By Akanimo Sampson
The maritime sector of Nigeria’s economy is still not yet fully tapped by the Federal Government. Already, the Association of Marine Engineers and Surveyors (AMES) is arguing that to make the sector functions as it ought to be, a number of steps must be taken to put things right.
There are even some emerging indicators that the country could earn more than $10 billion annually from freight cost. For those who know better, freight cost refers to the cost incurred in moving goods. It includes packing, palletising, documentation and loading unloading charges, carriage costs, and marine insurance costs.
According to AMES, the first step is to implement to the letter strong suggestions and recommendations on how to re-jig the Nigerian Maritime Administration and Safety Agency (NIMASA). Secondly, that Abuja must revisit and sort out all encumberances to the country’s efforts to float a new shipping line.
Nigeria is however, located on the coastline corridors of the Gulf of Guinea and the Bight of Benin, blessed with a natural maritime endowment base comprising a coastline of over 850kms, an exclusive economic zone of over 200 nautical miles, a vast inland waterways resource estimated at nearly 4,000kms, capable of supporting a vibrant intra-regional trade.
With her total annual freight cost, estimated at between $5.00 billion and $6.00 billion annually, there is no doubt that shipping is of great importance to the country’s economy, going by NIMASA’s claim in 2018.
The maritime sector includes all enterprises engaged in the business of designing, constructing, manufacturing, acquiring, operating, supplying, repairing and/or maintaining vessels, or component parts thereof: of managing and/or operating shipping lines, stevedoring and customs brokerage services, shipyards, dry docks, marine railways, marine repair shops, shipping and freight forwarding services and similar enterprises.
Put succinctly, the sector embraces all the maritime related business activities which take place within the country’s maritime environment. These include offshore economic activities such as fishing, salvage, towage, underwater resources and on-shore economic activities such as port activities, maritime transport (shipping), ship construction, repairs and maintenance activities.
In Nigeria, the sector is mostly dominated by NIMASA, Nigerian Ports Authority (NPA), Nigerian Shipowners Association (NSA), the Nigerian Shippers Council (NSC), Ministry of Transportation, operators, finance institution and private investors.
However, AMES President, Adeyinka Okunade, was promoting the steps needed to boost the industry at a function in Benin, the Edo State capital, while answering questions on the country’s maritime sector and the way forward this 2019.
According to him, ‘’there have been strong suggestions about rejigging NIMASA. The recommendations in this direction should be strictly followed and implemented to make the maritime sector function as it ought to.’’
On the ownership of a shipping line, Okunade who led a high -powered AMES delegation to the burial of the mother of Greg Ogbeifun, an engineer, said a shipping line remains an international image booster for any maritime nation globally.
‘’Nigeria must now seriously explore all opportunities to actualize the ownership of a shipping line. “We used to have one which became liquidated. We urgently need another one. It has become imperative now more than ever before that Nigeria should float a new shipping line in place of the liquidated Nigerian National Shipping Line, NNSL.
‘’In my opinion, it is very shameful that in this time and age, Nigeria does not have a shipping line. It is not good at all. I know there are efforts in that direction already. But the efforts need to be intensified so that we have a shipping line. A shipping line portrays our name all over the world. It should not just be seen as if it is for luxury or decoration’’, he said.
Arguing, he said as a country, Nigeria has all that it takes to float this shipping line because she has her nationals as personnel all over the world. In international shipping and international classification societies all over the world, Nigerians are making their marks.
‘’The personnel are there; the manpower is there. It is just the political will to make it happen. A shipping line needs to be established to even serve as a training platform for our cadets. We cannot train our cadets on foreign platforms’’.
Recent reports however, say in the last four years, the country’s economy lost around $18 billion, which translates to N6.48 trillion at prevailing rate of N360 to a dollar, following the domination of her shipping industry by foreigners due to an absence of a national shipping line in the country.
This is different from another $3,00 billion estimated annual marine – related spending lost to foreign domination of the domestic shipping market in the oil and gas production activities.
These funds, according to reports, are freight earnings lost to foreign shipowners through lifting of Nigerian crude and lack of earnings by Nigerian seafarers. NIMASA says 95 per cent of $5.00 billion of the Nigerian crude lifted by foreign shipowners eluded the country’s economy.
With this, 95 per cent of Nigeria’s income is earned by foreigners due to foreign domination in the shipping sub-sector of the Nigerian maritime sector.
Shipping experts are arguing that as a result of the absence of a national shipping line and patronage of foreign fleet in international waters in 2014, Nigeria lost $2.2 billion. They posit that if 50 per cent out of the 5,000 ships that landed on Nigerian seaports in 2014 were Nigerian ships and managed by Nigerians, the country would have saved $2.2 billion.
Nigerian seafarers would also have been engaged to work on the fleet and would have been earning about $30,000 per month collectively. This development which is an indication of extreme capital flight, implies that foreign operators in the shipping and oil and gas industries take away over 95 per cent of the $5.00 billion generated through the shipment of petroleum products and other imports while only a paltry five per cent is retained in the country.
NIMASA Director-General, Dakuku Peterside, had several times regretted that though the oil and gas sector of the Nigerian economy accounts for over 90 per cent of the foreign exchange earnings for the country, it contributed less than 20 per cent to the gross domestic product (GDP), and less than five per cent of total employment generation in the country.
For him, ‘’the same dominance by foreigners is also extended to the domestic shipping market where the estimated $3.00 billion annual marine- related spending in the oil and gas production activities is earned virtually by these same foreign operators.
‘’This is a situation of so much activity and so much money but little impact on the lives of Nigerians which accounts for the high level of frustration and restiveness in the country especially in the oil rich Niger Delta region.’’
Speaking on the lack of a national shipping line recently, President of the Nigerian Shipowners Association (NISA), Aminu Umar, also regretted the loss incurred by the Nigerian economy following the absence of a shipping line.
According to him, the country was losing a fortune daily through freight earnings and foreign participation in auxiliary services. ‘’We are losing a lot and I have said it over that what we are losing is in billions of dollars.These are lost revenue in terms of freight but now the Cabotage Vessel Finance Fund (CVFF) is in the right direction to resuscitate the Nigerian shipping industry.
‘’I think many Nigerians stand to benefit and build bigger fleet because there are lots of losses and we have said it over and over that there are lots of earnings from cargoes coming in and out of Nigeria and these are in the range of billions of dollars and no one is participating. “They are still there and it is happening every year.’’