N24bn Cabotage Fund Idle As Shipping Firms Face Extinction

The Nigerian indigenous shipping industry would face possible extinction if the federal government failed to take drastic measures to resuscitate it, investigation by LEADERSHIP Sunday has revealed.
It was gathered that some of the local shipping firms with up to 10 vessels a decade ago are either operating with one or no longer have any in active operation.
Three leading indigenous shipping companies, namely, Morlap Shipping Company Ltd, Genesis Shipping Worldwide and Al-Dawood Shipping Line, which formed the Indigenous Ship-owners Association of Nigeria (ISAN), are battling to remain in operation with either one vessel or none at all. Some of them are also facing life-threatening debts while others only have offices to show that they are still in existence.
The main causes of their declining fortunes remain lack of jobs in the nation’s waters and inability to get the Cabotage Vessels Financing Fund (CVFF), a special fund set aside by the federal government to aid indigenous ship-owners and shipping agents.
In 2003, the National Assembly enacted the Coastal and Inland Shipping Act, also known as the Cabotage Act, to give the indigenous shipping companies a competitive edge over their foreign counterparts doing business in Nigeria. But the government and the larger companies have continued to patronise the foreign ships.
The Cabotage Act gives the local shipping companies the right of first refusal and provides the CVFF, which undisbursed funds stood at over $150 million (N23.4billion) as at June 2012. The Act is also not enforced.
The chief executive officer of Morlap Shipping Company Ltd and president of ISAN, Dr. Isaac Jolapamo, said about 80 per cent of indigenous shipping firms had closed shop, with more companies about to close down.
“I used to have six vessels 10 years ago, but now I have only one - MT More Prosperity of 18000+ DWT capacity, which has been vandalised by pirates. I have bought four vessels in the last four years, spending up to $40 million (N6.2 billion) but no jobs. I have not been able to pay back the loans I took from the bank.
“The CVFF has been in the bank with no one reaping its benefits. We are handicapped. About 80 per cent of indigenous shipping companies have closed shops. Today, I have only one vessel and other local shipping lines are just managing to exist.
There are many shipping companies that have come into the industry, but there is no progression. It has only been a kind of linear development,” Jolapamo lamented.
Source: Leadership Nigeria