The Marine Engineering and Naval Architecture (MENA) is a division of the Nigerian Society of Engineers (NSE). Shipping Position Daily correspondent, Dapo Olawuni last week had a chat with the Chairman of MENA; Engr Charles Otuonye who lamented that so many shipping companies have abandoned Nigeria as a result of over-taxation and the economic recession.
Engr. Otuonye also called on government to encourage building of ships in Nigeria, especially those required for the proposed shipping line.
“NIMASA is trying, but they need to work harder because regulation of shipping is an international affair”
What is your assessment of the level of compliance to ISPS Code implementation in Nigeria?
Nigeria is a signatory to the ISPS Code and we are really trying in the area of implementation in order to make sure that the code is implemented to the letter, we need to look at some grey areas where we can upgrade, security is paramount to us this time that the world is experiencing security challenges, we need to beef up our security and train more people into it, we need to organise seminars and workshops to enlighten our teeming youths. By doing this we could even create more jobs and open up avenues for them.
Nigeria is fortunate that we have not witnessed any security disaster at our ports, but there are threats which we also need to be aware of and cub them before they escalate.
What is your advice to government on setting up a new national carrier, and in what way will the new national carrier impact on your members?
My advice is that we should learn a lesson from our previous experience with the national carrier, this is not the first time the government is funding a national carrier. We do a research on why the first one collapsed before we are coming up again to do another one. If you look at it nitty-gritty, you would find out that the Nigerian National Shipping Line started in the late 1950s, it developed to the extent that we had 21 vessels on the Nigeria fleet, but today, where are they?
Ordinarily, one would have reasoned that from 1955 till date, if we are thinking of forming another shipping line, our thinking is that we should be looking inwards; the ships should be constructed by Nigerians.
Talking about the 60 per cent involvement of Nigeria financial commitment into the Joint Venture, if you inject this money into the Nigerian system, it would go a long way, all the agitation by the Niger Delta militants would die down, we would train them and harness their potentials for the benefit of the economy. My opinion is that Nigerians should build these vessels.
Do we have the expertise?
Yes we do. Building a ship is not rocket science, the technology is everywhere, it is in the capacity of Nigerians to nurture it, we need to bring these capacity together as a nation; today, ships are built in Nigeria, we have experienced engineers who have worked all over the world, we have renowned naval dock yards and naval architects who would develop the ship from conception up to the stage of test running the ship. It is a question of starting, if we are not building the engines in Nigeria, then we can import it, that is what other shipbuilding nations are doing, we could import the main engine from Oregon, import the caterpillars from US, import the compass from Norway, but the assemblage would be done in Nigeria, we cannot wait until we start manufacturing these parts in Nigeria before we can build ships. The computers we are using today, the parts were imported from abroad, so building a ship is not something from the blues, it is actually practicable, but we need to have the government giving Nigerians confidence to do it, but if we are waiting to get all the parts manufactured in Nigeria, then we would never get it done.
Secondly, our mind-set as Nigerians is foreign, we believe we cannot do anything on our own from the scratch and this is why we even import toothpicks.
If Nigeria is going to need 10 vessels for the national carrier and you take the contract to South Korea, do you know how many jobs you have activated in that place? The youths would be smiling to the banks and their standard of living would be improving, whereas, we are the ones sponsoring them.
I would advise that if they want to take-off with 10 vessels, let them give five of it to Nigerians to construct, let's just try it, by the time it's completed, we would combine it to the five constructed outside.
But now that the shipping line is being delayed because Government is sourcing for the 60% equity required by Nigerian side of the JV, what's your take?
The government is the richest organisation in Nigeria, all the revenue goes to the government, it now depends on how they can appropriate it, some countries deliberately invest huge sums of money in ship construction because it generates a gamut of activities, it stimulates the economy, there is no aspect of the commercial world that is not involved in shipping, starting from the banks, legal practitioners, food vendors, farmers would be there to export, hoteliers, contractors, shoe makers would all stay around the shipyard to partake in one thing or the other.
It is a huge benefit that Nigeria is losing and we need to re-strategize because shipping stimulates the economy, create more jobs and increase quality of lives, there are certain things that the airplane cannot carry.
To what extent do you think recession and FOREX have affected the sector?
We have taken it upon our self to tour some of the ship management companies, some of them are weeping, some have completely gone out of business because the cost of running the organisation is astronomically very high. We have visited the Niger Dock at the Snake Island at Tin Can Port, we visited them as part of our technical industrial visit and they were lamenting that the cost of importation has gone higher, the cost of importing machines and everything is high, so, their cost of doing business here is transferred to Nigerian owners of ships that want their ships dry docked here, and eventually, the cost of dry docking ships in Nigeria now is very high, and it would be translated along the whole economy, so these companies cannot operate in this environment because it is very harsh.
Also, some of the companies which we also visited complained about double taxation. For example, at the jetty where they berth their vessels, the local government would task, the state government would also task them on the same vessel, so there is need to harmonise taxation in Nigeria, we need to make it reasonable. One of the companies we visited in Port Harcourt has their head office in Lagos, but the local government in Port Harcourt is ready to come to Lagos to collect tax. So how can they maintain their staff and maintain their vessels with this kind of system? Some of the ships are now floating headaches because it is giving the owner problems to maintain it, when the tax is too much, you cannot break-even; this is why most of Nigerian shipping companies have closed shops, the ship repair yards in Nigeria remain the costliest, even some people from Ghana, Sierra Leone should be coming here to dry dock, but when they consider the high fees we charge compared to South Africa, they would rather go to other places to save cost, in fact, more people now go to Ghana.
Looking at NIMASA in recent times, how would you rate their performance?
NIMASA is a government agency, they are trying, but they need to work harder because regulation of shipping is an international affair, the standard of what we are doing in Nigeria here must be the same thing obtainable in China, America and so on. We belong to the IMO and IMO oversees standard for the whole world, so NIMASA must not allow any Nigerian factor to come into their activities, because whatever they failed to do perfectly, it would manifest when they go to comity of nations.
What are the areas you want them to improve upon?
Reporting and following up of maritime accidents, they should clear the waterways of wrecks, there are too many wreckages along the Nigerian coast, from Lagos, Sapele, Warri up to Calabar. There are some ships that have gone aground for many years and they have become a danger to other vessels plying that route, the NIMASA should make the waters safe for navigation.
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