2014: Uncertainty over new maritime policies

Tin Can Island port29 December 2013, Lagos – This piece, captures the fear of stakeholders in the maritime sector over the direction of policies in a pre-election year

For maritime stakeholders, the year 2013, is coming to an end with a lot of apprehension on what 2014 holds for the sector. While not writing off 2013 as one in which so much hope was dashed, stakeholders are hoping that the inadequacies of this year would be taken care of in the coming year. Yet, stakeholders are still not comfortable with what 2014 holds for them considering the 2015 general election in which politicians would be very busy working to remain politically relevant in their constituencies instead of giving serious attention to real issues that affect the economy.

In the shipping sector, expectations are high that in the coming year, issues that affect the growth of the sector would be addressed for the interest of indigenous companies. Some of these issues include the continued absence of ports commercial regulator, improvement on the rail system linked to the ports, Inland Container Depots (ICDs), Cabotage Vessel Financing Fund and Nigeria’s better position in the International Maritime Organisation (IMO) and auto policy. On the trading environment, stakeholders are optimistic that the current decision of the Federal Government approving the take-over of Destination Inspection (DI) regime by the Nigeria Customs Service (NCS) would be a wise decision with the Service living up to expectations in the national assignment. The other expectation is an improvement on goods delivery in the ports as against the nightmare which many importers and freight forwarders have suffered this year in the hands of some terminal operators by way of arbitrary charges. This can only be addressed with the establishment of a ports commercial regulator that will have the power of the law to tackle years of irregularities in the ports system.

Ports Regulator
With the reform in the ports which brought in private operators taking over terminal operations from the Nigerian Ports Authority (NPA), stakeholders had expected government to establish a commercial regulator like every other sector, but this was not done. Although, government had indicated interest in doing this with a Bill before the National Assembly on the issue, the possibility of achieving it in the coming year is remote. Already, stakeholders have tipped the Nigerian Shippers Council to assume this responsibility with indications that the federal government welcomes this idea, but what is expected is an Act of the National Assembly giving full powers to the Council. Expectations are high that this would be addressed this year.

ICDs and Approval as Ports of Destination
So far, some of the companies partnering with the Federal Government appear to be ready to start operation, but they are apprehensive since there is no pronouncement recognising them as Ports of Origin or Destination. The investors who have been given words of encouragement by the Nigerian Shippers Council (NSC) which is supervising the project want concrete action through the announcement. Government is expected to do this early in the year as one of the ways of giving credibility to the project and assuring the investors of its good intention.

Rail Links to the Ports
So far, there is only one rail link to the Lagos Ports. That is the Apapa rail project. Expectations are high that there should be an improvement to cover many ports all over the country as the most modern way of running the ports. The ICDs project will be better with rail links.

Cabotage Vessel Financing Fund
The current scenario in the shipping industry is not encouraging as many indigenous operators are fast losing business for not having state of the art vessels to compete with their foreign counterparts. The Nigerian National Petroleum Corporation (NNPC) and oil majors hardly give jobs to the local shipping companies on the claim that many of them do not use seaworthy vessels. The lucky ones were those who had to source funds outside the country or at very high interest rate in the country to acquire good vessels. Expectations are that the Presidency will in 2014 approve the disbursement of about $180million CVFF to the six beneficiaries that have been selected. Reports have it that the Nigerian Maritime Administration and Safety Agency (NIMASA) had on completing its own statutory responsibility passed the baton to the Transport Minister, Senator Idris Umar, who also forwarded recommendations to the Presidency. One expects that the Presidency should in the coming year address the issue by approving that the funds be disbursed to the beneficiaries as this will go a along way in building fleet capacity of Nigerian companies. The idea of CVFF came up about 10 years ago following the suspension of Ship Acquisition and Ship Building Fund (SASBF). Stakeholders have leveled all manner allegations against the authorities as far as the CVFF is concerned and the expectation is for government to prove them wrong by disbursing the fund early in 2014.

Auto Policy
To importers, customs agents, traders, terminal operators, the auto policy announced by the Federal Government in November will do more harm to the general economy than the benefits expected when Nigeria begins to manufacture its own vehicles. While the auto policy does not ban importation of vehicles, apprehension is that the high tariff on such goods will make the business unattractive. The argument is that the firms that will be interested in investing in vehicles manufacturing will not be able to meet up with the demand by Nigerians, thus making the prices out of the reach of many. Besides, high tariff on vehicles is seen as capable of shooting up the prices of all types of vehicles, and making it impossible for low income earners in Nigeria to buy vehicles. The policy is also expected to promote traffic in the neighbouring ports with Nigerian importers smuggling the products into the country at all cost. This is what is happening following the high duty placed on rice import last year. Stakeholders expect the government to take another look at the policy and review it for the wider interest of the economy.

High Expectations by Stakeholders
President of the National Association of Government Approved Freight Forwarders (NAGAFF), Chief Eugene Nweke, who spoke to THISDAY said that so much is expected of government in the coming year as far as the shipping industry is concerned. Nweke who said that many stakeholders are apprehensive of what the coming year holds for them said that government should in the first quarter of the year tackle policy issues that will promote the sector’s fortunes. He pointed out the issue ports regulator and said that the executive arm of government and the National Assembly should do everything to accord the Shippers Council the constitutional powers to regulate the ports industry through legislation. He also called on government to ensure that it takes another look at the auto policy and its effect on terminal operators, importers, traders and workers. On the CVFF, he said, it was time for government to disburse the fund if it was serious about developing indigenous shipping capacity.
*Francis Ugwoke, Thisday

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