Why Nigeria loses $9.1bn in freight revenue annually to foreign liners
Hassan Bello, executive secretary, Nigeria Shippers Council (NSC), on Sunday said that the country loses an estimated $9.1billion annually in freight revenue that would have accrued to Federal Government due to foreign domination of shipping business.
Between 2004 and 2017, Nigeria recorded total vessel traffic of 25,256 vessels with the total gross freight of $39 billion but the country earned a paltry sum of $1 billion as levies for NIMASA.
Lack of quality vessels is the major reason why Nigerian shipping companies find it difficult to compete with their foreign counterparts. Furthermore, ship owners spend huge sums on payment of import duty and this takes close to 14 percent of the total cost of importing fully built vessels and their corresponding spare parts, as Nigeria currently lacks capacity to build ships in-country.
It is expected that creation of cheap funds would provide Nigerians the opportunity to own different categories of oceangoing vessels such as crude tankers, containerised vessels, bulk cargo carriers, general cargo and dry cargo carriers, among others.
Bello, who spoke on the feasibility of the proposed national carrier, told the News Agency of Nigeria (NAN) in Lagos that the failure of Nigeria to build capacity among its indigenous ship owners has left the lucrative business in the hands of foreign shipping lines, which have been milking the economy.
“We need to a have national carrier because of the profound economic impact it will have on our economy. We have lost so much in terms of earnings of freight to foreign shipping companies.
Listing the areas of loss, Bello said that on dry cargo, Nigerians do not operate any ship at all, while on the wet cargo, Nigerians do not lift the crude and this imbalance is very dangerous to the economy.
On what has been done, he said that Rotimi Amaechi, the minister of transportation, set up a committee with the Nigeria Shippers Council as chairman, to lead the private sector in the setting up the national carrier, and they started working with PIL, a Singaporean shipping company.
“We signed an MoU with PIL about three years back but the operating atmosphere of shipping in Nigeria is murky and not profitable because there are many obstacles which include lack of incentives, lack of government infrastructure and government support.
He further identified unwillingness or inability of Nigeria’s private sector to support this very important enterprise as another issue impeding the growth of shipping business in Nigeria.
According to him, setting up of national fleet is such an important venture that it has to be painstakingly done, such that it takes years to pull off, that is why the committee for the national fleet implementation had to retrace its steps.
“Because the government is very serious about the economy, we were able to approach and get the audience of the Vice-President and we addressed the Economic Management Team on the vision. This project, if we get it right, it means much more earnings for freight,” Bello said.
“It means greater revenue for the government, employment for our people. It means setting up of associated industries, ship building, ship repairs, involvement of our financial institutions like banks and insurance, even the pride of having ships flying the Nigerian flag”.
On the way forward, Bello said that Nigeria needs to implement a lot of reforms that include the flag administration and the ship registry of Nigeria, in line with international standards “so that we could attract people to come and register ships in Nigeria.
“We need investment in vessel repairs and ship building, so that Nigerians will not tow ships to Singapore or Ghana for repairs. That will be a drain on the business. We need a reform our nautical colleges, Maritime Academy of Nigeria (MAN) Oron especially so that they would produce the best of cadets with sea time experience and can crew Nigerian ships.
Uzoamaka Anagor-Ewuzie