Planned National Carrier And Matters Arising

As the Federal Government plans to establish another national carrier in partnership with private investors 20 years after the liquidation of the Nigerian National Shipping Line (NNSL), Francis Ugwoke, in this report, captures the concerns of industry captains on the project

Going by the statement of the Director-General of the Nigerian Maritime Administration and Safety Agency (NIMASA), Mr Patrick Akpobolokemi, the shipping industry should by now be expecting that the arrangement for the take-off of a national carrier in the sector should have gone far. Akpobolokemi had in July said that the federal government had concluded plans to float another national carrier, 20 years after the liquidation of the Nigerian National Shipping Line (NNSL). The new project would be in partnership with private investors.

As reported, the apex maritime agency boss said President Goodluck Jonathan had tasked his agency as an agent of indigenous shipping development on the need for the project to be realized during his administration. It is over six months that the promise was made, and there are no serious details on how far the project has gone. With the failure of government in shipping business as seen in NNSL collapse, it is clear that government only wants to simply coordinate the private sector investors to key into the project plan.

Akpobolokemi had made it clear that government would only be involved in Public Private Partnership (PPP) initiative in apparent consideration of what happened in the past. To stress the seriousness of the government on the project, Akpobolokemi had urged the shipping community, including members of the Nigerian Shipowners Association of Nigeria (NISAN) to try to make inquiries on the status of the project on weekly basis. The extent to which the shipping community followed this advice is not clear, but the fact on the ground is that not many are currently aware of the level of the project so far.

NIMASA and the NISAN had set up different committees on the project, but it was not clear if the committees had submitted their reports on the project. Efforts made at NIMASA to find out how far the agency had gone with the mandate to champion the establishment of the national carrier were not successful.

Benefits of a National Carrier
Industry experts who spoke to this writer on the benefits of a national carrier said these were enormous. And this position was affirmed by the NIMASA DG as among the reasons why the federal government was interested in the project. Like NNSL before it was liquidated by the former military administration of General Sani Abacha, a national carrier creates a career opportunity for all seafarers, among other professionals. With many universities offering various shipping programmes, among specialised maritime institutions, a national carrier that offers employment hope for these graduates becomes very important. Nigeria’s former International Maritime Organisation (IMO) representative, Engr. Olu Akinsoji told this writer that a national carrier will create human capacity development opportunity for many seafarers in terms of sea-time experience instead of relying on foreign ships. Besides, a well run national carrier, according to experts, is a major revenue earner for the country. With huge market potential considering Nigeria’s export and import trade volume, including the crude oil trade, a national carrier under a conducive policy framework cannot fail.

Industry stakeholders on Issues at Stake
Industry experts who spoke to this writer on the planned national carrier said they were yet to find out how far the project had progressed.

But they doubted the level of participation of individual companies in the project. Those who spoke said government needs to create an enabling environment that will lure investors into the project. To the President of NISA, Capt Dada Labinjo, investing into the project is purely a personal thing. But he disclosed that his association was ready to partner with the government when it is ready for the project. “Investment is a private matter, what and where to invest is a personal matter”, he told this writer while responding to a question on how far his members had embraced the call from the NIMSA DG to invest in the national carrier project.

He added, “I honestly do not know which indigenous shipping company has invested in the national carrier project. But the NISA is thinking of investing, to the extent of shares we can pick up”.

He disclosed that so many things would be considered while investing in the project. Labinjo pointed out the issue of availability of cargo. Noting that government may not have so much skill and even capital, Labinjo, a maritime lawyer, said it should give investors incentive and political will. He said that investors would not want a situation where government will have so much interference, including dictating where the ship will go and where it will not go. He said that his association will carry out a feasibility study on the project when the time comes. The NISA President expressed concern on the state of the Cabotage Vessel Financing Fund (CVFF) which according to him was floated 12 years ago without result.

The CVFF is to assist indigenous shipping companies acquire their own vessels to be able to compete with foreign firms. Labinjo added that the CVFF ought to have been reviewed two times since it was set up, explaining that the law provides that it is reviewed every five years. Unfortunately, he said, 12 years had gone, and nobody had benefitted from the fund. This development, he said, has not helped the local shipping operators.

He said that what government ought to have done if it wanted to protect the fund because of the past failure was to set up a committee that should be headed by a Minister of Transport for its disbursement. He also added that other alternatives would have been to set up a Maritime Bank to handle such fund, like the Agric Bank and Bank of Industry. Expressing dismay that NIMASA is now seen as a revenue generating agency, he said: “NIMASA is not a revenue agency. It is a development agency. Its specific purpose is to develop maritime. If it succeeds to the extent that Nigerian companies develop commercial shipping, it will lead to employment creation and more revenue boom for the Federal Inland Revenue and indeed the national economy”.

Engineer Akinsoji, also former Rector, Maritime Academy of Nigeria (MAN), said that having a national carrier was an important and necessary step to take by the federal government. Akinsoji however recalled earlier proposal made some years ago by the former executive of NISA which was to acquire vessels and approach NIMASA for a national carrier status. He observed that one major issue that has to be addressed which may be the fear of investors is the availability of cargo.

He expressed concern that while Nigeria generates 80 million tons of dry cargo and 200m tons of wet cargo every year, she has no single ship to participate in the lucrative shipping trade, a situation which he attributed to the terms of trading agreement the federal government has with buyers of its crude products.

He noted that the LNG vessels engaged in carriage of products do not fly Nigerian flag, adding that millions of dollars freight rate are enjoyed by other foreign countries. Akinsoji called on the federal government to go and study how other countries like America, Britain, Saudi Arabia, Malaysia, among others control their cargo. He called for a collaborative effort on the part of agencies of government involved, including the Ministries of Finance, Transport to come up with a strategy on how maritime potential can be developed for the good of the economy. He called on the government to always engage the services of people with deep knowledge and expertise to be involved in maritime policy formulation if the sector is to be a revenue spinner for the country.

Another shipping expert, a master mariner, Capt Adewale Ishola, while reacting to the lukewarm attitude being displayed by indigenous operators on the call to invest in the national carrier project, argued that this depends on the arrangement.

Ishola was of the view that government should provide the needed vessels and let the indigenous operators run the business. But more importantly, like others, he said that there should be availability of cargo for investors to be interested in the project. He argued that if only foreign firms carry cargo, apparently referring to the crude petroleum products transportation monopoly, very few Nigerian investors would be interested in the national carrier project. Lamenting on the failure of cabotage regime in the shipping industry, Ishola called on the federal government to go and study the Olisa Agbakoba report on how to move the shipping industry forward.

He said that the report of the committee, which had the Transport Minister, Senator Idris Umar, as a member, was submitted to the government about two years ago has an answer to all questions on how to move the nation’s maritime industry forward at a time of dwindling oil revenue.
Source: This Day Live