Decayed infrastructure stunts maritime growth

Despite President Muhammadu Buhari’s foot print, the last two years in the maritime industry have been very challenging as many indigenous shipping companies have either collapsed or battling to survive. BAYO AKOMOLAFE reports

In the last two years of this administration, unfavourable government policies have led to unjustified bureaucracy, monopoly and corrupt practices, decayed infrastructure, high costs of doing business and lack of affordable distribution system in the maritime industry.

The policies have also affected the government financially, with less capacity to invest in infrastructure, job creation, traffic gridlock, security and funding of other businesses that could generate more revenue from the industry.

For instance, recent statistics from the port landlord, Nigerian Ports Authority (NPA), showed that container traffic to port dropped to 6,831,348 tonnage in 2016 from 9,419,672 in 2015.

Also, exports dropped drastically from 2,263,594 tonnage in 2015 to 1,485,338 in September 2016.

The number of vessels that entered the ports fell to 11 years low and stood at 3,347 in 2015.

The Central Bank of Nigeria (CBN)’s ban on importers of 41 items from its official foreign exchange window has also crippled some manufacturing companies, while port concessionaires said that their earnings had been grossly eroded due to low capacity utilisation of terminals and low traffic inflow into the ports.

The challenges saw the seaports contributing less revenue to the economy.

According to the President of Shipowners Association of Nigeria (SOAN), Engr. Greg Ogbeifun, every ship owner is feeling the pinch of the economic distress.

He noted that more than 40 per cent of vessels owned by private individual were no longer lifting petroleum products since the beginning of 2016 due to poor state of the nation’s economy.

The president added that some of their vessels had lost contracts with the international oil companies (IOCs) operating on in the country due to high cost of shipping.

Improvement

Despite the challenges, the appointment of three heads of maritime agencies brought some improvement into the industry.

Col. Hammed Ali (rtd) was appointed as Comptroller General of Nigeria Customs Service (NCS); Ms Hadiza Usma, Managing Director, Nigerian Ports Authority (NPAD, and Dr Dakuku Peterside, Director General, Nigerian Maritime Administration and Safety Agency (NIMASA).

At the NPA, the government had acquired and commissioned four new tugboats estimated at $30 million for port operations in order to address the challenge of inadequate tugboats, especially in Lagos area.

The tugboats were fitted with the latest technology with 60 tons bollard pull capacity each.

The vessels can handle vessels of 200 meters and they are multipurpose equipment with fire fighting facilities and two 3,680 kilowatts service engines.

Monopoly

The Government through NPA has also cancelled import and export monopoly at the ports, saying that every terminal is free to receive any cargo, provided it has technical competence to handle such. Before now, terminal operators were given areas of speciality in cargo handling, thereby giving some operators monopoly to handle certain type of cargoes.

A delegation of the United States Coast Guard (USCG) led by Commander Thomas Foster, who came on an assessment visit of Nigerian ports and terminals across the country, declared that Nigerian ports were safe for business as NIMASA had achieved 83 per cent compliance on International Ship and port Facility Security (ISPS) code.

It was only 13 per cent compliant as at 2015.

To promote trade, NPA and the NCS, last year, agreed to introduce the much-awaited Single Window (SW) platform through an intense automation and introduction of Standard Operative Procedure (SOP).

It was learnt that the single window would make Nigerian ports competitive in the international trade network and boost trade facilitation programme of the government.

Import duty

President Muhammadu Buhari, in a bid to promote development in critical sectors of the economy in 2016, approved a reduction in the import duties of 115 items in various sectors of the economy.

The approval is in line with the provisions of the Economic Community of West African States’ Common External Tariff.

An analysis of the import adjustment tax list, which contains 173 items, revealed that the Federal Government had given approval for the reduction of 26 of them, while it left the tariffs on 144 items unchanged.

Also, a ministerial committee was set up to establish a national fleet on Public Private Partnership model.

Vehicle imports

Also, a presidential directive restricting all vehicle imports to Nigeria sea ports only was issued in 2016 and the order took effect from January 1, 2017.

The restriction on importation of vehicles follows that of rice, whose import through land borders had been banned since last April.

The Federal Government also directed Nigerian Navy (NN) to deploy 39 newly produced gunboats and the second indigenous Seaward Defence Boat built locally by the navy to fight militancy and other maritime criminalities.

Also, this year the government approved $186 million to fight piracy on Nigerian waters.

Already, NIMASA has acquired 30 Epenal boats, three wave riders, six arrow heads, as well as NN pride, NNS Karaduwa, a 28.9 metres SDB, fabricated and built indigenously by personnel of the navy.

It also gave approval for the procurement of three helicopters and 12 fast intervention vessels to ensure coastal and aerial surveillance and patrol of the Nigerian maritime environment by the Nigerian Navy and NIMASA.

Dockyard

Buhari’s administration approved fund for NIMASA to acquire Africa’s fifth largest modular floating dockyard being built at Damen Shipyards and NIRDA in Amsterdam, Netherlands, to boost ship repairs in the country.

The move will save Nigeria $100 million annually, generate wealth and create employment.

Currently, over 90 per cent of vessels operating in Nigeria carry out their dry docking overseas.

Last year, the Federal Government also inaugurated the Command, Control, Communication and Intelligence System (CCCIS) at the headquarters of NPA to promote the rating of the country’s ports in line with the International Maritime Organisation (IMO)’s Conventions for the Safety of Life At Sea (SOLAS) and Ship and Port Facility Security (ISPS) Code.

Maritime varsities

The Federal Government has also established the Nigerian Maritime University in Okerenkoko and upgraded the Maritime Academy of Nigeria (MAN), Oron into a maritime university.

Conclusion

To boost the nation’s economy in the sector, there is need for government to review its anti trade policies.

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