Archives Economy Maritime

NNPC: Nigeria Loses Over $5b Annually, To Non Participation In Crude Lifting

Written by Maritime First
  • As Ericsson sacks 160 Nigerian workers, takes jobs to India

Nigeria took a giant step on Wednesday to improve the future of its cadets, as the Minister of Transportation, Rotimi Chibuike Amaechi formally inaugurated the Ship Owners Association of Nigeria’s (SOAN) 100 Cadet Training Berth Scheme in Lagos.

The Minister who was represented by the Nigerian Ports Authority Managing Director, Hadiza Usman flagged off the scheme which is designed to provide the mandatory sea time exposure needed to enable the cadets become employable nationally and internationally, just as the Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Dr Maikanti Baru observed that Nigeria failed to attract any fraction of over $6b it generated in crude afreightment in 2015, because the country lacks the tankers to participate in the business.

Nigeria, according to Dr Baru who delivered a paper with theme on “The establishment of a National fleet for Crude Afreightment” noted, also that Nigeria completely forfeited over $3b which the nation’s chandlers could have generated, because it has no fleet, upon which the local operators could latch onto.

“The establishment of a National fleet for Crude oil afreightment shall help the country save some of the foreign exchange paid to foreign Shipowners. A total of 771,689,625bbl (107,179,115mt) of crude oil was lifted from Nigeria in 2015.

“The current freight rate for 130,000 tonnes vessel from West Africa – UKC /Med is $7.99/tonne. Assuming that the total (which could take 950,000bbl),it means that a total of about N6,165,800,104 was paid to foreign Shipowners. Some of these monies could have been saved, if the nation had a national fleet for Crude affreightment.

“The establishment of a national fleet will go a long way to increase activities in the maritime sector. There will be an increase in shipping related activities in the maritime. There will be an increase in shipping related support services in the country leading to more employment opportunities. It shall also impact the downstream sector, because there shall be increase in local demand for fuel. The country loses related businesses worth approximately $3.5b as a result of non-patronage of local chandlers by shipping lines in the upstream sector. Cumulatively, these and others in dry cargoes, lead to a significant loss of business annually”, stressed Maikanti who was represented by Henry Obi.

Speaking earlier, the Ship Owners Association of Nigeria (SOAN) Arrowhead, Engr Greg Utomwen Ogbeifun expressed satisfaction that the Group’s dedicated effort was already enjoying encouraging recognition from the right quarters, particularly the Presidency, as well as the Minister of Transportation.

“The true potential of the Nigerian Maritime Sector cannot be actualized without efective collaboration between policy makers, regulators, ship owning companies and other key stakeholders. Hence, SOAN was inaugurated and launched to strengthen and sustain the desired connect among key players in
the maritime sector while initiating and promoting discourse and activities on emerging issues in the sector for the sake of achieving a robust and holistic maritime agenda.

“Since SOAN was inaugurated in November 2014, the Association has gained a lot of milestones both within and outside the country. In November 2015, SOAN was invited by the Commonwealth Enterprise and Investment Council (CWEIC) to lead the private sector delegation to the Commonwealth Business Forum in Malta. Following that successful outing, SOAN was admitted as one of the three members of the Commonwealth Maritime Initiative (CMI) and the SOAN’s President was also appointed member of the Advisory Board of the Commonwealth Enterprise and Investment Council (CWEIC), Ship saddled with the responsibility of working closely with Commonwealth governments to attract investment, Promote enterprise and improve the business environment. Further,

“SOAN has through its engagements, increased Government’s interest and participation in global maritime opportunities such as the Nigerian Maritime Autumn Event which was held at the Commonwealth Secretariat, Marlborough House, London on 28th September 2016 with the theme “Nigeria’s Maritime Industry as a Driver of Growth”. The event was a Commonwealth Maritime Initiative (CMI) co-hosted by the Commonwealth Enterprise and Investment Council (CWEIC) and Shipowners Association of Nigeria (SOAN) and co-chaired by the CEO of CWEIC Mr. Oliver Everett and the SOAN President.

“The event had in attendance business leaders, investors, government o/icials and delegates representing maritime interests from across the Commonwealth nations. The Honourable Minister of Transportation Rt. Hon. Rotimi Chibuike Amaechi was invited as the Special Guest of Honour and he was ably represented by Mr. Sabiu Zakari, Permanent Secretary, Federal Ministry of Transportation”, the SOAN President explained further.

In the meantime, Ericsson Nigeria, the local subsidiary of the global telecommunications solutions provider, has disengaged about 160 permanent and outsourced workers in its Network Operating Centre, investigations have shown.

It was gathered that disengagement, which takes effect on Sunday, December 4, 2016, affected 55 full-time employees of the company.

According to sources in the company, some workers were laid off in July when the offshoring (the practice of a company in one country arranging for people in another country to do work for it) of jobs to India began.

Findings show that foreign workers had been recruited to replace the disengaged workers, and knowledge transfer by Nigerian engineers to the new workers was ongoing in the company’s office in India.

Sources revealed that the knowledge transfer had been going on since last year when some Indians were brought into the country to study the management of telecommunications infrastructure in the country.

A copy of the disengagement letter to the permanent workers signed by the Managing Director of the company, Johan Jemdahi, and obtained by our correspondent, reads, “Please be informed that effective December 4, 2016, your position has been declared redundant. We thank you for all your past services to Ericsson. Further information about the redundancy benefits will be communicated to you before the actual termination date.”

Findings showed that in the last two and half years, Ericsson Nigeria had managed the MTN network majorly from its pool of local workers, some of who were former MTN employees, as well as other contracted workers.

One of the affected workers said that the company was offering the jobs, which involved the monitoring of MTN masts and networks in the country, to Indians at reduced costs.

The workers expressed fears that this would be a continuous trend in the telecommunications industry if it was not addressed by the government.

The employee, who spoke on condition of anonymity, said, “The company said it was cheaper for the work to be done in India than in Nigeria. The monitoring of those masts can be done from anywhere. We monitor Abuja, Enugu, Asaba, and Port Harcourt sites from the Lagos office. What they are now proposing is that instead of monitoring from Lagos, they want to monitor from India.

“They have taken the Airtel NOC office to India. They brought about 30 Indians to Nigeria last year to come and understudy the MTN network and after a month, they went back and started monitoring from there. There are no plans to pay compensation to the outsourced workers in the company.”

The Public Relations Manager, Sub-Saharan Africa, Ericsson, Toju Egbebi, who confirmed the development to our correspondent, said the move was part of the company’s global cost and efficiency programme to achieve a net annual cost savings of Swedish Krona 9bn, adding that the programme would continue till 2017.

According to her, the redundancy is being carried out across 180 countries where the company operates.

She explained that on July 19, the company announced actions to further save costs as well as intensify reductions in cost of sales activities and adapt its operations to a weaker mobile broadband market.

Egbebi added, “This means employees will be affected. The decision to offshore our service is in keeping with our global delivery strategy; certain work may be centralised into global delivery centres. This is to enable improved network availability and quality for consumers, and cost efficient network operations for operators.”

Additional report from Punch

About the author


Maritime First