President urged to push for Maritime strategy master plan in transition note

Disturbed by series of challenges throwing spanner in the growth of the nation’s maritime sector, stakeholders in the sector have urged the outgoing President Goodluck Jonathan to include a Maritime strategy master plan in his transition note that is to be handed over to the president-elect, Mohammadu Buhari on May 28, 2015.

The plan should among other reforms propose the immediate disbursement of the accumulated Cabotage Vessel Finance Fund (CVFF) to indigenous shippers in the country, which was estimated at $500 million. The CVFF, currently in the custody of the Nigerian Maritime Administration and Safety Agency (NIMASA) and the four selected primary lending institution (banks), is meant to help indigenous shipping companies to acquire new vessels, but unfortunately has remained unutilised.

The accumulated fund, which has been a subject of secrecy, has also succeeded in creating doubt among ship owners in recent time. However, analysts say if effectively utilised will not only fast track the growth of the maritime sector but also buoy the incoming administration’s pledge to diversify the economy.

President Jonathan has also been tasked to recommend a comprehensive enforcement and review of some sections of the existing Coastal and Inland Shipping (CABOTAGE) Act of 2003 to the incoming government when taking a bow late next month.

The Act, which its implementation process has been branded “ineffective” by most industry analysts since its 12 years of existence, is believed not to have only stagnated the growth of the maritime sector but also led to the yearly loss of over $6 billion to foreign shipping operators due to lack of indigenous participation in the maritime transport system.

Under the Act, foreign shipping firms are expected to only participate in coastal transportation when there is no Nigerian with capacity for such jobs.

However, with data showing that foreign firms control as much as 80 percent of Cabotage trade in the country’s coastal areas, industry watchers say there is need for a concerted effort to first, retool and then completely enforce the Act in ensuring it lives up to its billing.

“While the President might seem handicapped to drive any major policy now, he can recommend a Maritime sector strategy master plan, which will include the disbursement of the estimated $500 million CVFF to indigenous shipping firm in his transition note to the incoming government,” Olisa Agbakoba, a maritime lawyer told BusinessDay.

Agbakoba, who highlighted the need for the effective utilisation of the fund by indigenous shipping firms, says if rightly disbursed by the incoming administration, the fund will no doubt surge the contribution of the maritime sector of the economy.

BusinessDay check reveals that as an import-based economy, whose 100 percent of the annual 1 million twenty-foot equivalent units (TEUs) of containers and 100 million metric tons of cargoes imported annually were handled by ocean-going container carriers owned by world top players such as Maersk; Mediterranean Shipping Companies; CMA CGM Group; Evergreen Line, among others, local shippers have continued to play a second fiddle in their own market.

“Nigeria is an oil producing countries that does an average 2.2 million barrels per day amounting to over 60 million barrels per month, yet indigenous ship owners handle less than 20 percent of the oil lifting jobs,” Isaac Jolapamo, past chairman of Nigeria Ship owners Association (NISA), told BusinesDay in an earlier chat.

Jolapamo, who confirmed that not less than 50 percent of Nigerian shipping companies have been thrown out of business due to poor implementation of the Cabotage Act, also raised an alarm that the constant granting of ministerial waivers to foreign vessels to participate in domestic shipping, reserved solely for local firms was a major reason their businesses were dying.

Further checks reveal that lack of quality vessels and shortage of manpower that would crew Nigerian owned vessels as stipulated by the Cabotage Act are part of the reasons indigenous shipping firms are not competing favourably with their foreign counterparts.

ODINAKA MBONU