Business

Maritime policies retard growth

Stakeholders have said that it will be difficult to achieve any success in the shipping sector without amending the loopholes in the maritime act, BAYO AKOMOLAFE reports

In 2016, the Minister of Transportation, Rotimi Amaechi, led Nigerian ship owners, stakeholders and critical investors to Singapore with the aim of striking a deal on the acquisition of ships to resuscitate the Nigerian National Shipping Line (NNSL).

This idea came 23 years after the demise of NNSL. During the trip, a Memorandum of Understanding was signed with a Singaporean shipping line, Pacific International Lines (PIL), to provide 40 per cent capital for the proposed shipping line, while private ship owners are expected to supply the remaining 60 per cent fund. However, five years after, nothing tangible has come out of the trip as government is reluctant to amend the loopholes in the Maritime Act currently impeding the growth of the industry. For instance, a former President of Ship Owners Association of Nigeria (SOAN), Greg Ogbeifun, said at a ship owners’ forum in Lagos, that Nigeria’s tax laws had put off PIL from the MoU because of its unfavourable terms and policies. He explained that government had failed to review the country’s tax laws and policies as it has been done in other maritime countries.

At the maiden edition of Nigerian International Maritime Summit (NIMS) held in Lagos recently, stakeholders emphasised the need for Nigeria to own a national fleet as a maritime country. They noted that absence of incentives from the Federal Government to shipping sector was the main reason it has been difficult for Nigeria to have a national shipping line as PIL shipping was not ready to invest in a hostile shipping sector. At the forum, the Director General of Nigerian Maritime Administration and Safety Agency (NIMASA), Dr Bashir Jamoh, said that no maritime nation could grow without incentives and palliatives, noting that all other sectors of the Nigerian economy had enjoyed palliatives from the Federal Government, except the shipping sector.

Optimism

Notwithstanding, Jamoh said that government was planning to grant zero import duties on vessels and ship parts. He stressed that the approval was currently before the Permanent Secretary of the Ministry of Transportation, Dr. Magdalene Ajani, expressing optimism that the announcement would be made soon. Also, the Chairman, House Committee on Maritime Safety, Mrs Linda Ikpeazu, stressed that lawmakers would look into the waiver granted to ship owners on vessel importation and give it a legal backing, adding that the National Transport Policy (NTP) was with Vice President Yemi Osinbajo ready to be signed. Speaking on the zero percentage waiver incentive, Emeka Akabogu, a maritime lawyer, said that the policy could only be implemented if given a legal backing. He said: “Everything is implementable if it is legal, the political will and strategies needed for implementing is needed and, I can assure you that at NIMS, we would come up with the needed strategy for implementing this waiver.”

Solution

As a way forward, a former Director General of Abuja MOU and Managing Partner of Paul Usoro &Co, Mrs Mfon Usoro, explained that opportunities and incentives given by other countries to their ship owners must be reciprocated in Nigeria. She added: “The PIL came into that MoU with their own shopping basket, they needed the kind of incentives they enjoyed in Singapore and which is also available in other countries.

“We have heard of fiscal schemes for sectors identified as key economic sectors in Vision 2020, because the shipping sector was not part of these identified sectors, we don’t have these schemes. “Meaningful tax credits, incentives and low interest loans and others are necessary, we have submitted them to the ministry and to the Vice President, Yemi Osinbajo, these were the list of demands by the Singaporean companies.” However, Usoro said that these incentives were not what the ministry of transportation could do as it does not control trade terms as it was done by ministry of trade. She urged the director general of NIMASA to bring all necessary ministries together where issues pertaining to the maritime sector could be discussed. Usoro noted that government’s approach to adopt the maritime industry growth was key to attaining the anticipated goals of the shipping sector. According to her, “how can we have Nigerians that own vessels but choose to use the shipping registries of other nations?” Also, a former Chief of Naval Staff, Vice Admiral Dele Ezeoba, said that it would be difficult to achieve any success in the shipping sector without a maritime transport policy. He noted: “No nation progresses without harnessing the potentials of its maritime space; it is like building on a faulty foundation or no foundation at all.” The immediate-past Chief Executive Officer of South African Maritime Safety Authority, Commander Tsietsi Mokhele, also urged the country to pick an area of specialisation within the maritime sector.

Steps

He explained South Africa was able to get the maritime sector right in their country as a result of good leadership. Mokhele noted that Asian countries were leading various aspects of shipping as Philippines led in seafaring, saying that Singapore had become a hub for connectivity through its ports, while Japan and China were among the top three ship owning nations. He advised that Nigeia should start by exploring its most advantageous areas in the maritime sector before addressing other areas of high value for its economy. For instance, he noted that the change in trade terms for the export of Nigerian crude oil from Free On Board (FOB) to Cost Insurance and Freight (CIF) would change the significance of maritime to the nation’s economy.

Last line

Government should explore some prospects, which could spur economic growth, prosperity of the country and massive opportunities for employment within the maritime sector.

 

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