Nigeria lost its position as a ship-owning nation in 1995, when the then-Minister of Transport; Major General Ibrahim Dahiru Gumel (now deceased) supervised the liquidation of the nation’s national carrier; the Nigerian National Shipping Line (NNSL).
From then, Nigeria went from a nation of almost 29 ships to a nation that can no longer boast of owning a ship that is trading on international waters. Yes, Nigeria no longer has a ship flying her flag in waters outside her waters!
In 2011, that is, after a long period of inactivity, the then-Minister of Transport; Alhaji Ibrahim Bio gave a hint that the Federal Government had given approval to the Nigerian Maritime Administration and Safely Agency (NIMASA) to float a new national carrier; albeit, in partnership with the private sector.
In 2014, the then-Director General of the Nigerian Maritime Administration and Safety Agency (NIMASA); Dr Patrick Akpobolokemi openly declared that the national carrier would be re-floated in six months.
The NIMASA boss had even gone ahead to disclose that government would achieve this by evolving a Public Private Partnership (PPP) initiative in order to avoid the pitfalls that led to the liquidation of the Nigerian National Shipping Line (NNSL).
He had told participants at the function that, the then-President; Goodluck Jonathan had tasked NIMASA to ensure that the national carrier is brought back during his regime.
That was nine and half years ago!
The minister and the NIMASA DG, both left office without achieving the objective of refloating the national carrier in 2015.
For those who have also asked questions about the current status of Nigeria as a maritime nation, the answer should start from the foray which Nigeria made into shipping and ship ownership with the birth and 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 SASBF, which was created to uplift Nigeria to a ship owning nation, sadly only succeeded in creating ship owners, who either had no ships or failed to repay the loans that were given them. Only one or two beneficiaries (out of about 15) repaid the loans that they took under the SASBF, leading to the death of the Fund.
The birth of a successor company to NNSL; in the name of Nigerian Unity Line (NUL) and its eventual death 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 was in excess of 25 bulk carriers, beneficiaries of the SASBF could only account for only one or two vessels that could not stand the test of time. None of the few ships that were bought with the SASBF sailed for up to three years.
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 are often told that Nigeria has more than 1000 ships in her registry, but we dare ask: how many of them are actually owned by Nigerians and what is the tonnage capacity of each of the ships? From findings, majority of what Nigeria currently has in her registry are coastal vessels and supply boats.
Nigeria has descended from her previous height as a key player in global shipping to nation with a near-empty ship registry.
We note that there have been some feeble attempts on the part of NIMASA to galvanize the finance sector, especially the banks to embrace ship financing. Very few banks have shown interest in funding ship acquisition. Majority of the banks prefer to fund acquisition of service boats in the oil and gas sector. Acquisition of container ships and bulk carriers is understandably out of it. Not until the Cabotage Act was enacted, 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.
Although, it has been many years since the Cabotage Act came into effect, it has not enhanced ship acquisition, neither has it enhanced the fortunes of indigenous ship owners. We had thought that since one of the core functions of NIMASA is improvement of Nigeria’s participation in sea borne trade, it should have begun to fashion out a workable and sustainable way to boost our indigenous fleet, even if it is centred on acquisition of Cabotage vessels.
But the lot has fallen on the shoulders of the Implementation Committee for the new National Fleet; an all-encompassing body made-up of stakeholders from both private and public sectors. It was headed by the then-Executive Secretary of the Nigerian Shippers Council; Mr Hassan Bello.
Right from the start of the committee’s assignment, Hassan Bello had explained that, what the committee was working on was not in the mode of government-owned Nigerian National Shipping Line or its successor; the Nigeria Unity Line.
“It is a private sector-driven business venture; it is going to be driven purely as a business enterprise with equities and structure totally spelt out. You can now see that it can not be a national carrier in the mode of the NNSL, it’s a totally different arrangement”, he was quoted as saying.
To give vent to the desire for a private sector-driven national fleet, Nigeria sought the partnership of Singapore, and a leading shipping line; Pacific International Lines (PIL) came on board. A Memorandum of Understanding (MOU) was signed by Nigeria’s Minister of Transportation; Mr Rotimi Amaechi and the Managing Director of Pacific International Lines; Mr Teo Siong Seng.
The equity is supposed to be in the ratio of 60:40, for Nigeria and PIL respectively, with Nigerian businessmen providing the finance, while PIL provides the ships.
The MOU which covered establishment of a Nigerian national fleet for dry cargoes, crude oil carriers and offshore supply vessels, was signed in August 2016. Sadly, about seven years down the line, the dream appears dead. Or so we thought until the new minister of Marine and Blue Economy; Mr Adegboyega Oyetola dropped the hint of a return to the model which the Hassan Bello-led Committee had recommended.
So, what went wrong and why was it that the MoU could not be actualized since 2016, with successive Ministers passing the buck.
We are tempted to blame the immediate past Minister of Transportation; Mr Rotimi Amaechi for signing an agreement that was bound to fail; from day one?
Before he left office, he had blamed the failure on the inability of the supposed Nigerian financiers to meet the equity requirements.
If indeed, the MoU is to “establish a private sector driven Nigerian National Fleet to fly Nigerian flags Container/Dry Cargo Vessels, Crude Oil Tankers and offshore Supply Vessels (OSVs) to operate in the International, African and Nigerian Cabotage Waters, are these conditions difficult to meet?
Amaechi’s successor; Mu’azu Sambo did not do anything to give hope to the dream of a national fleet.
He practically dumped the report of the committee which was submitted to him. This is understandable because he had a very short time in the ministry.
Twice, the new minster had given hint that government was considering a national fleet through a public-private-partnership arrangement. He says that such a plan would be achieved in the interest of the maritime industry and the country.
Oyetola said that the aim is to secure a substantial share of the estimated $10 billion annual ship charter market within the country. He reassured stakeholders that the revival would not hinder local players’ growth, but provide opportunities for them to enhance value through ship construction, maintenance, and repairs, aligning with the Cabotage Act granting Nigerians exclusive control over locally generated seaborne trade.
While we have nothing against the minister’s intention, we are however not too enthusiastic about it. We dare state that this is a familiar route, and until we see concrete moves that are aimed at achieving this, our skepticism remains heightened.
If indeed the Minster is desirous of making Nigeria a ship owning nation once again, the best way to start is to call for the report of the Hassan Bello committee. In that report, he will find all that he needs to know about the Strength, Weakness, Opportunities and Threat of the nation’s aspiration.
Finally, the technocrats will always advise that a national fleet is a necessity. Yes, the advantages are enormous, but we advise that, if indeed Nigerian is desirous of a national fleet, it must be an entirely private sector-driven venture. But, how will the private muster the funds, especially in an economy that is distressed as ours.
We still insist that the PPP arrangement that was envisioned by the Hassan Bello committee is the best option that Nigeria has at the moment. The private sector only needs to be encouraged and assured that there would be no policy shift, even if there is change of power between political parties in years to come. This is important because private sector investments must be recouped.