The Rector, Certified Institute of Shipping of Nigeria (CISN), Alex Favour Okwuashi, a professor of maritime administration, in this interview with BAYO AKOMOLAFE, says the maritime industry can grow the nation’s economy after coronavirus crisis, if government focuses on infrastructure development and capacity building
What was your observation of the port industry when coronavirus was first noticed in the country?
The recent lockdown has exposed the nation’s ill-preparedness to national emergencies such as the outbreak of coronavirus and other maritime emergencies as always seen during cyclones, typhoons, hurricanes and storms, among others. Initially, we noticed there were irregularities in port management, lack of tools, basic medical infrastructure to combat COVID-19 despite the huge financial contributions by the port stakeholders. When COVID-19 was noticed in the country, the cadets of the Certified Institute of Shipping of Nigeria were sent out to support frontline paramedics to educate the public on how to protect themselves with kits and social distancing.
How do you think Nigeria can boost the nation’s economy through the maritime industry after COVID?
First of all, government must look at the importance of shipping in the maritime industry. It creates employment and other related infrastructure and business. The industry can generate over five million jobs for Nigerian youths and can make huge contributions to the nation’s Gross Domestic Product, national income, balance of trade and foreign exchange, if attention is paid to the industry.
How do you perceive performance of both public and private maritime institutions in the area of capacity building after the pandemic?
The Maritime Academy of Nigeria at Oron is not adequately equipped. The Certified Institute of Shipping of Nigeria (CISN), Federal University of Technology, Owerri (FUTO), Ladoke Akintola University of Technology (LAUTECH) and other maritime institutions are still not adequate to produce the strategic manpower needed for the industry. Capacity building in the industry is lopsided because we don’t have the ships, technological equipment and other facilities. Countries like Malaysia, Singapore and others are now in human capital export because their government helped them to train students and turn them out to earn foreign exchange because they have the technology. Nigeria should follow the same step by training its people. Our study of human capacity requirement at Certified Institute of Shipping shows a short fall of over 3,500 of different categories of technical and management skilled manpower required for various areas such as engineering, seafaring, shipping management, maritime administration and other technical support staff. We all know that Nigeria lacks adequate maritime institutions. This is what triggered some of us who have worked in the sector for a while to think of how to help the government bridge the gap in the country’s maritime education. After many years, I saw this loophole, so I decided to work hand in hand with a few persons to establish Coastal Polytechnic, Lagos, so that we can fill that gap in the industry. The maritime industry is capital intensive and institutional infrastructure are very expensive. In our engineering workshop, we have to buy machines and the machines cost millions and private individuals might not have the resources but if you are determined, you will start from somewhere. So, post-COVID-19, government should assist various maritime institutions with bailout funds the industry needs skill manpower to steer the economy. First of all, government should help private sector to build institutions and train the human capital in the critical areas like marine engineering, naval architecture and so on; because you cannot build a ship without these people. Government should syndicate a loan for ship managers so that they can buy some of the vessels, especially tankers whether crude or petroleum tankers because that is the goldmine for Nigeria. It will be difficult to compete with foreign vessels without ships. Maersk Line vessels are bringing electronics into the country. We should emphasis shipment of crude oil out of Nigeria because our refineries are not working. So we are importing instead of exporting.
What is your assessment of Nigeria’s terms of trade in global shipping?
The Freight on Board term of trade is one of the biggest tragedies that happened to the shipping sector in the country. When the 1986 shipping policy came, government tried to come up with a shipping policy, but there was a clause that Nigerian National Petroleum Corporation (NNPC) can sell its oil on FoB bases. Whereas, this was supposed to be a protectionist policy, but yet, there was a great gap in that policy. I don’t see why it should be that way. Other countries of the world make policies to favour their people but this one was a suspect, because if we had that policy saying that we could sell oil at Cost, Insurance and Freight (CIF), our local insurance companies would make money as well as the shipping industry, which would make money from freight. It would have a lot of multipliers effect, but this Freight on Board term of trade is very dangerous to our country, it would not make us build capacity to compete in that market. If the government wants to arrange another shipping policy, that area must be taken care of.
The cost of transporting crude oil out of the country was enormous and accounted for almost half of the total cost of the commodity. This is because Nigerian crude oil is being sold on Free on Board (FOB) basis. There is a lacuna in the National Shipping Policy Act 1987, which the Certified Institute of Shipping of Nigeria (CISN) Bill, would have resolved, if it had been signed into law.
What do you think government should do to assist local ship owners?
I see Cabotage as solution to the Nigerian shipping only if we can allow government to support capacity building in ships acquisition because no single individual can afford that kind of money to acquire new ship, depending on the type we are talking about. How many indigenous ship owners can afford that? Not even bank because they are always very careful of financing that kind of project but government has the money. What government should do is to enter into agreement with private firms. In advance countries, government will buy the ship and set up a consortium of ship managers for those in tanker, Roll on Roll off, and other kind of ships according to their specialisation. That is the only way we can develop our capacity and as we are doing it we are developing capacity financially so that this group who form consortium will be empowered. So, until we do such thing, our maritime industry will continue to be dominated by foreigners.
Fifteen years on, what are the gains of cabotage regime?
Nigeria is losing over $6 billion revenue yearly to foreign shipping companies due to the poor implementation of the Cabotage Act. The Coastal and Inland Shipping (Cabotage) Act 2003, was introduced in the country to protect the domestic shipping industry from foreign dominance. However, 90 per cent of the indigenous shipping companies in the country has gone out of business due lack of patronage by the Nigerian National Petroleum Corporation (NNPC). Because of superior financial strength and high technical and management skills of foreign shipping companies, NNPC preferred the foreign shipping lines above the indigenous operators to lift over 150 million tonnes of Nigerian oil. The failure to amend the glaring defects in the Coastal and Inland Shipping (Cabotage) Act, 2003 has not helped the existing and potential local operators to procure vessels in order to establish a foothold in the industry. The indigenous shipowners in the country lacked power to compete with foreign shipping companies with their modern vessels and the promulgation of the Coastal and Inland Shipping (Cabotage) Act, 2003 can be seen as one of the courageous steps taken by the Federal Government to empower local operators to take charge of the captive market within the territorial waters but unfortunately the Cabotage law has failed to achieve its purpose. For instance, before the enactment of the Cabotage Act, some of the challenges which had bedeviled the maritime industries were still there. Also, the failure to execute the provisions of the Cabotage Vessel Financing Fund (CVFF) has dragged the industry back to the era prior to the enactment of the Cabotage Act.
What is your assessment of Nigerian water security?
Everybody is aware of the maritime security in the country’s water today. The country is facing constant threat from sea robbers, smugglers and pirates. The issue of security is exclusive to Federal Government and there is need to empower the navy by equipping them with necessary tools. The nation cannot afford to entrust security into the hands of individuals. But we are happy to say that the Nigerian Navy is equal to the task. I solicit for more security apparatus for them to enable them to function effectively by providing more frigate, platform, satellite, coastal radar and unmanned aircraft. Speed boat should also be provided for search and rescue purpose as well as proper training for the naval personnel to carry out the function of maritime security along with the maritime administration staff. This is what the Memorandum of Understanding between NIMASA and navy is all about. But we have observed professionally that Nigeria is still toying with the issue of safety and environment by not complying and enforcing this due process required by the International Maritime Organisation (IMO). The current anthropogenic activities within urban area of port such as ships, oil companies, industrial wastes have degraded the marine environment to the extent that one begin to ask questions such as are the activities of companies and individual regulated? What is the Port State Control of maritime administration is doing? It has been noticed that institutions within the port have not complied with the use of port reception facilities. The port terminals are still dirty with fluid and grease. What is the Port State is doing?
How will you assess the country’s marine environment?
Vessels are still discharging ballast water into Nigerian waters. Besides, there are wrecks, derelicts and abandoned ships seen all over the places. We believe that some of the challenges we are having in the industry can be handled if the relevant agencies will play their pacts.