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Home » GOVERNMENT SHOULD NOT HAVE HAND IN ANOTHER NATIONAL CARRIER

GOVERNMENT SHOULD NOT HAVE HAND IN ANOTHER NATIONAL CARRIER

by Joshua
August 23, 2010
in Uncategorized

Sometime, in 2008, the Maritime Reporters Association of Nigeria (MARAN) organized a seminar in Lagos; the focus was on ship financing, with specific interest on how to stimulate renewed interests in how to improve on the nation’s indigenous bottoms.

Probably arising from the seminar and probably because the government was no longer favourably disposed to funding ship acquisition or floating a commercial shipping enterprise, the Indigenous Shipowners Association of Nigeria (ISAN) toyed with the option of floating a mega shipping company. This has remained only an idea since it was mooted about a year ago.    

Almost one year after the seminar and after a long period of silence, the  then-minister of transport, Alhaji Ibrahim Bio went ahead to drop the hint that government had given approval to the Nigerian Maritime Administration and Safely Agency (NIMASA) to float another national carrier; albeit, in partnership with the private sector.

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.

We are told that Nigeria has about 1,286 ships on 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 (or still birth) 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 a few vessels that could not stand the test of time.  None of the few ships that were bought with the SASBF loans is still sailing.

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 cautious 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 center 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 almost six years since Cabotage law came into effect, it has not enhanced ship acquisition, neither has it enhanced the fortunes of indigenous ship owners.

Our thinking is that since one of the core functions of NIMASA is improvement of Nigeria’s participation in sea borne trade, it should begin to fashion out a workable and sustainable way to boost our indigenous fleet, even if it is centred on acquisition of Cabotage vessels.

It is incumbent on the agency to carry out the mandate of improving the nation’s bottoms as given to it by the Federal Government of Nigeria through the NIMASA Act of 2007.

We agree that the banks are very relevant, but since they are still largely reluctant, it is our candid opinion that NIMASA should take this mandate more seriously by designing a format that will safe the nation the embarrassment of being a ‘shipless’ maritime nation. 

While we will not support the loud calls by some stakeholders for the government to venture into ship-owning business for the second time, we strongly advocate an urgent disbursement of the CVFF by NIMASA.

Good enough, NIMASA has appointed four commercial banks as primary lending institutions for the purpose of administering the CVFF, but reports have it that the funds available are far too insignificant to meet the need of indigenous shipowners who have waited for years.   

Notwithstanding, we strongly advocate that government should leave ship financing for the private sector. It has been said on many occasions that if two previous experiences failed, there is absolutely no guarantee that a third attempt will be any better.

 


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