Business

Naira Crisis: Shipping contractors groan over N161bn loss

A total of N161billion ($350million) earnings has been wiped away in the ship chandling sector of the economy in less than three months. The earnings were lost by Nigerian ship chandlers to foreigners due to government’s poor cashlese policy between January and March, 2023. It was revealed most supplies were now being done from neighbouring countries within the West African coasts because of the problems created by the Central Bank of Nigeria (CBN) via naira redesign, poor online transaction and failure of commercial banks to accept old currency notes.

The President of the Association of Chandlers and Ship Suppliers of Nigeria (ACSSN), Vickson Aghanenu, noted that the supply of essential provisions and services such as fresh water, food, meat, spare parts needed by shipping lines and crew members were at low ebb in the country, leading to losses in foreign exchange earnings. He noted this was happening at a time the sector was battling with unlicensed people doing the job illegally. According to him, members of the association were unable to supply provision to thousands of vessels operating on Nigerian waters in the last two months.

The Nigerian Content Development and Monitoring Board (NCDMB) had estimated that over 20,000 ships and platforms were operating on the nation’s waters. The president said that the money lost within the short period was 25 per cent of the over $1.4billion of their annual earnings in the upstream sector. He stressed that in line with the International Ship Suppliers & Services Association (ISSA), ship suppliers should be given ‘essential worker’ status to enable them to keep the world’s ships stocked with vital supplies and spare parts during this period. Aghanenu said: “Port State Control authorities ought to have ensured that all steps were taken to enable the chandlers do their business without drawback. “The naira problem in the country is a general concern and of huge consequence to the economy and worse to ship chandlers.

This is because our transactions are mainly in cash to market women and super markets, who refused to accept transfer of fund. Both individuals and corporate institutions are affected. “This is an embarrassment to us as a country at large. Since the emergence of this cashless challenge, many ship owners have directed their vessels to stock outside the country. This has led to huge capital flight. At the moment, ship chandling business is on standstill in the country.” Also, he stressed that some ship owners got their supplies through touts and non-professional chandlers, who have invaded Nigerian oil and gas sector to do supply illegally, leading to revenue loss to both government and genuine licensed members. Aghanenu noted that more than 20,000 vessels, oil platforms, rigs and barges operating in the oil gas and port sectors annually needed the services of ship chandlers for their essential provisions and services, saying that in line with international best practice, only registered and license chandlers are allowed to do supply on board vessels. The president noted that lack of regulation of the profession by the appropriate agency of government was partly responsible for the criminal activities on Nigerian waters, stressing that the industry had been taken over by contractors and subcontractors carrying out ship chandling and supply services. Aghanenu added that the illegal chandlers had no Nigeria Customs Service (NCS)’s valid ship chandling licence, valid licence from department of Petroleum Resourses (DPR) and valid membership seals and certificates from ACSSN. The president explained: “The licences and certificates are mandatory for all contractors and subcontractors, whether indigenous or foreign corporation or persons to carry out ship chandling and supply services in the Nigeria oil and gas industry.” It would be recalled that the association had complained that Customs had no authentic record of genuine professionals in the industry, alleging that the local shipping companies and foreign vessels coming into the Nigerian ports were culpable of patronising the touts. It noted that supplying essential commodities to Floating Production Storage Offshore Vessels (FPSOVs), oil rigs, platforms, supply boats, LNG vessels and bonga flow stations by unlicensed people was worrisome, saying that the illegal practice was causing capital flight in the country

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