Nigeria incurs $2.2bn losses annually on weakened maritime sector

Nigeria is losing at least $2.2 billion annually to foreign ship owners and seafarers, Olu Akinsoji, chairman, ministerial committee on the modalities for the establishment of a Nigerian fleet, has said.

Besides, the country is estimated to have spent over N32 billion on training of 3,938 seafarers and 44 cadets sea time abroad following the collapse of the national line, but without visible results in reversing such economic losses.

“If 50 percent of the over 5,000 ships that came to Nigeria in 2014 were Nigerian ships, crewed by Nigerians, say even 20 ships and the crew earning $3000 per person, they would have earned $2.2 billion. This is beside the freight accruable by carrying Nigerian cargo. The human element, the seafarers would have earned $2.2 billion. Imagine the benefits to their families and even to the government in taxes,” Akinsoji said in Abuja, when he led members of his committee to submit the Committee’s report to Rotimi Amaechi, minister of transportation.

According to Akinsoji, “all the international cargo we generate is carried by foreign ship. We don’t have Nigerian ship in international waters carrying dry cargo.”

Speaking on the report of the committee, he said “the report clearly provides three categories of maritime transportation areas Nigeria can establish a shipping company (Nigerian fleet): wet cargo – crude, finished products, high and low pour premium fuel oils: dry cargo, general bulk, container, ro-ro, barge carrier, etc, and the coastal, off-shore support services and facilities, such as cable laying, workboats, tugs, house boat, FPSO, jack-ups, etc.”

He said further that “the committee examined various structural scenario and made recommendations for three optional structures: one, a large holding company with technical management for subsidiaries in all the areas of maritime transportation; second, an independent company in each of the identified areas of shipping, and third, for existing companies to organise themselves to form a Nigerian fleet company.”

After receiving the report, the minister said, “I will give the committee the necessary instrument to implement the report. Your committee will still be a part of the implementation committee that will be chaired by the Nigerian Shippers’ Council.”
He also noted that government would use part of the Cabotage fund to support Nigerian shipping companies who want to invest in the Nigerian shipping line.

Experts argue that the absence of Nigerian-owned ships is the bane of capacity building in the seafaring sub sector of the maritime industry.

Hassan Bello, executive secretary, Nigeria Shippers’ Council, and chairman of the implementation committee, who spoke at the sidelines, said the implementation committee had started meeting immediately. The most important thing is that Nigeria should have effective match in shipping; we must be central in the carriage of our cargo, especially wet cargo (petroleum products).

These have huge impact on the economy of Nigeria. The initiative now is private sector driven, but the government will provide conducive atmosphere for private sector to thrive. The overall impact on the economy would be huge. Imagine the earnings from freight if the freight was done by Nigeria, he said.