Ship chandling business: Nigeria loses $10bn annually to foreign operators

Due to the refusal of foreign ship operators to utilise indigenous ship chandlers in Nigerian maritime industry, the Federal Government has been losing a whopping sum of $10 billion annually to capital flight.

Ship chandling, a business established in Nigeria through an Act of parliament in 1958, is made up of retail dealers who specialises in supplies of equipment and goods for ships, known as ship’s stores. For traditional sailing ships, items that could be found in a chandlery might include: rosin, turpentine, tar, pitch (resin), linseed oil, whale oil, tallow, lard, varnish, twine, rope and cordage, hemp, oakum, tools (hatchet, axe, hammer, chisel, planes, lantern, nail, spike, boat hook, caulking iron, hand pump, marlinspike), brooms, mops, galley supplies, leather goods, and paper. Items that could be supplied by the modern day chandlers ranges from provisions (foodstuff), crude oil, engine oil, water, engine spare parts, materials and whatever other supplies the captain of the ship may require.

The business, which is regulated by an international body known as the International Ship Suppliers Association, (ISSA) which was formed in 1955, is a business that is central to the existence and the social dynamics of ports and waterfront areas.

In Nigeria, ship chandling is one of the oldest maritime professions that is yet to be fully profitable to the indigenous operators in a country where shipping business is solely dominated by foreign ship owners, who find it difficult to patronise local chandlers.

Speaking at a roundtable organised by the Maritime Reporters’ Association of Nigeria in Lagos recently, Emeka Enebili, an operator, who confirmed that Nigerian economy is losing huge sum to the chandling business, also said that the continuous refusal of foreign ship operators to make use of indigenous chandlers contravenes the Local Content Act promulgated by the Federal Government to grow indigenous companies and create jobs.

Enebeli, who is also the secretary general of the Marine Oil Traders’ Association of Nigeria, also disclosed that Nigerian ship chandlers are given the 95 percent power to render services in the ships, urged the government to ensure that the local content Act is wholly implemented in order to encourage Nigerians participation in the maritime, oil and gas sector effectively.

According to him, the participation of multinational companies in ship chandling has rendered many Nigerians jobless and this has resulted to capital flight. Citing an example, he said that his company recently lost about $200,000 to foreign ship owners in the course of business transactions.

Enebeli commended MARAN, describing it as a critical stakeholder in the maritime industry because of its critical assessments of happenings in the sector, which has helped the governments in policy formulations.

Findings have shown that modern day chandlers deal more in goods typical for fuel-powered commercial ships, such as oil tankers, container ships, bulk carriers. They supply the crew’s food, ship’s maintenance supplies, cleaning compounds, rope and among others. The advantage of a ship’s crew using a chandler is that the crew do not have to find stores in the town they have landed in, nor hold that local currency – assuming they are let out of the dock compound by the immigration authorities.

The need for the services rendered by chandlers is because of the short time required to fill and deliver their special orders to ships, because commercial ships discharge and turn around quickly, delay is expensive and the services of a dependable ship chandler are urgent.