Lack of local ship ownership transfers resources to foreign ship owners
By Jeph Ajobaju, Chief Copy Editor
Nigeria lost more $50 billion to foreign ship owners between 2018 and 2022, according to sources at the Ministry of Finance, Budget and Planning in Abuja.
Between 2015 and 2017, the treasury lost about $25 billion to foreign ship owners, with additional $25 billion lost between 2018 and 2022.
A senior official of the ministry disclosed to The Nation more than $20 billion was paid as freight for dry and wet cargoes to foreign ship owners in 2018 and 2019 due to the absence of Nigerian-owned fleet plying international routes.
He said the trend has been recurring over the years, which led to an estimated loss of over $9 billion in 2010 in freight opportunity.
According to him, about $9.60 billion was freight opportunity loss from import and export of dry and wet cargoes in 2020.
The Nigerian National Petroleum Company (NNPC), the official said, needs to encourage subsidiaries to engage indigenous shipping companies in their businesses.
He urged the NNPC to grant local shipping companies the right of first refusal in crude oil lifting contracts, to help sustain their business and grow the economy.
This, he said, would enable local companies take control of the shipping business in line with the diversification policy of the government.
In his view, indigenous fleet owners need to enjoy greater patronage and participation in the oil and gas maritime business, facilitated by the Ministry of Finance, Budget and Planning which plays an important role in fiscal policy.
_________________________________________________________________
Related articles:
NIMASSA ramps up arsenal against maritime crime
Pirates revel in lax security to increase attacks on vessels at Lagos ports
Badagry Port to generate $2.6b, create 5,000 jobs
__________________________________________________________________
Conducive environment, political will
A maritime expert, Gbolahan Adesoji, said for Abuja to realise its programme, it has to put in place a conducive environment backed by a strong political will with incentives to operators, according to reporting by The Nation.
“Since 1996,” he recounted, “there has been a rapid rise in cargo throughput culminating in an unprecedented volume in 2011.
“It is worthy of note that average cargo throughput from 1956 to 2005 is 14,467,024 metric tonnes while the average throughput increased from 49,173,324 metric tonnes.
“The yearly average cargo throughput of 70,926,939.38 metric tonnes of cargo from 2006 to 2018 over the yearly average of 14,467,024 metric tonnes from 1956 to 2005 shows a percentage increase of 490.26 per cent.
“This shows the remarkable progress made in our port developmental efforts since the port concession era. Statistics also show that the cargo throughput increased from 49,173,324 metric tonnes.”
A senior official of the Nigerian Maritime Administration and Safety Agency (NIMASA), who craved anonymity, said it was as a result of this that former Transportation Minister Rotimi Amaechi set up a committee for the Nigerian fleet implementation.
To generate more revenue, in his view, “there is the need to see if we can expand the Nigerian fleet, the work and the cargoes that they carry.
“We will be saving ourselves foreign exchange and we would be able to generate funds in foreign exchange as well. So it is very important for the agencies in the maritime industry to come together and create an expansion for Nigerian fleet.
“By so doing, we would also be creating jobs for Nigerians. When we expand the fleet we would also be expanding our transport infrastructure.”
NIMASA, the official said, is working to ensure the disbursement of the $350 million and N16 billion Cabotage Vessel Financing Funds (CVFF) to boost the efforts of the indigenous ship owners.
Banks that have shown interest in the disbursement include Zenith Bank, Polaris Bank, United Bank of Africa (UBA), Jaiz Bank, and Union Bank, and they have met with NIMASA to discuss the interest rate, collaterals, and requirements.
NIMASA Director General Bashir Jamoh has explained the disbursement of the CVFF cannot start without stakeholders’ engagement which the agency is doing.