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National fleet: Ship owners fret over slow pace

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National fleet: Ship owners fret over slow pace

Following the demise of the Nigerian National Shipping Line (NNSL) in 1995, a new national fleet being conceived to boost shipping in the country is still crawling as the Federal Government failed to amend the Maritime Act. BAYO AKOMOLAFE reports

 

Shipowners are at crossroads over the establishment of a national fleet to boost domestic and international shipping in the country largely dominated by foreign liners.

The plan to float a national fleet was mooted in 2016, when the Federal Ministry of Transportation set up a National Fleet Implementation Committee, headed by the Executive Secretary of the Nigerian Shippers’ Council (NSC), Hassan Bello.

Past records

 

This idea came to fruition 23 years after the demise of the Nigerian National Shipping Line (NNSL).

The shipping line was established by the Federal Government in 1959. Despite heavy investment and subsidies, the company with its 24 vessels was unable to compete with European and Asian lines.

However, Malaysia, which started its shipping line almost the same time with Nigeria, survived with 245 ships of various sizes and types. As at 1995, all the 24 fleet under the defunct NNSL had disappeared.

Presently, the country has no national fleet to boost local and international trade despite the fact that 92 per cent of all import/export cargo in and out of the country is via seaborne trade.

Excuses

Director General of the Nigerian Maritime Administration and Safety Agency (NIMASA), Dr. Dakuku Peterside, said the inability of local investors to raise funds for equity participation stalled the establishment of a national fleet and licensing of private national carriers.

 

He said that the recession had also made it difficult for Nigerian ship owners to raise funds to take up the 60 per cent equity under the new arrangement with a Singaporean liner, Pacific International Lines (PIL).

Nigeria and Singapore had reached an agreement to establish a private sector-driven national carrier with stake holding of 60 to 40 per cent respectively.

Peterside also blamed shipowners for not coming forward to apply for the national carrier status.

He said: “There is no 60 per cent of the equity that can be picked up anywhere and so that is why the process seems fairly long.”

Impediment

However, it was learnt that the only saving grace was the recent Memorandum of Understanding (MoU) signed in August 2016 between the Federal Government and PIL, but the Nigerian maritime laws obstructed the process as the government was reluctant to amend the loopholes in the Maritime Act, which could enhance the growth of the industry.

For instance, President of Shipowners Association of Nigeria (SOAN), Engr. Greg Ogbeifun, said at a shipowner forum in Lagos that Nigeria’s tax laws had put off PIL from the MoU because of its unfavorable terms and policies.

 

He recalled that the firm put it in writing that unless the tax laws were reviewed, it won’t be able to fly Nigerian flag as planned.

 

In the MoU, Ogbeifun said that PIL had initially wanted to provide the Joint Venture (JV) or Special Purpose Vehicle (SPV) that was more of expertise, where it would provide the managing director/ chief executive officer, chief operating officer and Nigeria would provide the chief executive officer.

 

Divergence

 

He said: “We said no, and that became the subject of further discussion and negotiation. At the end, it was agreed that PIL would bring the managing director /chief executive officer; while Nigeria will bring a deputy managing director; they will bring a chief operating officer and Nigeria will bring a deputy chief operating officer and chief finance officer, while they will bring a deputy chief finance officer. You may be aware that the PIL is a large international shipping company with a lot of experience internationally and in Nigeria for long.

 

Ogbeifun said that Nigeria saw benefits in leveraging on the company ’s worldwide experience, noting that the company had over a hundred ships in its fleet worldwide.

 

Dilemma

 

But the president noted that Nigeria lacked political will to implement the comprehensive report and recommendations made by a committee set by the Minister of Transportation, Rotimi Amaechi to study and make recommendation for the revamping and restructuring of the country’s flag administration in order to make it more attractive for international patronage.

 

For instance, Ogbeifun said that the government had failed to review the country’s tax laws and policies as it has been done in other maritime countries.

 

He explained that Nigeria had not been able to midwife the emergence of a Nigerian fleet, whether private fleet or fleet resulting from public private partnership.

 

Ogbeifun lamented that Nigerian flagged tankers were already disadvantaged.

 

The president explained that Nigeria’s flag administration was extremely weak to the extent that the Nigerian Liquefied Natural Gas (NLNG), which owns a large fleet trading worldwide, could not register its ships in the Nigerian flag in other to boost Nigerian tonnage.

 

Last line

 

Government should amend the laws impeding maritime business as done in other countries in order to boost shipping and earn more revenue.

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