Analysts expect Buhari to retain N1.5trn lost yearly in shipping business

Worried by the continuous domination of the Nigerian generated seaborne trade by foreign vessel owners, which results to huge capital flight estimated at N1.5 trillion annually, maritime industry analysts are pushing for favourable policy direction from the Muhammadu Buhari-led administration that would help in growing local participation in the nation’s shipping business.

“We want the new government to look into the direction of growing capacity among indigenous ship owners by implementing the Coastal and Inland Shipping (Cabotage) Act 2003, and also put an end to reckless granting of waivers to foreign ship owners at the expense of the indigenous operators,” Adedoyin Ayorinde, a ship owner and the group managing director of Peacegate Group, said, responding to questions from BusinessDay.

Adedoyin, who doubles as the chairman of the Nigerian Maritime Expo (NIMAREX) 2015 planning committee, observed that about 90 percent of Nigerian generated trade is moved by sea, without indigenous participation, resulting in N1.5 trillion annual capital flight.

A ministerial committee set-up by the Federal Government, he stated, also discovered that lack of contracts by indigenous ship owners had left about five million Nigerians unemployed, while the sale of Nigeria crude at Free-on-Board (FoB) negates Nigeria maritime insurance policy, which domesticates the insurance of imports and exports. “And by this Nigeria is currently losing N15 billion or $101 million annually.

“Nigeria is a country that has good laws such as Local Content and Cabotage but leaves a hole for people to exploit the laws. We need to put the policies aright, so that jobs can be created in the shipping sector for indigenous players,” he added.

Investigation reveals that indigenous owned ships are doing about 25 percent of the locally generated seaborne trade, while their foreign counterparts handle the remaining 75 percent, amid Local Content and Cabotage Acts. It was further observed that out of the 457 vessels working upstream, where vessels earn in excess of $85,000 per day, Nigerian-owned ships account for less than 10 percent, which is far less than 70 percent contained in the Local Content Act.

Aminu Umar, acting president of the Nigerian Shipowners Association (NISA) said recently in Lagos, that the Federal Government needs to pay more attention to the maritime industry to shore up its dwindling revenue, following the recent slump in the price of crude oil in the international market.

Umar, who said ship owners would send a proposal to Pesident Muhammadu Buhari on how to raise revenue from the maritime industry, also sees the maritime industry as an alternative sector to shore up revenue for the Federal Government.

He affirmed the need for government to push for total implementation of the Cabotage Act for the growth of the maritime industry and employment generation.

The development of Nigeria’s maritime sector would have a spin-off effect on other related industries such as insurance, steel for ship building and repair yards, which would spring up, said a renowned maritime lawyer, Olisa Agbakoba, in Lagos recently.

“However, in order to tap revenue from this sector, there is need for total overhauling of the available policies and development of a new national shipping policy that would give incentive and finance to local players to enable them play in the big league with foreign vessel owners.”
Source: Business Day Online