“Nigerian banks do not have the rich culture of financing vessel acquisition”  ………Barrister Emmanuel Nwagbara

“The CVFF has not been managed well, but it is not that it has been mismanaged”

In this interview with Anozie Egole, renowned maritime lawyer; Barrister Emmanuel Osuala Nwagabara, scores the Nigerian maritime industry low. He also speaks on sundry industry issues.  

 

 

 “The location of tank farms around the port area has been a pain in the neck”  

 

 What is your appraisal of this year 2018 in the maritime sector?

Unfortunately, I can’t say that the year has done well that is to say that I cannot say that the maritime industry has done well this year. The reasons are many, for the first time let’s look at the ports environment, for the first time the cost of moving a container from the ports to a distance of less than 80kilometers in Nigeria has doubled within one year. It now costs between N500,000  and N800, 000 to move a container from the ports to a place like Alaba International or  Ifo in Ogun state compared to what we used to have last year and before when it was below, N300, 000. So looking at it from that point alone, we have not done well.

Secondly, of course you know that it is not also unrelated to the fact that movement into and out of Apapa has been at the worst level   since the last five years. This year has recorded the worst traffic situation that necessitated the direct intervention of the presidency; we have never had it before. And what that means is that the time it takes ships to turnaround within the Nigerian ports has also increased many times over and the result is that, many ships do not ordinarily want to come to Nigeria as we speak. Because they are contending with high cost of coming to Nigeria to do business; not in terms of Naira but in terms of time spent waiting to discharge their cargoes and go out. The insurance they pay to take care of any attack because while waiting at the anchorage they could be attacked because of the prevalence of piracy within the golf region. So this year has been rated very low on the scale of performance in the maritime industry in Nigeria.

 

Talking about the issue of traffic gridlock in Apapa, how do you think it can be solved? 

We need to relocate some of the facilities that service the maritime industry; we need to relocate the facilities   for the reception of empty trucks. We don’t need to have empty trucks taken to the ports by the transportation companies. So we need to have our holding bays outside the ports area. The location of tank farms around the port area has been a pain in the neck of the maritime industry in Nigeria. This has been criticized over and over again and even Lagos state government has supported the call for de-licensing of tank farms within the port area and yet this has not been done. Because of the presence of these two facilities at the port area, the roads leading to the ports have been under constant pounding by articulated vehicles like trailers and tankers and these have caused degradation of the roads. That is why we have the pot holes on the roads and until these two facilities are relocated, the roads will never feel better. The third thing is that the Nigerian Ports Authority should direct that some of these vessels that still call at the Lagos ports should call at the ports outside the Lagos area. We have ports in Port-Harcourt, in Calabar, Warri and ports which we call eastern ports. So we need to direct that some of these consignments should be taken to ports outside Lagos so that there will be less pressure on the Lagos ports which translates to pressure on the roads.

 

What is the update with the case between the Nigerian Shippers’ Council, terminal operators and Shippers Association of Lagos State?

Officially, I will tell you that the cases are at the Supreme Court right now on appeal and this is official. The case between the shipping companies, Nigeria Shippers Council and Shippers Association Lagos state is at the Supreme Court waiting for adjudication and appeal. The case between the terminal operators and the Nigerian Shippers Council and Shippers Association Lagos state is also at the Supreme Court waiting for Adjudication and appeal, officially this is the position.

 

How do you think having a national carrier in the maritime industry can be achieved?

Well, the fact is that we have to correct the impression that a national carrier is a government fleet; it doesn’t necessarily mean that it is a government fleet. It means a carrier in which government has some interest, corporate Nigeria has some interest and not controlling interest. What we are saying is that it is possible to have a private sector driven national carrier where you have fleet of ships purchased under a particular nomenclature with the private sector having dominant shares in the project with government having minority share in the project. And the advantage of it is that it will have Nigerian importers and exporters because we will be able to transport our non-oil exports at a very good rate knowing that we need to promote development in our non-oil export sector by promoting the increase of export in this particular sector. So it is possible, it requires power by government to do that. It also requires the private sector getting ready and by this we mean that the banks should finance the purchase of vessels. But the Nigerian banks unfortunately do not have a rich culture  of financing ships, there must be credible investors with track records who are prepared to run shipping business in the most efficient and transparent manner. There must be banks that are ready to bring money to purchase these ships ; and that is where the private sector comes in. Then the government must also create enabling environment for that business to thrive. Part of what developed maritime nations do is to allow such investment a tax regime that is friendly; that allows such companies to plough back their profit into the business with a view to expanding the number of vessels in their fleet. And over time the country will benefit because employment will be created and the economy will be boosted.

 

Do you think the CVFF has been mismanaged?

I won’t use the word mismanaged, I will say it has not been managed well because mismanagement connoted many things; it could be embezzlement and all that, but I can say that it has not been managed well and even now, I think there are conflicting reports about the custody of the fund. I remember that the fund was domiciled with four banks during the administration of the last DG of NIMASA but now they are saying that it is with the Central Bank of Nigeria. I am not too sure now where it is. What I will say is that it has not been managed well, but not that it has been mismanaged. If it has been managed well, by now at least the fund is supposed to have produced at least one vessel for ship owners in Nigeria. Because CVFF, as provided in the Cabotage Act, is supposed to be for the assistance of Nigeria citizens who desire and has the capacity to own a vessel; assist them by way or repayable loan. If it has been managed well since April 2004; more than 14 years ago by now it supposed to have produced at least one vessel.

 

Do you think there is any need for the reintroduction of MASSECA Bill?

On the MASSECA Bill, my position has always been that we like to have too many institutions and bodies in the maritime sector doing the same thing and at the end of the day, that same thing is not done well. I think that the best we can and should do in the maritime industry is to strengthen the security outfit that we have right now to police the waters and protect vessels on the Nigerian waters. Sincerely I do not think that having another maritime security outfit is necessary, what will the Nigerian Navy and NIMASA Maritime Command be doing? We need synergy between the Maritime Guard Command and the Navy to work together; strengthened by the provision of the necessary forms that can check piracy in our ports environment, which is what we really need. I don’t think the security of the Nigerian waters should be entrusted to private hands. It is like saying that the secular society in Nigeria should be entrusted with a private police. We need a government outfit like that Navy working with the Maritime Guard Command to police the Nigerian waters. If we need to create coast guards out of the Navy and NIMASA, it is a different thing altogether, you can call them any name you want and their function will be to safeguard ships coming in and out of the Nigerian waters and ensure that piracy doesn’t prevail on Nigerian waters; as far as it is a government outfit I am in support of it. But I am not in support of handing security of our waters to private hands. 

 

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