The Nigerian Shipowners Association (NISA) has said that the reasons Nigerian tanker vessels do not stay on Nigerian waters to receive products is due to a government circular banning foreign exchange for such transactions.
Newly-elected chairman of NISA; Capt. Dada Labinjo in a recent chat with Shipping Position Daily said that Nigerian government has unwittingly pushed tanker shipping away from Nigeria to Togo and Cotonou waters.
The Nigerian Shipowners Association (NISA) has said that the reasons Nigerian tanker vessels do not stay on Nigerian waters to receive products is due to a government circular banning foreign exchange for such transactions.
Newly-elected chairman of NISA; Capt. Dada Labinjo in a recent chat with Shipping Position Daily said that Nigerian government has unwittingly pushed tanker shipping away from Nigeria to Togo and Cotonou waters.
Labinjo said that the genesis of the issue was in 1994 when government through the Central Bank of Nigeria (CBN) issued a circular stating categorically that ships loading products from offshore Lagos should not be paid in foreign currencies.
"Before now, when tankers bring oil to Nigeria they bring it straight to Lagos or to Calabar or to Port Harcourt and from there we do the literage or distribution, however, sometimes in 1994, the CBN changed the foreign exchange policy of the government that you cannot collect dollars for goods that are sold in Lagos because the Bill of Laden will read offshore Lagos"
"The owner of the cargo will go to central bank to demand foreign exchange, but the CBN will not give foreign exchange for a cargo you bought in Lagos, so they came out with a memo that if you want payment done in foreign exchange, then it has to be outside Nigeria" he explained.
The NISA chair explained that, by moving away 60 nautical miles from Lagos to Lome and Cotonou waters, they are now entitled to foreign exchange.
He however noted that this has created an imaginary refinery in offshore Cotonou where tankers laden with petroleum products will go and anchor, so that other tanker vessels will now come to transact business. The essence of this according to Labinjo is to make sure that the Bill of Laden will read offshore Cotonou or Lome to enable them collect money in US dollars.
"As a result of this, tanker vessels laden with petroleum products remain outside Nigeria so that cargo owners can collect their money in foreign exchange", he explained.
Labinjo however stated that ship owners have been engaging the government on the effect of the circular, saying that there is a need to withdraw the circular because it is killing the $10million Nigerian Cabotage trade.
According to him, the chandelling benefits attached to vessels coming to Nigerian waters is being lost to foreigners as a result of the policy.
"The ships going to do this business in Cotonou or Togo will require fenders, water, bunkers, food and other technical equipment, they will not be able to get these from Nigeria they will have to buy from Togo or Cotonou"
"In addition to the difficulty we now experience with our vessel, the discrimination, our inability to hold on to the mother vessel, if they short-change you, you cannot run to a Nigerian court to arrest the vessel that bridge the terms of your contract"
"We have lost jurisdiction of our court because if there is a problem between the cargo owner and the buyer" he said
He however assured that all the issues will be brought to government's understanding.
Discussion about this post