‘Nigerians participation in shipping should be considered an emergency’–Otunba Folarin


With over 150 million metric tons of cargo being shipped into Nigeria yearly using 5,000 ships manned by foreigners, Nigerians are still struggling to find a way of participating in the shipping business in their country. The Chairman of the Port Consultative Council (PCC), Otunba Kunle Folarin here hinted that if the country could grab only 5 per cent of the opportunity in shipping, over 4,000 job opportunities could be made available for the youths. Here him:

Cabotage Act was enacted in 2003 and its implementation commenced in 2004, So it is ten years. Cabotage is a very good law, because it seems to promote an all inclusive participation of Nigerians in the trade generated along the coast. It also supposed to provide employment for Nigerian Seafarers who have been trained and have the capacity to work within Nigerian territorial waters. It ought also to generate revenue for the Federal Government as well as the state in areas where the ships are trading with many other additional benefits for those who will be providing services for the ships in the cabotage area. But what are the challenges and what can we do to make it work? If it has worked in other places, why can’t it work here? Most of the shipping lines do not offer practical training to cadets. So many of them do not have sea time experience, but if the cabotage is really working, even if it is only one seafarer, a cadet which you can put on each of the ships in the cabotage area, then we shall have that problem solved by a very good percentage and then they can have their competence. The good news is that they can work outside Nigeria. The certificate of competence is issued by the agency of government and it is acceptable anywhere in the world.

The cabotage Act states that the ships to be used must be 100per cent built in Nigeria but we do not have the ship yards to build ships and that is a constraints.

Many people are wondering why don’t we start building the small ones instead of the bigger ones of 10,000 tonnage. We can start with those under 5,000 tons so that we can have Nigerians working in the supply boats, tug boats and other smaller crafts in the cabotage regime. So, the cross of 100per cent built Nigerian ships is a challenge. But now the Nigerian Maritime Administration and Safety Agency (NIMASA) is doing a lot about that. NIMASA is trying, but all the school being attended by Nigeria abroad are demanding one thing from them which is sea time; which is the major condition given to the foreign schools. If Maritime Academy Oron (MAN) can guarantee sea time then there is no need sending anybody abroad; which can be achieve if they have shipping lines that will take cadets on board for the 18 months sea time.

The second issue is that the ship must be manned 100per cent by Nigerians seafarers. Here we are with many seafarers, but no certificate of competence since they have no practical experience which is the sea time. NIMASA is not the agency to award sea time; it is the responsibility of the academy. You see, Nigeria generates over 150 million metric tons of cargo in a year and pay over $5billion for freights. Over 5,000 ships which harboured on Nigerian territorial waters in a year are manned by foreigners. Nigerians have to find a way of participating in the shipping business. Nigeria is an import dependent nation. So we import heavily either raw materials or finished goods.

On training, he said: We have already established that foreign ships bring over 80percent of the goods that comes into the country as well as the exports. So, if they will not give our cadets sea time opportunity and if there are indigenous shipping lines which base is in Nigeria, they have no choice other than to accommodate Nigerian seafarers on their liners. By this arrangement the cadets will get the sea time. If we have 10 in each vessels, let say 10 ships, the problem will be partly solved.

Basically, if Oron can acquire a training ship, it will go a long way and we will not blame the foreigners because the more Nigerians they train the more they are likely to replace their nationals.

One of the areas to deal with the issue of sea time facing many seafarers is to develop our cabotage at least within our territorial waters.

The second one is for Oron to be empowered to have a training ship. It may not accommodate all the graduates but it will be a start in the right direction. It is a major issue, if you look at the huge trade generated by Nigerians and the number of ships that carry those trades, if Nigerians can hold only 5per cent of that opportunity, then we could have created over 4,000 employment.

Turning to Nigerian ship-owners, he said: I pity the Nigerian Indigenous Shipping companies because they have big hopes in the disbursement of the Cabotage Vessel Financing Fund (CVFF) but to me over 10years now, what are the constraints? I think we should go back to the drawing board and think of other ways to fund indigenous shipping. If the fund is not disbursed and it is delaying the participation of Nigerians in our coastal shipping activities then we must begin to look for alternatives. Even when the fund is disbursed will it be enough? But the important thing is that it will help us participate in the trade because it is our trade and we must not forget that without the maritime sector there is no revenue generation for Nigeria. 85per cent of every goods that comes into Nigeria is from the seaports.

The entire revenue generation of oil and gas income is dependent on shipping. It is very important that the indigenous companies must start to look at other ways to fund acquisition of vessels and repair of vessels. I’m not saying that CVFF be laid to rest but let us start looking for alternatives. One of the easiest is a joint ventures. Let us not have 100per cent ownership, I believe 1per cent of 100 is better than 100per cent of zero. Let us see people using the time charter arrangement, whereby you can have the ship for a period to service a particular project.

Presently, we are talking of power project in Nigeria and in some couple of years from now; am sure you cannot imagine the volume of machinery and turbines that will be moved to Nigeria to generate this electric power. Can you imagine the number of vessels that will be involved in shipping these equipment and machinery into Nigeria to service the power sector? Can you also imagine the number of seafarers that will work on those vessels? If they are Nigerians who are the owners of these vessels, then you can imagine the change in the maritime sector of the country.

If you cannot buy a whole ship, you can charter a vessel or you do a joint venture.

There is another called slot charter that is instead of chartering a whole ship peculiar that you carry a particular cargo, you can buy some space in a ship and say that you want to load a quarter of the ship to bring cargoes into the country. The shipping company can issue Bill of Laden for the containers they brought into the country and this will at the long run provide a huge amount of profit for the shipping companies.

The good news is that, when those who will finance the project know there is a job for you to do and a guaranteed cargo that is available they will fund it. We need an urgent rescue in that regard. I am beginning to see the huge traffic that will come with the power sector looking at the refineries. We need to take advantage of the prospect we are seeing in this sector.

On the need for a commercial regulator for the nation’s port sector. The Nigerian Shippers

Councils (NSC) has the capacity to play that role The NSC mandates to a large extent include intervening, arbitrating within the commercial set up of the port system. The council represents the interest of shippers and also Nigeria in the international forum when you are dealing with issues of freight negotiations.

The council ensure that there is competitiveness in the system and now it is the only government institution that performs a similar function as it is in the draft bill of National Transport Commission. The bill includes licensing the strength of the sector and making sure we have enough ethics and obedience. So, I believe that the Nigerian Shippers Council (NSC) should be able to provide the manpower and expertise and be able to live up to the expectation of government. The expectations of many stakeholders who have been crying for too long for a commercial regulator in the system

There is a ministerial pronouncement and don’t forget that most policies are by regulations and not only by the act of assembly. The minister of transport is empower by law to issue regulations as temporary as they may be or not as very expansive as they may be, it may serve as a policy instrument to the agency concerned to be able to perform any function outlined in the regulation.

I believe that as of now, the Federal ministry of Transport will issue a regulation given the Nigerian Shippers Council the mandate to carry out the function of a commercial regulator, that does not for close that after it passes through the National Assembly and the

President gives consent, it becomes a law and the shipper’s council will be able to expand the scope which includes all the functions outlined in the bill when it becomes a law. But, for now it is surprising to say that a regulation by the Federal Ministry of Transport through the authority of the minister will fill the gap that has been there for too long. We cannot wait forever until national assembly passes the national transport commission bill. We need to do something; an expedient thing to do now is to pass a regulation so that the council can go on for now to perform the commercial regulation functions.–International Trade Monitor