Former Chairman NIMAREX, and CEO of Multi Trade Limited; an indigenous shipping company and a key member of Nigerian Shipowners Association ( NISA), His Royal Majesty Chijioke Egwuagu Collins, spoke with some maritime journalists in Lagos recently. He talked about the Cabotage Act and how Nigerians can benefit from its proper implementation. Roland Ekama was there for Shipping Position Daily.
"A simple marine notice to be issued by NIMASA will stop violation of Cabotage…..”…His Royal Majesty Chijioke Egwuagu Collins
Former Chairman NIMAREX, and CEO of Multi Trade Limited; an indigenous shipping company and a key member of Nigerian Shipowners Association ( NISA), His Royal Majesty Chijioke Egwuagu Collins, spoke with some maritime journalists in Lagos recently. He talked about the Cabotage Act and how Nigerians can benefit from its proper implementation. Roland Ekama was there for Shipping Position Daily.
"A simple marine notice to be issued by NIMASA will stop violation of Cabotage…..”…His Royal Majesty Chijioke Egwuagu Collins
Do you think Cabotage can be successful in Nigeria, do you think it can make any difference?
If Cabotage can be fully implemented, the maritime sector can receive a minimum of $40 billion. Now there are three phases, Lighterage is the first to start with and that is what we want to achieve. All petroleum import into Nigeria including gas and hydrocarbon must berth at NPA designated area which includes ship to ship areas. But for the last four to six years, ships with petroleum products coming into Nigeria don't berth at Nigerian waters, they don't come into Nigerian waters and transshipment are not done within NPA-designated points. The local ship owners are cut off from transshipment of over 1.8 billion litres every month. And in terms of disposable income of this trade alone, if cabotage is implemented considering downstream, we are looking at N5 billion every month and in a year it is N60billion. Now when you go upstream, we have the IOCs carrying out exploitation which include crude oil exploration and exploitation for upstream operations; all the marine companies operating upstream today have over 900 equipment in various size and shapes working. If cabotage is implemented those vessels and job opportunities are for Nigerians 100%, but today we are still spectators. What we get in that sector are billions of dollars annually. I am not guessing about it ; we can recover a minimum of $40billion in the maritime sector.
Do you think we have to beg NIMASA before this can be enforced?
The law has been on since 2003 and it is 12 years down the line and it has never been implemented and we are begging for years now and we hope that the government will do the needful in actually ensuring that cabotage is implemented and that is the first step to unlocking the vast opportunities in the maritime sector.
What do you think is responsible for the negligence of cabotage implementation?
It is all about the corruption. It is corruption in the sense that this cargo (petroleum products) that we import is actually Nigerian money that we used to import them. We have needs for these cargoes and what NNPC does is that they give the orders and back the orders up with payment instrument, so technically these products are ours and it’s like buying products from all over the world; importing cargoes. Now, there is a cartel in place and instead of these cargoes coming in and berthing in our designated STS and trans shipment areas, you see them stopping in Lome and Cotonou where they will anchor; therefore cutting us off completely. NIMASA doesn't get anything, NPA doesn't get anything, ship owners are cut off and at the end, these products come into the country because they are all Nigeria-bound.
How do they beat the system by coming to the tank farms in Apapa?
I can explain to you how. If you go to Lome or Cotonou where the ships come and drop their product; they load cargoes from Rotterdam and at the point of loading when you ask them where they are going, they will say Lagos, they load them, the customs come on board and put a seal on the cargo and by international law, you are not supposed to break that seal until you get to your destination port and on their way they will break the law. Normally, whenever you load product from Russia or Venezuela to Lagos, the customs seal must not be tampered with, but they break such rules before getting to West Africa, they beat the government of Lome or Cotonou because they will not benefit anything out of trade and they drop their anchor there because nobody comes to them, nobody questions them what they come with. Right there, they will use the same ship that brought the cargoes to give smaller ships and sister ships of those they know to lighten the cargoes with about 15 to 20 ,000 litres, so at every point in time when you get there you have clusters of ships in about 200 to 300 ships at every point in time. This trade belong to Nigerians and once cabotage is implemented it will be a very simple process because with a simple marine notice to be issued by NIMASA stating clearly that henceforth all cargoes bound for Nigeria must get to Nigeria; and without it getting to NPA designated points it will not be allowed to come in will make cabotage a success and it is as simple as that. A simply marine notice will do, because there is no refinery in all these areas, there is no refinery in Lome and others; they cannot claim to be the source of origin and the port of origin of the cargo is important. This will go a long way to address a lot of negative issues. What do I mean by this; when a ship leaves a load port they know they are coming to any port for inspection , different things can come in and these cluster of ships can now go by the rule which is clear by dropping anchor at any STS area and the cluster ships will bring employment and opportunity which belong to us then local ship owners will have the right to trans ship these products. If you are doing 1.8billion litres a month trans shipment then you are talking in essence of N5billion disposable income every month.
Is there no way Nigeria, Benin and Togo can collaborate on this issue, because there is no way other countries would allow such illegalities to happen on their waters
The government of Nigeria arranged a committee in the past headed by one Engineer Oliver Ogbuagu and they went as far as Togo and Cotonou government stressing the need for them to come to our aid because we are not getting anything from this exercise and whatsoever, because when these ships come and go to their ports even the government of these country don't make a dollar from the trade. It is only for Nigerians to stand up because all the cargoes are Nigeria-bound and when you look at the bill of lading of those ships, it is saying Nigeria but they don't get to their destination.
Is there no way IMO can intervene in this?
IMO knows that it’s against the rule, once a marine notice can go they will definitely copy IMO and others because they know it’s wrong and once IMO is copied, they call all other ship owners to order. They cannot do it elsewhere.
What is your perception of the 2015 NIMAREX as a former chairman planning committee of the expo?
We wouldn't want to talk much about that because I only hope that they will do a good job and I am looking forward to seeing a better organised NIMAREX 2015 but beyond all these; like I will always want to say, the opportunity in this sector is so enormous that most of us want to start seeing these opportunities by tapping the benefits. As an annual event, it is a platform for better things to come as regards the maritime industry.
What is your view about the NIMASA detective on single hull vessels?
They have given us an extension. The foreign operators are not actually supposed to participate in our waters if cabotage is implemented for the sake indigenous participation. I will not tell you if the foreigners are participating in the business but what I can say is tanker vessels are not that type of vessels where you can give waivers.
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