· As Experts Decry Infrastructure Deficit, Drum Support For Shipping Development
Experts in the maritime industry have decried the myriad of infrastructural deficits stalling the growth and development of the shipping in Nigeria. This is even as they called on the government and all stakeholders to galvanise support for the development of shipping in Nigeria.
While delivering the lead paper at the 5th edition of the Taiwo Afolabi Annual Maritime (TAAM) Conference at the University of Lagos (UNILAG) on Friday, a former Director General of Nigerian Maritime Administration and Safety Agency (NIMASA), Barr. Temisan Omatseye described the administration of the war risk premiums in shipping as the biggest fraud in the world.
Omatseye who is also the pioneer President of African Shipowners Association, revealed that as at 2010, Nigeria was paying about $ 400 million annually for this insurance, but there were no recorded claims to validate the insurance premium.
He added that people just sit in Lloyd’s of London and the Joint War Risk Committee to collect these monies, yet the rates levied on Nigeria was about four times the rates charged on vessels going to the war-torn Afghanistan in 2010 when he was still in office.
The former NIMASA DG encouraged the setting up of ship repair and building infrastructure, stressing that such places should be declared as Free Trade Zones (FTZ) while at the same time create incentives of Original Equipment Manufacturers (OEM) to set up shop within these shipbuilding free trade zones.
He also maintained that the nation should work towards the completion of the Ajaokuta steel complex, while at the same time provide support for the rolling mills and machine tools industry to fabricate needed spare parts for the shipping industry.
In his words: “War Risk Premium is the biggest fraud in the world. It is not only fraudulent and criminal in nature. When I was the Director General of NIMASA, the leadership of NLNG approached me to complain about this war risk premium because it was too high. At that time, Nigeria was paying about $400million annually for this insurance but there were no recorded claims to validate this insurance premium.”
“People just sit in Lloyd’s of London and the Joint War Risk Committee to collect these monies. Yet, at that time the rates levied on Nigeria was about 4 times the rates charged on vessels going to the war-torn Afghanistan. War Risk Insurance is an invisible charge that is built into the cost of shipping as all imported goods have to pay for this premium
“Nigeria should be making policies for the training of manpower for the shipping industries such as officers, able seamen, etc by also making the remittances of seamen tax free. We should have policies in place for welders with international certification to be trained in Nigeria” Omatseye noted.
Also speaking at the conference, the Secretary General of African Shipowners Association, Ms Funmi Folorunso noted that although Nigeria has ships, the available vessels in the nation aren’t the required specification needed for the available trade.
Folorunso, however, expressed regret that ship owners in Nigeria have placed so much anticipation on the Cabotage Vessel Finance Fund (CVFF), stressing that there is more funding outside the country.
“We have ships, but the ships we have aren’t the ships we need in 2023. There is a report on the number of vessels required in Africa with emphasis on the kinds of vessels. We should be working with this vital information as we go about ship acquisition.
“The CVFF isn’t required for ship acquisition. There is more funding out there. We must set an agenda for the next government. We must set an agenda for the government to work at it. Nigeria doesn’t have a fleet development agenda; but we can begin to work on this agenda. We should have veterans from the past like the esteemed former NIMASA Director General, Omatseye, the present (current NIMASA leadership and present stakeholders) and the future (young operators and students),” Folorunsho posited.
On his part, the Principal Counsel, Akabogu and Associates and Convener of Nigerian International Maritime Summit (NIMS), Dr. Emeka Akabogu lamented that the nation’s maritime sector suffers from gross neglect of salient issues by regulators.
Akabogu argued that there is no valid reason for the prolonged non-disbursement of the CVFF by the government, even as he wondered why the Maritime Fund captured in the NIMASA Act for the development of the sector hasn’t been utilized with the agency focused on humanitarian activities as Corporate Social Responsibility (CSR) projects.
“The broad maritime industry is founded on hard and soft infrastructure. Hard infrastructure with regards to the ports, ships, access roads to ports and cargo. Soft infrastructure with regards to policy implementation and facilitation of cargo.
If we put all these together within the context of the contribution to the maritime industry, these are indicators and the performance of all these indicators that we would use to determine if we indeed have measurable strides.
“From the port’s point of view, the only significant measurable strides has been the concession if the ports to private terminal operators in 2006. Private sector operators like SIFAX have significantly contributed to the development of the Nigerian maritime space. But beyond that the component which need to be facilitated by the government again like the port, common user area, quay sides are experiencing less support. We have port like the Calabar port which has so much potential but government have refused to dredge the channel.
“We have the Nigerian maritime administration agency responsible for the implementation of Cabotage. Cabotage came with a lot of hope but it has been a huge failure. This is because what should be of advantage to Nigerians has clearly not been implemented. We have a situation where Nigerian shipowners invested in ships because they believe in Cabotage but however, faced disappointment of government not implementing Cabotage measures which has resulted in foreign shipowners competing in our domain.
“We have a situation where Cabotage Vessel Financing Fund which has been accumulating by shipowners since 2004 to date has not been disbursed for ones.
It is disgraceful and there is no explanation which can be justified to accept whatever justification that have need said. It is in view of these things that it is difficult to determine what can be justified as measurable strides for the development of the industry.
“The Merchant Shipping Act, NIMASA Act as it is, is a highly useful instrument, what it needs is implementation. NIMASA Act makes provision for maritime fund which is 25 per cent of the income that NIMASA generates. That maritime fund should go to the development of Nigerian maritime space across board and this is separate from the CVFF in the Cabotage Act which should go exclusively for the development of ship owning capacity. What is being done by NIMASA with this 25 per cent maritime fund within the context of the law?
“Today, we have NIMASA significantly investing in projects which should be undertaken by humanitarian agencies, we have NIMASA investing in projects which are of non-optimal import for the industry and not investing in those project which are of long term sustainable value to the Nigerian maritime industry.
“The freight forwarders association have done a lot of disservice to the Nigerian maritime industry as a result of continued backlash among themselves, they also need to adopt technology. So we need to ensure the single window system comes into the port system” Akabogu lamented.
Also, Mrs Eunice Ezeoke, the President, Women’s International Shipping & Trading Association, said for sustainable shipping, Nigeria must develop its human capital, and build and develop infrastructure such as the deep seaport.
“In acquiring vessels, it should not be sought outside, Nigeria has all the materials needed to construct the vessels, what we lack is the political will to push it forward.
“There is a need to look inward and start developing what we have, sensitise the young ones on opportunities in the industry,” she said.
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