrown many indigenous shipping companies out of business, as many of them are not selected in the process.
A former Director General of the agency, Patrick Akpobolokemi, had said that average cargo traffic of 152 million metric tons worth over $5 billion in freight earnings was being generated in the country annually.
He noted that over 90 per cent of this income was earned by foreign shipping companies.
Also, at a recent stakeholders’ forum in Abuja, the Director General of the agency, Dr, Dakuku Peterside, said that Nigeria was one of the major exporters of oil and gas resource in the world.
He explained that the country had an average output of 1.92 million barrels of crude oil per day, which generates huge freight for carriers.
However, the director general admitted that indigenous shipping operators had insignificant share of the freight earned from the carriage of Nigeria’s crude compared to foreigners.
Dakuku also said that members of Organisation of the Petroleum Exporting Countries (OPEC) such as Iran, Indonesia, Algeria, Kuwait, Angola, Venezuela, UAE and Libya allowed indigenous operators to participate actively in shipment of crude oil, stating that with the right policies in place, Nigeria could build its own capacity and one of this is the change of terms of trade for Nigeria’s benefit.
Echoing him at the forum, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, said that the corporation did not have any reason not to allow Nigerians lift crude.
It was learnt that foreign vessels banned in Europe, which are not supposed to operate on the nation’s waters are in fact leading and dictating in the distribution of imported petroleum products in the country’s waters.
Local shipowners said that the practice goes through various manipulations of the system with the situation worsened by the failure of NIMASA to check the perpetrators.
The President of Nigerian Shipowners Association (NISA), Capt. Niyi Labinjo, said that because of the failure of the regulatory body, Nigeria was losing N2 trillion annually to foreign liners.
He explained that 60 vessels belonging to Nigerians out of 600 vessels were jobless.
Labinjo said that some of the companies were seriously struggling, adding they had been working with less than 20 per cent of their workforce.
President of Shipowners Association of Nigeria (SOAN), Greg Ogbeifun, expressed displeasure over the challenges facing indigenous ship owners and the turn of event in the industry in the last two years.
He noted that indigenous tonnage had gone down, while seafarers were going out of job.
According to him, most ship owners were unable to meet their obligations to the financing banks, leading to loss of jobs and failed businesses.
The president said that what was needed to grow the Nigerian shipping industry and the economy was government support for Cost Insurance and Freight (CIF), which will enable them lift Nigerian crude and ultimately boost indigenous capacity.
There is need by government to change its terms of trade in order to promote indigenous coastal shipping and local content policy.
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