21 August 2016, Lagos – In a strong move to develop potential in the maritime industry and raise its contribution to the national economy, the federal government and stakeholders in the industry are in synergy to establish a national fleet expected to participate in crude oil affreightment, reports Francis Ugwoke
Since assumption of office, the Transportation Minister, Rotimi Amaechi, has no doubt been pre-occupied with developing potential in the nation’s transport industry. Apart from opening up rail links in major geographical routes in the country, the federal government is also making efforts to link all the seaports with rails, a development that will go a long way in checking congestion at the seaports and roads.
The latest move is the establishment of a brand new national carrier. With this, there is no doubt that the contribution of the transport industry to the Gross Domestic Product (GDP) will improve tremendously. Amaechi had early this year raised concerns that the sector contributes only 1.41 per cent to the national economy. Describing this as unaccepted, Amaechi said the problem had been untapped potential. To improve on the situation, he hinted on the development of a national transportation master-plan, which aim is to diversify the national economy.
Since the liquidation of the Nigerian National Shipping Line (NNSL) 21 years ago, it has not been well with the indigenous shipping industry. NNSL was liquidated following huge debt running into hundreds of millions of dollars. International creditors were on the prowl to arrest any ship associated with NNSL, and in a flash, a fleet of 29 vessels went down to less than 12 in Nigerian waters. Many of the vessels were comatose and would require huge sums of money to re-float them. The administration of late Sani Abacha apparently based on the embarrassment the arrest of Nigerian flagged vessels was causing the country in the face of the huge debt, approved the liquidation of the national carrier.
NNSL was therefore liquidated in July 1995 by the former Transport Minister, late Major General Ibrahim Gumel. But since the liquidation, industry stakeholders have been full of lamentation about the huge trade imbalance this has created for the country. For instance, it is envisaged that by now, Nigeria would have reached the capacity to be involved in crude oil affreightment. This is a revenue spinner for everyone. This is estimated to run into hundreds of billions of dollars annually that would have accrued to Nigeria. It could also be that the so much talked about N7 trillion annual income from the maritime sector by some prominent stakeholders could have been realised if Nigerian ship-owners were involved in crude oil affreightment.
Initially, there was so much friction when the transport minister came up with the idea of having a national carrier. This was on the belief by some indigenous shipping operators that the minister was planning to float the national carrier by using the Cabotage Vessel Financing Fund, CVFF that replaced Ship Acquisition and Ship Building Fund (SASBF). The former administration of Goodluck Jonathan had approved six companies to benefit from the fund, but could not effect this more than two years after the announcement. Everyone was left in doubt about the status of the fund, whether the last administration had used it or still intact.
Many believed the money was tampered with, but the details could not come up. On assuming office, the minister was considering using the money to float a national carrier instead of giving it out to companies whose owners would see it as a national cake and therefore would not pay back like what happened to SASBF. But this move was seen as not appropriately covered by law.
Ship-owners who described it as simply their contributions for indigenous shipping development were of the view that it must be applied as provided by law. After due consultation, Amaechi appeared to have soft-pedaled on this, making it clear that the planned national carrier would be private sector driven under a public-private partnership (PPP). The national carrier is expected to create employment for many Nigerians, and would serve as a training ground for many Nigerian cadets who would need sea-time training.
Committee on National Carrier
To ensure that government realises its dream of having a national carrier, the transport minister few months ago set up a National Committee to handle the assignment. The committee is headed by the Executive Secretary of the Nigerian Shippers’ Council (NSC), Hassan Bello. Bello’s choice is not unconnected with his knowledge of the industry and also as a versatile maritime lawyer. But beyond this, include the goodwill, which he and his council enjoy among stakeholders. Bello has served in many inter-ministerial maritime committees, which improved on maritime laws and admiralty jurisdiction, particularly the one on domestication of international conventions ratified by Nigerian government.
The committee is to prepare the groundwork for the new national carrier to take off. As part of his assignment, Bello said the committee planned to actualise the recommendation of the Engr. Olu Akinsoji Ministerial Committee, which stressed the need to have Nigerian-flagged vessels.
According to him, Nigeria as a maritime nation needs to have merchant vessels because of the multiplier effect on the national economy. Bello, in an interview with journalists, explained that the committee would be thorough in its assignment to get it right, adding that a sub-committee was currently involved in data collation and analysis of types of vessels, cargo, routes for the vessels, among other developments in shipping trade. He also said the committee was looking at trade laws, gaps in laws and the possibility of enacting certain laws. He explained that this was important so that the committee can do a better job in line with the expectations of the government.
Referring to former President Olusegun Obasanjo, who had expressed caution on the project, Bello explained that NNSL failed because of the types of vessels used in trading, including other issues such as “profligacy and corruption”. He said with ship-owners, engineers, ship surveyors, maritime lawyers, who had private sector orientation, as members of the Implementation committee, he had no doubt that the proposed national carrier would be a reality. He made it clear that unlike in the past, the new national carrier will be established under public private partnership (PPP). Bello disclosed that already, foreign investors interested in the project had approached the committee for partnerships, but added that every effort was being made to put in place, rules of engagement by way of guidelines and terms of contract.
At a meeting with the ship-owners, Bello said all stakeholders who were interested in the national carrier would be accorded all the opportunities. He also explained that contrary to what some people believe, the government will only be encouraging the establishment of a national carrier and not establishing it, adding that the main target were ship-owners. Bello during the committee’s meeting with the transport minister, Amaechi, added, “We should give them the option of participating in the business that is theirs, because we need their experience, we need their capacity, we need their infrastructure and we also need their assets. Maybe they have ships and so many other things.
There will never be a monopoly. Everybody will have the right to come and operate. But what we want is an aggregate, coming together, because when you come together, you have advantage, economies of scale”. He said that government obligation in the project would be to create an enabling environment through effective and favourable policies and laws.