‘Maritime sector can create thousands of jobs if govt enforces Local Content and Cabotage laws’
Domination of over 75 percent of Nigerian shipping business by foreign players has taken jobs off the hands of the indigenous counterpart, which has led to shutting-down of many shipping companies in Nigeria. Adedoyin Ayorinde a shipowner and chairman of the Nigerian Maritime Expo (NIMAREX) 2015 planning committee, in this interview with UZOAMAKA ANAGOR, believes the upcoming expo holds the key to opening opportunities for indigenous operators .
Problem of maritime sector
The major problem facing the Nigerian maritime sector has to do with recognition or the nonchalant attitude of government towards the development of the sector. We have been talking to government through letters and communiqué on things that can be done to tap into the opportunities in the sector. We are not meant to beg the government rather the onus lies on us to advise them on the best approach to address problems.
Maritime sector is the heartbeat of Nigerian economy because 90 percent of goods all over the world are moved by sea and for an import dependant nation like Nigeria, 70 percent of goods for domestic and industrial consumption are imported by sea including crude oil, which is the mainstay of the nation’s economy.
Therefore, the Muhammadu Buhari-led administration cannot afford to overlook the maritime sector. For instance, there are so many things that we are doing in Nigeria that is costing us so much and ship owners are crying for lack of jobs. Currently, all the Ship-to-Ship transfer (STS) done on imported petroleum products that are coming into Nigeria to be used in Nigeria are not discharged on Nigerian waters rather they are discharged in Lome and Cotonu waters. This is why all shipping companies that are into STS in Nigeria have all closed shops while we create automatic jobs for ship owners in Benin Republic and Togo, and it is one area, where the economy is losing huge revenue.
For this government to create jobs in the maritime sector, they need to make it compulsory for every mother-vessel bringing products into Nigeria to discharge on Nigerian waters. This will bring quick turnaround in the economy because thousands of jobs would be created and the ripple effect will help in reviving most of the dead shipping companies.
So, what we are doing in the NIMAREX is to create an avenue where people can discuss about the problems in the sector, so that even if the government are not going to recognise us, we talk about ourselves and find solutions to the problems facing the sector.
Impact of local content law
Recently, Nigerians were giving the lifting right in the oil and gas sector, which is not for them to lift crude oil but to market the product in the international market because Nigerian crude is sold on freight-on-board (FoB). This means that the buyer is free to bring vessel of choice to load the crude. Nigeria is a country that has good laws such as Local Content and Cabotage but we always leave a whole for people to exploit these laws. We are also not enforcing these laws and that is why jobs are not being created in the shipping sector. The maritime sector can create thousands of jobs only if the government enforce these laws.
The new government can look into this direction and put an end to waivers that are granted to foreign ship owners at the expense of indigenous operators. As a ship owner, my company has about four vessels that are currently lying idle without jobs becuase foreign vessels get all the contracts. However, I think that Nigerians are beginning to see the impact of the Local Content law but not as it should be because if the foreigners are doing 75 percent of the jobs and we are doing 25 percent, it means that we are not doing anything. We need to put the policies aright and restructure our bidding processes, which currently takes over a year and half to mature.
Capital flight
The report of a ministerial a committee set-up by the federal government in 2011 reveals that 90 percent of Nigerian generated trade are moved by sea without indigenous participation in it and the capital flight of this was estimated at N1.5 trillion annually. In addition, this trade accounts for 76 percent of the West African sub-regional trade, which takes place in Nigeria excluding manpower cost estimated at about N600 million annually by Nigerian Content Development Monitoring Board (NCDMB). Also, NCDMB latest report says that offshore trade in Nigeria is worth about $3.5 billion dollars annually and Nigerians are not doing $1 billion out of it. Sadly, majority of these monies are also paid offshore without Nigerian banks benefiting from it and the economy also loses a lot in tax revenue.
The committee also discovered that lack of contracts/activities/employment by Indigenous ship owners had left about 5 million Nigerian youths unemployed while the sale of Nigeria crude at FOB negates Nigeria Maritime Insurance Policy which domesticates the insurance of imports and exports. By this Nigeria is currently losing N15 billion or $101 million annually.
It was further observed that out of the 457 vessels working upstream where some vessels can earn in excess of $85,000 per day of which Nigerian ownership account for less than 10 percent, which is far less than 70 percent contained in the Local Content Act expected to be owned by Nigerians.
Role of NIMAREX
NIMAREX is a platform where all the stakeholders in the maritime sector comes together to discuss the challenges facing their businesses and try to give a clear-cut direction to government on how they can help to develop the shipping sector.
NIMAREX is not an avenue to attack anybody rather it is a platform where we discuss our problems, share ideas and work on possibilities. We have also invited the International Oil Companies to be part of this year’s expo even though they have not been coming to the expo in the pass. We will also have all the government agencies in the maritime sector in attendance because it is not about ship owners alone.
Controversy in NISA
The issue in Nigerian Shipowners Association (NISA) is one that would soon be resolved and it has nothing to do with the rescheduling of the conference date. The decision to move the date of NIMAREX from March to June can be attributed to the political situation in the country and it is very apt owing to the fact that Nigeria has entered into a new dispensation and, we will not only attract the right people but will be able to present the viewpoints of every stakeholder to the new government for effective implementation.
Intels faults Lagos high court judgement on handling of oil and gas cargoes
Intels Nigeria Limited has insisted that the ex-parte orders made by the Lagos division of the Federal High Court in the suits instituted by Ports & Terminal Operators Limited (PTOL), Nigerdock and LADOL against the Nigerian Ports Authority (NPA) are at variance with an earlier judgment delivered by the Port Harcourt division of the Court in 2014.
While reacting to insinuations to the contrary made by Liizzie Ovbude, managing director of PTOL, and published in the Vanguard Newspaper of Tuesday 26 May 2015, Mike Epelle, general manager, Legal of Intels claimed that the Port Harcourt division of the Federal High Court, in a judgment delivered by Justice Lambo Akambi on the 8th of July 2014, in the suit filed by Associated Maritime Services Limited (AMS) against City Real Estate & Property Management Company Limited with suit no.FHC/PH/CS/74/2014 ruled inter-alia:-
“That by virtue of the Nigerian Ports Authority Act CapN-123 Laws of the Federation of Nigeria 2004 and in particular, sections 7(a), (b), (c) and (k); 8(1) and 32(1) thereof, NPA is vested with powers to enforce compliance with the arrangements made by the Bureau of Public Enterprise (BPE) designating all federal ports in the country as to guarantee, among others, efficient management of ports operation.”
Also: “That all imports or exports of oil and gas cargoes are to be undertaken through the designated oil & gas terminals and are liable to be charged such rates and delivery charges applicable to oil and gas cargoes ,as approved by the NPA (the Concessioner).”
According to Epelle, the effect of the orders made by the Federal High Court Lagos in the various suits filed by PTOL, Nigerdock and LADOL which now restrained NPA in respect of vessels meant for those terminals means that NPA cannot issue directive as to the appropriate port terminal for such vessels to berth even if they are carrying oil & gas related cargoes. This is at variance with the pronouncement of Justice Lambo of the Federal High Court Port Harcourt in the suit filed by AMS against City Real Estate & Property Management Company.
Epelle stressed that his comments were not in any way intended to neither mislead the public nor cast aspersions on the judiciary as suggested by Ovubude. He added that he has unflinching confidence in the ability of the courts to ultimately do justice in the suits as interested parties have taken necessary legal steps in order to ventilate the facts.