Since 1995, when the then-minister of transport, Major General Ibrahim Gumel (now deceased) supervised the liquidation of the nation’s national carrier; the Nigerian National Shipping Line (NNSL), Nigeria has been plummeted from a nation of almost 25 publicly – owned ships to a nation that can not at the moment boast of any national carrier.
A couple of years ago, Indigenous Shipowners Association of Nigeria (as it was then called) toyed with the idea of floating a mega shipping company. This remained only an idea since it was mooted more than six years ago.
We recall that, in 2011, and after a long period of silence, the then-minister of transport; Alhaji Ibrahim Bio gave a hint that the Federal Government had given approval to the Nigerian Maritime Administration and Safely Agency (NIMASA) to float a new national carrier; albeit, in partnership with the private sector.
We are often told that Nigeria has more than 1000 ships in her registry, but we dare ask: how many of them are actually owned by Nigerians and what is the deadweight of each of the ships? For those who have also had to ask the question about the current status of Nigeria as a maritime nation without a ship, the answer should start from the foray which Nigeria made into shipping and ship ownership with the birth of NNSL, the subsequent death of NNSL, the creation of an interventionist policy called Ship Acquisition and Ship Building Fund (SASBF) and the abuses which the scheme was subjected to and its subsequent scrapping.
The birth of a successor company to NNSL; in the name of Nigerian Unity Line (NUL) and its death will offer a good thesis on how and why government businesses fail in Nigeria. While the defunct NNSL (at a time) had a fleet that is in excess of 21 bulk cargo carriers, beneficiaries of the SASBF could only account for only one or two vessels that could not stand the test of time. None of the few ships that were bought with the SASBF sailed for more than three years.
And since the failure of both the NNSL and the SASBF, the challenge has been – how does Nigeria get back on track as a ship-owning nation. While some may argue that government’s direct participation in shipping through tonnage ownership is no longer in vogue, especially as most African nations have done away with the idea, it is also arguable that government can not completely divest from this core sector of the nation’s economy.
We note that there have been feeble attempts on the path of the Nigerian Maritime Administration and Safety Agency (NIMASA) to galvanize the finance sector, especially the banks to embrace ship financing. Very few banks have shown interest in funding ship acquisition, majority of the banks prefer to fund acquisition of service vessels in the oil and gas sector.
Acquisition of container ships and bulk carriers is understandably out of it. Not until the Cabotage law came into the centre stage, there was little or no interest on the part of the financial institutions to be a part of efforts that were aimed at boosting indigenous fleet. We recall that when government threw its weight behind fleet expansion through the SASBF, there was no Cabotage.
Although, it is more than one decade since Cabotage law came into effect, it has not enhanced ship acquisition, neither has it enhanced the fortunes of indigenous ship owners.
We had thought that since one of the core functions of NIMASA is improvement of Nigeria’s participation in sea borne trade, it should have begun to fashion out a workable and sustainable way to boost our indigenous fleet, even if it is centred on acquisition of Cabotage vessels.
But, the lot has fallen on the shoulders of the Executive Secretary of the Nigeria n Shippers Council; Mr Hassan Bello, who is the Chairman of the Implementation Committee for the new national fleet. It is an all-encompassing body made up of stakeholders from both private and public sectors.
It is gladdening to read him recently while speaking on the form of shipping line that the committee is midwifing. According to him, it is not in the mode of government-owned Nigerian National Shipping Line or its successor; the Nigeria Unity Line.
“It is a private sector-driven business venture; it is going to be driven purely as a business enterprise with equities and structure totally spelt out. You can now see that it can not be a national carrier in the mode of the NNSL, it’s a totally different arrangement”, he was quoted as saying.
We agree that Nigerian banks are very relevant, but since they are still largely reluctant and also lacking in the liquidity that will be required to acquire the type of ships that the committee has in mind , it is our candid opinion that the option of offshore partnership with a Singaporean shipping line; PIL is a commendable feat.
It also commendable that Nigerian investors (not government) will control 60 per cent equity in the new business, which is clear departure from previous templates in which government holds controlling shares in such businesses under the guise on Pubic Private Partnership (PPP).
We strongly advocate that government should leave ship acquisition for the private sector. If two previous experiences (through NNSL and NUL) failed, there is absolutely no guarantee that a third attempt will be any better.
Under the circumstances in which Nigeria has found itself, the most attractive option remains a private sector-driven national fleet. The role of government may well be to provide policy guidelines and enablement and incentives for investors.
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