“CABOTAGE HASN’T DONE VERY WELL, I’M NOT QUITE SATISFIED”
This Interview Was First Published In Our Volume 3, 34th Edition Of July 5th 2010.
Even though he was suspended last week after weeks of intense in-fighting between him and the board over allegations of unwholesome practices, Mr Temisan Omatseye should be quite happy that the industry which he served and the agency which he led for a little over one year love him. They, not only spoke in his favour when it mattered most, they also openly wished that it never happened. Even as he goes on suspension to pave the way for EFCC’s scrutiny , their wishes are that if found to be without blame, Omatseye should be returned to his office as DG, NIMASA. Not privy to his defences, we presume that he is innocent until proven otherwise.
We reproduce here under, an interview which he granted us in late June, but which we published in early July 2010. This will offer an insight (once again) into the mind of the suspended DG.
How can Nigeria boost her maritime trade?
Sincerely speaking, if you look at the shipping industry, an economy like ours which has a lot of coastline, we will take into consideration the number of seaborne business that is done in Nigeria. The level of facility in the maritime sector in Nigeria should be a lot more than what we are experiencing today, I believe like you said that the issue is an issue of lack of information to the teaming youths on the opportunities that are available in the maritime industry, you must also realize that the maritime industry is a capital intensive industry and therefore require a lot of capital inputs and a lot of funding and these are not very available. Now, we also face another challenge, our banks in Nigeria are banks that really are ( with all due respect and I stand to be corrected), banks that are short-sighted in their area of financing, they are more interested in letters of credit, short term financing, quick turn- over and nobody is looking at long term funding and that is why you find out that we have a terrible situation in our mortgage industry and this has also translated naturally to the shipping industry because you can not buy a vessel and expect to pay for it in one year or two years, the vessel is an asset which is going to be there for 20 to 25 years. So the financing you should do for a vessel should be similar to a mortgage financing. In Nigeria also you have banks that are giving interest rate of 15 to 20 percent per annum and by the time you do ten years re-payment, even if it’s just ten years you will have paid 150 percent of the amount you borrowed, so you would have paid double or over and above the amount you borrowed. If you look at the United Kingdom and the USA, right now they have their maritime development bank in their countries and these are banks that are giving out money at almost two percent interest rate, by the time you finish payment, you have paid a maximum of 20 percent. In the American maritime bank, they give out money for almost 25years because they know the live span of the vessel, so even if we as an agency are able to embark on a shipping development programme, we still need people to borrow and I think what is killing Nigerians is the inability to source the kind of money that is required for them to fund the acquisition of vessels. Apart from that, we have some unemployed persons, if you go to Philippines, they have a population of about 85million and have between 40 and 50; if not more, maritime academies, that is why right now over 25 percent of seafarers around the world are Philippinos. We have a population of about 140million Nigerians and guess what; we only have one maritime academy, so there are differences and opportunities in the issues as they relate to maritime. I believe that we on our side can bring food to the table by telling Nigerians what the maritime sector requires, but we can not force anybody to eat it, that is our challenge, what we are trying to do is to do capacity building, train Nigerians, bring the issue of maritime to the fore front, 90 per cent of our seaborne trade are brought in by vessels that are not Nigerian. I will give you a statistics which I will keep repeating; we export almost 2.5million barrels of crude oil per day and 0% of it is carried by Nigerian flagged vessels, we import a million tones of rice per year and not one grain of that is carried on Nigerian vessels, we are the 4th largest LNG producing country in the world, but none of that is carried by Nigerian flagged vessels, so I will continue to repeat this because it seems this is what will sink into the minds of Nigerians and let them know that its time for us to wake up from our slumber and begin to do something productive. So, capacity building like you said is trade, we can talk from here till our voice go hoarse, but it is up to Nigerians to take up the challenge.
To what extent has NIMASA used the CVFF to assist indigenous ship owners?
CVFF like you said is the fund for the Cabotage vessel financing, I think we are the only administration that has gone further as it relates to CVFF, we came in here with a funny mindset, we came in meeting this issue of ship acquisition fund which became like a national cake, people collected the money and nobody paid back, we are still having challenges trying to get them to pay back and as a matter of fact, it is a major issue. I have always said that the CVFF is not a national cake, but before we came in there where self regulations on how CVFF is to be disbursed, I can tell you right now that we have done most of that in the sense that we have picked the primary lending institutions and we have also agreed on the interest rates, the board of NIMASA has approved the interest rate for CVFF, as I speak to you now, one of the papers which I received today was the list of applicants of each bank for CVFF, but I have not signed it, we have $50million in the bank, but the application can not be less than $1billion. So, how are we going to share the money that Nigerians will not come and say that you have picked your own chosen company for the facility? That is the situation I am facing, it is there on my table and its one of the things I am taking home to go and pour holy water on (laughs) that God should give me the wisdom of how to deal with it, because I have seen all the names there and how can you tell them that they can’t get it? This is the challenge that we are facing right now.
What is the interest rate?
It is about 5.7 percent, and we have about 92 altogether; 23 from Skye Bank, 23 from Equitorial Trust, 23 from Diamond and 22 from Fidelity bank.
Can’t you just give a few and forget it, since you can not give them the entire amount that they are requesting for?
Out of the number that we have, if you give just two people, the rest will shout, so where do we start from. The money is actually a $100million because NIMASA is bringing 50 per cent, the banks are bring 35per cent, the borrower is bring 15per cent, so if we take our $50million and their own contributions, then it actually comes to $100million. Helping to purchase just two vessels does not help me as the DG NIMASA; we need a lot more than that. So what I am trying to do is to see how I can take the banks out of play, how can I make the current efforts to be a private sector driven thing and the only way to do that is to create the businesses. Let us say for instance we have a lot of products coming in, how can I make sure that only Nigerian vessels can do the lighterage because we are facing a problems right now, there is a conspiracy between international importers and the local flagged vessels where they exclude Nigerian flagged vessels from doing business. So what we are trying to say now is why don’t we do it that only Nigerian flagged vessels can do it, with NNPC protection for products we can actually have a cash flow business for Nigerians which banks can now use as a basis for repayment of the loan, we have to change our mindset of thinking and that is what we are trying to do, it is not easy because it is like a one man riot squad.
How far have you gone with your desire to help indigenous ship owners to access offshore funding?
We have accessed $200million and it is available to Nigerian ship owners right now but you know that as an agency we can not go ahead and support this kind of money without the approval of the necessary authourities, so we are in the process of seeking approval. Mark you, the arrangement does not involve any guarantee from NIMASA, the fund is going to be a pool of money which will join the maritime infrastructure fund development money, we are also asking government for some additional money to help us out and we are hoping that when that response is positive, we will come back and tell you. CVFF is a local indigenous capacity building, we have to think international, even with all the seafarers training that we have, if there is no international flag vessel the seafarers can not get their certificate of competency, you can only get it by sailing on international vessels, you can get a local one, but that’s the end of it, now how can we send our seafarers to international vessels, how do we bring back things like the international carrier so that we can take our cadets from the maritime academy and place them on these vessels like what LNG is doing right now and begin to develop them. Look at what Arik Airline and Virgin Nigeria are doing; they brought aircrafts and employed expatriates, but they put Nigerians there to be trained as pilots, which is what we need to do as Nigerians. I am believing that some positive changes are going to happen this year. As a matter of fact, that is why we have ISAN here today to meet with me, because I need to learn a bit more of what have been the problem, why have we not been able to carry Nigerian crude, what has been the excuses of NNPC, so that it can be my burden and let me take it. Shehu Ladan (former NNPC, GMD) promised us that he is going to support us, but now he is no longer there, so the game starts all over again and I have not been able to penetrate the new man. So now I am going to meet directly with the minister and see how we can take it from there.
How do you intend to take advantage of the Local Content Act for the enhancement of Cabotage?
The local content Act says anything that relates to shipping is to be handled by NIMASA. We have a committee in-house that is trying to tie- in everything, Cabotage is local content and we are already developing that, but what we have now is a legal standing which we can use to impose on all the oil companies, but the oil companies are really now coming up.
What are you doing in your own time to ensure that we have more than one maritime academy?
The issue of maritime academy is not my responsibility; there is a Maritime Academy of Nigeria which has its premier campus at Oron, they (naturally) are supposed to have additional campuses because the Academy can sit in council and say okay we want to set up satellite campuses of maritime academies in other locations, it is their responsibility. The problem I am having right now is that Cabotage does not only have to do with vessel acquisition, it has to also do with capacity building, what if we have all the vessels and we don’t have crewing? It means we are back to square one, so what we are doing now is that we have plan for the committee to identify other locations for other maritime academies in Nigeria. Interestingly Yaba College of Technology has started a school to train officers and cadets, we have two of NIMASA personnel on the advisory committee of that institution, slowly we will identify some land but what we are doing is that we are doing the new maritime academy on a purely Public Private Partnership basis, we are already discussing with Greece, Norway and we have about four countries that have expressed interest in doing the PPP maritime academy. Look at what happened in the UK, most of the people are going to train in the UK, if you go to the Philippines most of the shipping lines are the ones that set up the maritime academies in the Philippines to train their staff unto the vessels, so why can’t we? The one we have there Maersk is part of it, so what we are trying to see now is: how do we get the time with these shipping lines to say ‘we should train these people as a feedstock for your vessels’ but you must understand that we are facing so many challenges; maritime security, maritime pollution, beached vessels and so on, but we do know that things are going to happen gradually soon.
You were reported to have spent $1.7million dollars to remove just four of the beached vessels, are we not going to need like $1billion to remove the rest?
I think you need to be mariners and appreciate what a mariner goes through, you need to watch the video of what happened at the site, really what we are doing is not our responsibility, it is the responsibility of a P&I insurance for them to be removed. The squall that happened was an Act of God which is normally covered by insurance policies and they normally pay for the salvage, but guess what, our vessels don’t have insurance and so they got stuck there, the vessels were sitting on the beach, if we had acted immediately, we would have removed most of those vessels within that amount. Don’t look at $1.7 million as the cost, you need to see the break down of the equipment that were used, the vessel sitting on the beach had been so high up into the sand that we had to dredge around it to allow water to come in, then we had to take two tug boats that were chartered from Ivory Coast to tie on each end and pull the vessel while they were digging around it, it was a per day charge and not free, we needed a large tug boat to pull these vessels out, and guess what, the sea has a high tide and low tide, we went in there for 10 days when there was high tide and when the whole tide went we were finished, we could not do anything and the money they approved for us had finished and we have now reapplied. We were very careful and we got Indigenous Shipowners Association of Nigeria to give us an undertaking that they will pay, so they are going to refund us our money, whatever they give us, we will take. The whole situation now is that if we leave these vessels there, they will become a problem to the eco system. People are saying that the money is much, but if I leave these vessels there, which I can easily do and you will them sinking into the beach.
What level of business do you envisage when the on-going dredging of lower River Niger is completed?
The level of business on the inland waterways is going to be quite tremendous, you can imagine a vessel coming in with cement and discharging it somewhere like Warri and then up to River Niger and up to as far as Kogi State, then the trucks can then move it up from up to Baro in Niger state. You can imagine the pressure it’s going to remove. But, until we are able to see clearly what the programme is for the River Niger, then we can begin some sensitization on the investment ability, its going to be quite key, because after they finish dredging, we need to see the survey of the river which will determine the kind of vessels that can actually go up the River Niger and also what period of the year the River Niger will remain navigable. It’s a very noble idea, we are very optimistic about it and we are going to develop that in the near future.
What is your assessment of Cabotage implementation so far?
I said it earlier on that the best we can do is to create the environment, but you see what Nigerians want is for us to create the environment and still put the food in their mouth, I can’t put the food and still feed you and that is the problem I am facing with them, local participation is improving, I guess our Cabotage registry when we came in had nine vessels and now we have over 350 vessels on Cabotage registry. But I am not very comfortable with the quality of the vessels that we have, we need to improve on the quality of the vessels. Cabotage has not succeeded the way we would like, I am not very happy with what we are seeing, I believe it has to do with our own problem in- house as well; we don’t have enough surveyors, enforcement officers, we are not doing what really needs to be done and so there need to be a total mind set change. Sincerely speaking, NIMASA should be represented at every single port, terminals and any vessel that berths in Nigeria it should be NIMASA going out there to check the papers, we are an agency that is focused on revenue generation, enforcement and other key functions which can only be carried out at our zonal offices, that is where the money is and not at No. 4 Burma Road, here is just to focus on pure administration and let the work be done outside. That is my personal opinion, but I will get to that stage by the grace of the almighty God.
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