SIFAX boss blames non-implementation of Caboatge for low shipping capacity

Worried by the growing poor capacity among Nigerian ship owners to own ships for local seaborne trade, Taiwo Afolabi, group executive vice chairman of SIFAX Group, has identified the need for the Federal Government to put processes that would enabled for effective implementation of the Coastal and Inland Shipping (Cabotage) Act.

Cabotage Act, which is aimed at restricting the use of foreign vessels in carrying out inland and coastal shipping business, so as to promote the use of locally owned vessels in carrying out businesses for the benefit of indigenous ship owners.

However, largely due to lack of full implementation of the Law, Nigerian maritime domain is currently dominated by foreign owned and flagged as their Nigerian counterparts lack the needed capacity to competitive favourably with them.   

According to Afolabi, non-implementation of the Cabotage law has negatively affected the capacity of indigenous ship owners’ to maximally contribute to the nation’s economic growth.

Speaking in an interview with The Director magazine in Lagos recently, Afolabi, observed that the Cabotage law was designed to primarily deepen the participation of Nigerian ship owners in the shipping business and give them more stakes in the local shipping business.

He pointed to the fact that the law makes provisions for Nigerian owned and registered vessels to have exclusive opportunity of engaging in the domestic coastal carriage of cargo and passengers within Nigeria’s maritime domain. This, he noted, is presently not a reality and it makes the Nigerian economy to lose out in the area of job and wealth creation.

On the Cabotage Vessel Financing Fund (CVFF), the SIFAX Group boss said: “The fund came into being with the promulgation of the Cabotage Act in 2003. It was included in the law that the fund would be derived from 2 percent deductions of every contract executed by Nigerian owned ships. The fund was supposed to help in growing the capacity of the indigenous ship owners through the provision of financial assistance to enable them acquire vessels. However in reality, a lot of problems have bedevilled the implementation of this aspect of the law.”

He however appealed to the Federal Government, through the relevant agencies, to take a second look at the law and expedite action on its implementation for the benefit of the industry and the economy at large.