Nigeria’s shipping business, seaborne trade still dominated by foreigners @ 60
Sixty years after Nigeria gained independence from her colonial masters, the nation’s shipping business estimated at over N2 trillion, is still being dominated by foreign vessel owners.
Consequently, the nation’s maritime industry is presently losing billions of dollars in freight earned from shipping business. Also, the country has been recording low gross in national tonnage capacity as only few indigenous owned ships are available to compete with foreign ships in the carriage of goods.
For ship owners, this can be attributed to lack of quality vessels as Nigerian shipping companies have been finding it difficult to compete with its foreign counterparts.
Margaret Orakwusi, chairman of the Shipowners’ Forum, who noted that banks are not lending to ship owners at single digits, said cost of funds has been a major challenge to financing vessel acquisition in Nigeria.
“There is huge gap in indigenous ownership of vessels in Nigeria largely due to lack of fund to acquire new vessels or refurbish the existing fleet. This is why Nigerian ship owners need cheap funds with single digit interest rate to finance vessel acquisition,” she stated.
Orakwusi, who raised alarm that ship owners are drowning in debts to banks, blamed the situation on lack of special lending terms despite the fact that shipping is an investment with long gestation period.
Hassan Bello, chairman of National Fleet Implementation Committee (NFIC), who stated that the recent survey by the committee revealed that the failure of Nigeria to have functional fleet of vessels participating in freighting Nigerian imports and exports cargoes, had seriously impacted the economy.
Bello said that many Nigerian youths, who ordinary would have benefited from either seafaring jobs or other indirect jobs in the maritime sector, have been out of jobs.
According to him, NFIC survey estimated that upon the development of National Fleet, over 131,304 direct and indirect jobs would be created for Nigerians in fiveyear period.
“Without the establishment of National Fleet of vessels, Nigerian maritime sector has been making insignificant contributions to the nation’s Gross Domestic Product (GDP). Against this backdrop, it has been estimated that over $5.42 billion is expected to be added to the GDP while over $1.63 billion would be generated into the Federation Account as corporate income tax paid by indigenous shipping firms within five years,” Bello said.
He listed other impact of lack of National Fleet to include distorted trade balance, poor image and class status among comity of maritime nations.
Bello, who acknowledged that owning of Nigerian registered, flagged and crewed ships would have an immeasurable effect on the economy, stated that Nigerian ship owners have been losing by allowing foreigners to own and operate ships on the nation’s waters.
He said shipping business, together with other aspects of the maritime industry, would finance Nigerian annual budget if properly harnessed.
Meanwhile, Mina Oforiokuma, member, Governing Council, Nigerian Content Development & Monitoring Board (NCDMB), said that, for Nigerian ship owners to compete favourably with its foreign counterparts, the NNPC must provide the contracting tonnages that would enable Nigerians to invest in vessel acquisition.
He stated that NNPC, which is the biggest employer of marine assets that feed the import of petroleum products into Nigeria, and services the export of petroleum products, can be an enabler by providing those contracts of carriage that would make vessel acquisition a more bankable investment in Nigeria.
“Nigeria needs to increase the number of indigenous players in its shipping sector, by participating in the Direct Sales and Direct Purchase ( DSDP) of Crude oil contract especially importation of refined products, which NNPC can reserve for Nigerians,” he suggested.