A Review of the Nigerian Energy Industry

Master mariners fault local content, cabotage levies

Cadets on parade.
Cadets on parade.

12 August 2015, Lagos – Nigerian Association of Master Mariners, (NAMM), has raised alarm over the payment of 1.5 percent Local content and two percent Cabotage levies by indigenous operators, which they described as double taxation.

The group also said that the double levies paid by indigenous operators in both the maritime and oil and gas industries were beginning to impact negatively on local businesses in the country.

President of the Association, Captain Ade Olopoenia said that both the Cabotage and Local content have failed to achieve the purpose of building indigenous capacity. He said that both the Cabotage and Local Content Acts were also supposed to promote the development of indigenous commercial marine trade in the nation’s coastal waters.

Cost of doing business
Olopoenia noted that the collection of both levies have increased the cost of doing business in Nigeria adding that some of these policies were supposed to be a stop gap to protect local investment.

According to the group’s President, with foreign dominance on coastal trade Nigerian businesses will continue to be short changed. He observed that Nigerian businessmen now add the two percent and 1.5 percent of the value of their contract as against removing the percentage from the contract sum.

The group also fingered the Nigerian National Petroleum Corporation, (NNPC), as a major clog in the businesses of local operators as the Corporation always support the mother vessels to deny local operators from loading their vessels.

“Whenever local vessels come along side the mother vessels, the masters of these mother vessels chase away indigenous vessels and they (local operators) complain to NNPC, which hardly do anything about it,” he added.

Members of the group however agreed to set up a task force to work with the relevant government agencies with a view to ensuring that government rescind either of these levies.
He further explained that what the Cabotage Act is to the Maritime industry is what the Local content is to the oil and gas industry.

He said “This issue must be addressed, we will visit the Ministry of Transport as soon as a minister is appointed, vessels of certain tonnage must not be allowed in to the country as Nigerians have the capacity to handle coastal trade”.
*Godwin Oritse & Adekanbi Adebisi – Vanguard

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