After several months of denials and pretentious statements, the minister of transport, Alhaji Yusuf Suleiman has at last confirmed that the federal government has granted approval to the Nigerian Maritime Administration and Safety Agency (NIMASA) to establish a new national carrier.
This is coming about 16 years after the liquidation of the nation’s first national carrier; the Nigerian National Shipping Line (NNSL). Its successor; the Nigerian Unity Line (NUL) has since died following the failed sale to multi millionaire, Femi Otedola.
After several months of denials and pretentious statements, the minister of transport, Alhaji Yusuf Suleiman has at last confirmed that the federal government has granted approval to the Nigerian Maritime Administration and Safety Agency (NIMASA) to establish a new national carrier.
This is coming about 16 years after the liquidation of the nation’s first national carrier; the Nigerian National Shipping Line (NNSL). Its successor; the Nigerian Unity Line (NUL) has since died following the failed sale to multi millionaire, Femi Otedola.
And justifying the decision to float another national carrier, the minister said that the national carrier would redress the problem of low indigenous participation in international shipping business.
Perhaps as a demonstration that there are funds available for the project, the minister had also disclosed that NIMASA has about N13 billion (or about US$106.5 million) stashed away somewhere as proceeds from the Cabotage Vessel Financing Fund (CVFF).
Although, Suleiman did not indicate that proceeds from the CVFF would be expended on the new national carrier, he, never-the-less hinted at government’s determination to use the CVFF and Cabotage to facilitate more indigenous participation in shipping, even as he however confirmed that the funds disbursement process would be under a public-private sector partnership.
“The modalities for the successful take-off of this scheme are being finalised with the constitution of an inter-agency committee,” he was quoted as saying at a media event in Abuja recently.
It is sad that since 1995, when the then-minister of transport, Major General Ibrahim Gumel (now deceased) supervised the liquidation of the NNSL, Nigeria has fallen from a nation of almost 25 publicly – owned ships to a nation that cannot boast of any national carrier.
Last year, NIMASA said that it has more than 1,286 ships on its registry, but we dare ask: how many of them are actually owned by Nigerians and what is the deadweight of each of the ships? Do we really have a national carrier?
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 business in the early 1960s 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 (especially shipping) failed 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; the phoney companies with which the funds were secured had gone into oblivion.
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 divert 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 centre 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.
It is almost seven years since the Cabotage law came into effect, but it is a known fact that it has not enhanced ship acquisition; neither has it impacted positively in the fortunes of indigenous ship owners.
It remains unclear whether the banks whose names have been mentioned in connection with the administration of CVFF are also being targeted in the move to float the new national carrier. The banks are: Fidelity Bank, Diamond Bank, Equatorial Trust Bank and Skye Bank.
It has been insinuated that the minister may have misunderstood (once again) calls from stakeholders for a new national carrier, hence the decision to want to venture into ship acquisition again.
We honestly hope that we misunderstood the minister and that the proposed national carrier will be a wholly private-sector driven outfit.
We equally strongly advocate that government should leave ship acquisition for the private sector. If two previous experiences (through NNSL and NUL) failed, there is absolutely no guarantee that a third attempt will be any better.
Granted that the CVFF isn’t much, disbursing it will assist NIMASA to regain its waning confidence in the maritime sector and among local ship owners.
It will also help to follow-up on the various inroads into the Asian shipping markets by the immediate past directors general of NIMASA and the leadership of Indigenous Ship owners Association of Nigeria (ISAN).
Rather than start a government funded process of ship acquisition, government should take advantage of the windows that have already been opened in Asia and other regions to aid vessel acquisition in Nigeria.
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