“The CVFF Does Not Say You Have To Be A Contributor Before You Can Benefit From It” — Omatseye

 

Barrister Temisan Omatseye is a former Director General of the Nigerian Maritime Administration and Safety Agency (NIMASA). In this interview, he speaks extensively on some challenges in the sector and the way forward.  

 
 
“The structure for the disbursement of CVFF doesn’t align very well with banking guidelines”  

 
 

What have you been up to since you left NIMASA as the DG?

Well, since my leaving NIMASA, I think I left NIMASA in December 2010 and since that day that I have left NIMASA, I had my court case for six and half years trying to clear my name and everything and which by the grace of God, it was done on the 11th of May 2017.  And after that time, I have basically been doing more of consulting work; so I have been doing more of legal work and advising people in the maritime sector.

 
What do you think has been delaying the disbursement of the CVFF and what is the way forward?

Basically, I think the most important thing is that when you look at the Act, it is very clear it states that there should be a fund, the Coastal and Inland Shipping Act said that there should be a fund called, Cabotage Vessel Financing Fund (CVFF) and it is to be disbursed in line with the guideline as issued by the Minister of Transport and the guidelines was actually released in 2006 and by the virtue of that guideline, the funds need to be disbursed. But I think the challenge is that the structure which the disbursement is to be, it said that people can draw 50% of the fund and the bank is to provide 30% and you’re to provide 15% and something like that. But the challenge remains that the way in which the fund is to be disbursed doesn’t align very well with the banking guidelines. But, I think there are other means by which the fund can be disbursed. I think the guidelines still remain the main issue, the money is there but the structure. I have been proposing that the fund should be disbursed in a different manner, I believe what should happen is that if you are a real ship owner it is not the money you are looking for, you are actually looking for the assets. 

And now we are in a good position to buy new vessels which will meet the global emissions of 0.5 Sulphur or we can even buy vessels that can be running on LNG; which is the way forward for the nation, so we are very well position the type of new vessels that we buy should be able to meet the international standard and train our seafarers. That is what I think we should do and the government will now have control over the assets so they are not afraid and then the ship owners can have the vessels they require to do their jobs, so long as money is being paid and the vessels are running, you will make your profit and if you are not performing they take the vessels back; either they give it to somebody else or they do whatever they like to it.
 
 

What do you think would be the cost implication of the global emission of 0.5 Sulphur in Nigeria?

Well, it should not have any cost implication in Nigeria, because Nigeria still has a crude oil that has 0.5 Sulphur, the country has the best crude oil with the best emission, but unfortunately the challenge we face in Nigeria is that we are exporting our crude oil and importing petroleum products. So the products we are importing are crude oil produce, so you find out that the bunkers or whatever we are bringing in here has higher Sulphur, because we are not using ours but we are selling our crude to other people who are using it to produce the 0.5 % Sulphur. If our refineries are working, Nigeria will be 100% compliant and it will not really change the price in any way because we already have crude oil. But, like I said I think Nigeria has not positioned herself very well, Nigeria should have positioned herself very well in the IMO to provide all the bunkers and all the crude oil required because the Nigerian crude oil is sweet and it is also below the 0.5% Sulphur requirement. So that is the thing, but I still feel that as time goes on, all these are just stories because I believe that as the shipping industry is growing; even though they will be giving to us more of gas and that is why I want us as Nigerians to position ourselves because we have the gas, the NLG and everything. There is no need for this refinery thing, we can rely on NLG supply, build more NLG plants and we begin to feed the shipping industry because the industry is moving towards the NLG.
 
 

Do you think a certain percentage of the CVFF should be giving to barge operators?

They cannot even call for some percentage to be given to them in the first place, when the money itself cannot even be disbursed in the first place. But there are two monies which are available and I think that is where we are losing it, the CVFF is Cabotage Vessel Financing Fund(CVFF). But, really if you look at it, the Tug Boats and Barge Operators should fall under Cabotage because they are actually Cabotage operations and Cabotage operations is that once the international shipping is over, the Cabotage operations comes into effect. Whether they are part of the contributors is irrelevant, if you meet the criteria it is not about who contributes, it’s about meeting the criteria. The CVFF does not say you have to be a contributor before you can benefit from it, you cannot change the goal post. There are people who have been contributing to CVFF for a long time and now if the man is out of business does that means the person cannot get any benefit out of it, you cannot exclude people like that. In my own thin king, I feel what they should be doing in the shipping industry, the ministry or NIMASA is that there is a fund called the maritime fund, which they can use to develop infrastructure. That infrastructure should be used for either developing or setting up small yards. Many people are building badges, so let NIMASA certify the people building badges and small tug boats and train the welders who are going to do that, it is capacity building. And when they begin to build those badges, guess what, with that we are no longer borrowing Dollars, we are getting the banks to provide money because it is a local content; we are building the badges here, the only thing we are importing is steel. So my thinking is that what they should do is to take that maritime fund, 25% of NIMASA’s revenue goes to that maritime fund and it is supposed to be used for the development of infrastructure in the industry. And first, infrastructure is to develop small ship yards; don’t build big ship yards; you have to train the welders, nautical engineers and all that. So there are lots of capacity buildings, you can start with that. Now you are training seafarers, but you don’t have the ships to put the seafarers, but when you train the welders at least those seafarers you re training can start as quarter masters or small captains and begin to get their sea time to build up.
 
 

The Gulf of Guinea is still top in the area of pirate attacks, as an expert, what do you think is the way forward?

Piracy is not from the sea; it is from the land, so it is the failure from the land that led to pirate attacks on the sea. So, first of all whatever structure that needs to happen has to start from the land. Whatever NIMASA is doing is basically fire brigade approach, the guys have left the land and you are trying to stop them. So I think what should happen is that intelligence should start from the land, you need to capture the people who are doing the thing on the land before it goes to the sea. The issue of piracy, yes it is basically based on the effect of our economy; people are not having anything to do, so they are going on the high sea to be doing all these things. Yes, the level of piracy has greatly increased because the pirates are not spirits, they are coming from somewhere and someone knows them, they have wives and children. So there has to be a combination; NIMASA cannot just focus squarely on the waters and provide assets and whatever, also they have to work with the DSS and the Marine police so that they can share intelligence so that when they know who this person is, as the person is going NIMASA can be better engaged. Yes, we need to have a satellite coverage which will basically give us an oversight view of our maritime domain. But in the interim, I think what needs to happen is for Nigeria to set up a corridor maybe a 100kilometer long and 50kilometer wide, because you cannot do all the 84,000square nautical miles at the same time, if you have your satellite, it will cover it but physically covering those miles is near impossible. What you can do is to create those corridors where a vessel can come into and within that corridor if there is any issue of attack or whatever, the response time by agencies like NIMASA, Navy will be faster than what they have now where they have the whole place open, they don’t know where you are and you are calling for help and it is taking them 10 hours to respond. 
 
 

Post Covid-19 lockdown, which areas do you think the government can improve on?

Going forward the government knows that as a matter of fact on the issue of shipping we are at grand zero and I believe that the Covid-19 is an opportunity. I keep complaining that the CBN Governor keeps talking on the issue of N3trillion he wants to inject into the economy, but nowhere did he mention the issue of logistics in the shipping industry. And he fails to realize that the amount of money which Nigeria pays in shipping just to carry our crude alone and on bringing in imported petroleum products and moving of cargoes, amongst others are the major areas of the economy, but because he does not see the money and the money is actually leaving the economy. But whereas if he had invested the money in infrastructure, yes you put the money in there, but guess what, when the oil companies are paying they are not paying to someone outside the country, they are paying to someone here and the money is retained in the Nigerian economy, he doesn’t see that. He doesn’t realize that in all operations that happens whether it is agriculture or anything, 60% of that comes from logistics and Nigeria is not focusing on logistics; we need to go back and focus on logistics. He (CBN Governor) is giving money to the aviation sector, how many people does the aviation sector carry, 95% of all goods moved in the whole world is carried by vessels and he is not even looking at that. Look at Apapa, it is shut down and they don’t see Apapa as important to the economy, but they don’t realize how much they are losing, the CBN governor should go there. Export goods are rotting on the roads there, because they cannot go to the ports everybody is coming to Lagos, why have we failed to develop other ports, because international shipping companies are afraid to go there because of pirates. So let’s focus on providing security in those areas so that vessels can go into those areas; so that the cost of goods will be reduced. Why someone should be producing in Calabar and then transporting his goods with like N500, 000 to Lagos for exports. So we should wake up Calabar and other ports, so that vessels can be going there. In Nigeria we only have river ports, we should be able to be thinking of how to push cargoes to those areas. Most of the industries should be able to produce in those areas; but guess what, they have to move those goods to Lagos for export, that should not be the case.