Poor policies, taxation clog national fleet development

Four years after it was established, the National Fleet Implementation Committee (NFIC) is making a new move after its first failure to set up a national fleet, BAYO AKOMOLAFE reports

Twenty-four years after the demise of the Nigerian National Shipping Line (NNSL), the National Fleet Implementation Committee (NFIC) is struggling to float a national carrier to reclaim Nigerian shipping business currently dominated by foreign ship lines. Nigeria has lost over N43.39 trillion ($120.53 billion) in gross freight paid on import and export cargoes to foreign owned vessels between 2004 and 2018.

Worried by the loss and its failure to implement a Memorandum of Understanding (MoU) signed in August 2016 between the Federal Government and a Singaporean firm, Pacific International Lines (PIL), NFIC explained that unfavorable trade policies, high taxation and poor business practices were the major impediments to the successful establishment of the long-awaited national fleet.

Because of these challenges, data by the Nigerian Shippers’ Council (NSC) revealed that Nigeria had lost over N43.39 trillion ($120.53 billion) in gross freight paid on import and export cargoes to foreign owned vessels between 2004 and 2018. It added that a total of $57.94 billion was lost on freight paid by Nigerian shippers on imports and $62.59 billion on freight paid on export.


The first shipping line was established by government in 1959 with 24 vessels, but could not compete with European and Asian lines, thereby creating rooms for dominance of the business by foreigners. It was gathered that the Nigerian maritime laws obstructed the process as government was reluctant to amend the loopholes in the Maritime Act, which could enhance the growth of the industry.

For instance, a former President of Ship Owners Association of Nigeria (SOAN), Greg Ogbeifun, said at a forum in Lagos that Nigeria’s tax laws had discouraged PIL from the MoU because of its unfavourable terms and policies. He recalled that PIL put it in writing that unless the tax laws were reviewed, it won’t be able to fly Nigerian flag as planned.

New moves

Director-General of Nigerian Maritime Administration and Safety Agency (NIMASA), Dr. Bashir Jamoh, said that it had become imperative to have a sustainable national shipping line in order to avoid the reasons the NNSL was liquidated. Jamoh, who stated this in Lagos while receiving members of the National Fleet Implementation Committee (NFIC) led by the Executive Secretary, Nigeria Shippers’ Council (NSC), Hassan Bello, explained that the need for a national carrier could not be over emphasised owing to the enormous economic benefits it offers.

Jamoh said: “There is no better time to have a national carrier and develop the maritime industry than now, when the world is gradually looking away from fossil fuels, which currently form the mainstay of the Nigerian economy and President Muhammadu Buhari is trying to diversify the economy from oil. “Nigeria cannot be caught unawares; we need to look at ways of developing our shipping sector, which, from studies, is capable of earning the country even more than oil annually.”

He explained that the Nigerian maritime sector had the potential to grow by between three and five per cent annually due to the size of the local market, but regretted that this capacity remained mostly untapped. He noted that since the liquidation of the Nigerian National Shipping Line (NNSL) in 1995, the country had been looking for avenues to float a national carrier, though through private sector participation.

The director general added that the Federal Government had, over the years, put different measures in place to stimulate the maritime sector due to its strategic importance to the economic fortunes of the country. Jamoh said that the agency’s commitment to fully and actively supporting the drive for a wholly Nigerian-owned and operated fleet was unwavering, explaining that it was one of the main pillars that NIMASA is built upon.

On his part, Bello, however, said that the committee was at a critical stage of the national fleet implementation process, stressing that capital injection would be required at this juncture to actualise the project.

He said: “The quest for a Nigerian fleet is essential in ensuring that the country regains control of our external trade, thereby opening up the economy. This is a perfect time for Nigeria to invest in its own fleet, with global dependency on oil projected to dwindle considerably by 2030 and alternative power sources replacing fossil fuels in many countries. “Consequently, a mono-economy, such as ours, should be diversifying into other revenue streams, with maritime being a major potential earner.”

He stressed that the primary objectives of the committee were creating employment opportunities for Nigerians, reposition the Nigerian maritime sector and generating revenue for the Federal Government as well as economic benefits to businesses ancillary to the maritime sector.

Last line

National fleet wholly owned, manned and operated by Nigerians would be ideal for the country as it will create employment opportunity and curb capital flight. It will also address the imbalance in the maritime industry.




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