It was the then- Nigerian Shipping Companies Association that kick-started the quest for the enactment of the Cabotage Act. At the onset of the lobby to enact the Act, we can recall quite vividly how the ship owners told the law makers that if the almighty United States of America could make a bold statement of indigenising her coastal shipping business through the Jones Act of 1938, why wouldn’t Nigeria with a coastline of about 870 kilometers and almost 3,000 kilometers and about 22 ½ billion cubic metres of crude oil deposits, 3 ½ trillion cubic metres of hydro carbon and 42.7 billion cubic metres of bitumen deposits embrace protectionism.
With a lofty objective of deliberately reserving commercial transportation of goods and services within Nigeria’s coastal and inland for Nigerian-flag vessels and vessels that are owned by Nigerians, the Cabotage Law of 2003 spelt out four pillars upon which its implementation must rest.
The four pillars are that: Cabotage vessels must be wholly -owned by Nigerians; they must be registered in Nigeria, must be crewed by Nigeria and Nigerian shipyards must build and repair Cabotage vessels.
Between 2004 when the Act came into being and now, there have been many ministers of transport and many Directors General at the helm of affairs at the NMA and the Nigerian Maritime Administration and Safety Agency (NIMASA),
After about 14 years into its enactment, it is apt to ask the following questions: Why has it been difficult for Cabotage to create (even) marginal employment for the nation’s swelling population of seafarers. Why is it that both NIMASA and the supervisory ministry of transportation are more interested in granting waivers to foreign flag vessels to continue trading within our coastal waters in clear circumvention of the provisions of Cabotage? Why is it that 15 years down the line, indigenous shipping practitioners are still full of the same lamentations as they were, prior to the enactment of the Act? Why do they still complain that multinationals are dominating the business of shipping in Nigeria?
An important annexure in the Cabotage Act is the Cabotage Vessel Financing Fund (CVFF); a Fund which is derivable from the two percent deductions from all contracts awarded under the Cabotage regime. It was designed to enable indigenous shipping companies acquire adequate tonnage to be able to participate in coastal and inland trade, still currently dominated by foreigners, who also dominate deep sea shipping.
NIMASA, which is statutorily mandated to disburse the CVFF, at a point appointed four banks: Skye, Diamond, Fidelity, and Sterling as Primary Lending Institutions (PLIs) for the CVFF.
Under the CVFF guidelines, each beneficiary must submit application need to tie their loan application to a maritime project for which 15 per cent of the project cost must be provided, having been pre-qualified by NIMASA.
Can we then ask NIMASA these questions? How many indigenous ship owning company has it registered since 2004 and how many foreign? To what extent has the CVFF been useful to Nigerian operators?
The fact is: the CVFF remains an unfulfilled dream of the drafters of the Cabotage Act.
At some point, there was an announcement of six companies that would benefit from the fund; that was the last was heard of it. If it is true that NIMASA had for a long time conducted due diligence on the six companies and handed over to the Ministry of Transport, if it is also true that it is the Presidency that is delaying the disbursement, then our fears about the insincerity on the part of government may have been confirmed.
From our findings, the Fund which has grown into about N100billion is currently warehoused with the Central Bank of Nigeria (CBN) owing to the Treasury Single Account (TSA) policy of the Federal Government.
Between NIMASA and the supervising ministry of transportation and the Presidency, there is a lot that is going on that is detrimental to the success of Cabotage in general and the survival of the CVFF in particular.
The latest joke is that the House of Representatives is planning to create a Maritime Bank with proceeds from the CVFF. The Chairman, House Committee on Maritime Safety, Education and Administration; Umaru Bago was quoted as saying that about N55billion would be taken from the N100billion which has accrued from the CVFF over the years to establish the maritime bank.
Since when has is become the duty of lawmakers to create banks? If the Ministry of Transportation, the Presidency and the Central Bank of Nigeria, with all their powers are yet to determine what to do with the CVFF since its creation, what can the lawmakers do?
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