SOAN woos Commonwealth nations’ investors to unlock Nigeria’s shipping business
No doubt that the Ship Owners Association of Nigeria (SOAN) had an insightful session that brought the untapped investment opportunities in the nation’s maritime industry to the eyes of the Commonwealth nation’s at the just concluded Commonwealth Business Forum (CBF) held in Malta recently.
Presenting a paper titled, ‘The Shipping and Maritime Industry in Nigeria: Opportunities and Challenges,’ Greg Ogbeifun, SOAN President, who invited foreign investors to tap into the opportunities in Nigerian shipping sector so as to expand the frontiers of their businesses, also demonstrated that Nigeria’s maritime domain offers huge opportunities for investment.
According to him, the Nigerian maritime sector which spans over 84,000 square meters is of great strategic importance to the nation due to the huge mineral resources and marine life it offers, and they range from hydrocarbons to living and non-living resources.
Maritime sector, he pointed out, remains the nation’s economic centre of gravity with 80 percent of the national budget based on revenues from crude oil and gas exports, taxes and royalties. This underlines the fact that maritime will remain attractive as a sector that will continue to generate interest on account of its potentials.
Statistically, Nigeria as the largest market and economy in the sub-Saharan Africa, accounts for over 65 percent of the total sea-borne traffic in volume and value in the region. Also, aside a high volume of import and export trade from and to dominant economic regions of the world, activities in all sectors of the economy, have continued to expand in scope following the liberalisation of economy. These expansionist trends at the macro level have widened the investment frontiers in the shipping and logistics industry.
Listing the opportunities in the nation’s shipping business, the SOAN boss stated that the enactment of Cabotage Act has resulted to an increase in demand for cargoes and persons to be transported between ports and inland waterways. This, he said, has called for modern, safe, reliable and efficient domestic ships and ferries to facilitate movement.
Secondly, he stated that Nigeria needs to open-up its shipping and ship-repair businesses giving the volume of ships that call the port annually. In the first quarter of 2015 alone, the Nigerian Ports Authority (NPA) disclosed that a total of 5,139 oceangoing vessels with a total Gross Tonnage (GT) of 61,990,999 called the ports. The GT of crude oil tankers recorded in the period under review showed a 12 percent increase over the equivalent period in 2014.
Therefore, Ogbeifun noted that such number of vessels trading on Nigerian waters and volume of maritime activities in the country demands vibrant ship repair and dry dock facilities to service vessels when necessary. “Thus the need for international participation in the development of a robust ship-building and repair industry that would produce ships and marine platforms locally, as required by Cabotage Act.”
In terms of upstream operations, there are about 335 offshore installations in developmental and operational stages within West Africa, showing that there is imminent need for various types of offshore support vessels as replacement for aged vessels. Offshore activities can generally be broken into drilling and production, which involves more dynamic and greater variety of marine equipment. For this, specialized vessels are required and it calls for partnership opportunities with foreign investors to grow indigenous capacity.
Also, there is a growing demand for integrated logistics services to support increasing industrial production and services. Thus, the need for indigenous logistics companies to partner with foreign ship owners who control large volumes of freight, because such partnership will offer opportunities for transfer of technical and managerial know-how.
SOAN president further made it clear that most regions in the country cannot be serviced directly by the seaports. This barrier makes the development of inland container depots (ICDs) and dry ports imperative in order to bring port services closer to major commercial cities in the country.
Nigeria has a number of wrecked ships abandoned midstream on the waterways due to absence of viable ship-breaking industry, which is considered to be highly mechanised operation concentrated in industrialised countries. Apart from the small activities by some Chinese firms down south in Calabar, Nigerian ship owners are forced to send their vessels to scrap yards in these countries. Owing to the cost of towing wrecked vessels to other countries for ship-breaking and recycling, owners abandon their vessel on waterways.
However, Ogbeifun reveals that companies such as Starzs Marine and Engineering Limited, operators of the Starzs Shipyard at Onne, is perfecting plans to begin ship-breaking operations, which Indians have indicated partnership interest. Still, there is need for serious foreign partnership in utilisation of technology.
Nigeria’s presentation further canvassed for opportunity for the Commonwealth to develop a master plan that will not only see an enhanced shipping activity within the region, but create the enabling environment for international investments to thrive.
Uzoamaka Anagor-Ewuzie