Poor fis­cal poli­cies threaten mar­itime sec­tor growth

The Guardian (Nigeria) - - BUSINESS - By Su­lai­mon Salau

FOR Nige­ria to re­vive the mar­itime in­dus­try and at­tract For­eign Di­rect In­vest­ment (FDI), there is ur­gent need for the Fed­eral Gov­ern­ment to re­view the fis­cal poli­cies in the sec­tor.

Pres­i­dent, Shipown­ers As­so­ci­a­tion of Nige­ria (SOAN), Greg Og­bei­fun, in a chat with The­guardian ahead of the 2017 yearly gen­eral meet­ing of the as­so­ci­a­tion, in La­gos, said the poor fis­cal poli­cies of the Fed­eral Gov­ern­ment have put Nige­ria and Nige­rian opera- tors at a dis­ad­van­taged po­si­tion in the global ship­ping mar­ket.

He said the Fed­eral Gov­ern­ment’s plan to float na­tional fleet with pri­vate in­vestors (Pa­cific In­ter­na­tional Lines of Sin­ga­pore) col­lapsed be­cause of the ob­so­lete laws that the for­eign part­ners felt would make it im­pos­si­ble to re­coup their in­vest­ment.

How­ever, the Og­bei­fun lamented that Nige­ria can­not boast of a sin­gle crude oil tanker at the mo­ment, due to paucity of funds and over­bear­ing fis­cal poli­cies. He faulted the Nige­rian Mar­itime Safety and Ad­min­is­tra­tion Agency (NIMASA) for its fail­ure to dis­burse the Cab­o­tage fund over the years.

The SOAN chief said: “I was part of the del­e­ga­tion that went with the Min­is­ter of Trans­porta­tion to Sin­ga­pore in 2016 dur­ing the sign­ing of the MOU. Along the line, af­ter we had signed the MOU in Sin­ga­pore with PIL, the com­pany came up with is­sues as re­gards our lo­cal tax laws.

“Firstly, PIL made ref­er­ence to our lo­cal laws that will not make the agree­ment vi­able. And they put it in black and white that un­less some of th­ese laws are re­viewed, it will be hard for them to fly the Nige­rian flag. That was the big­gest set­back for that MOU.

“This is also af­fect­ing our crude oil tanker quest. We have to de­cide if we want th­ese things to hap­pen in Nige­ria. Let’s re­view our laws, just like what Malta did. Malta turned around its mar­itime ad­min­is­tra­tion by re­view­ing its tax laws. Malta made its tax laws at­trac­tive for in­ter­na­tional par­tic­ipa- tion, and to­day that coun­try is the envy among mar­itime na t ion s . ”

He added: “What are we talk­ing about? If you are an Amer­i­can, or a Bri­ton or a Greek, and you de­cide to buy a crude oil tanker that will fly your coun­try’s flag, the gov­ern­ment has a law that al­lows you to bring in your tanker into your coun­try on zero duty pay­ment.

“In Nige­ria, if you are bring­ing in a ca­noe, a tug­boat, speed­boat or a tanker, the sum to­tal of the im­por­ta­tion cost that you will pay is about 14 per cent. So if you buy a crude oil tanker for $100m dol­lars, if you take it to Amer­ica, you will pay zero duty as long as it is car­ry­ing an Amer­i­can flag, same in the United King­dom and Greece. But if you bring it to Nige­ria, you will pay N14mil­lion even when it is fly­ing Nige­rian flag.

“Again, you have to re­mem­ber that Nige­rian flagged tankers will be com­pet­ing with for­eign flagged tankers in the same mar­ket, so au­to­mat­i­cally, the Nige­rian flagged tanker is al­ready dis­ad­van­taged.”

Newspapers in English

Newspapers from Nigeria

© PressReader. All rights reserved.