Cabotage: Stakeholders back Gov’t aspiration to end waivers to foreign vessels

Written by Maritime First

…As NIMASA calls for enabling policies to boost indigenous shipping***

Some Maritime Industry stakeholders on Friday hailed Federal Government’s plan to abolish cabotage waivers to foreign vessels, in addition to granting special incentives capable of encouraging indigenous ship ownership in a move to entrench an effective the Cabotage Act.

The stakeholders made their observations in Lagos, saying it was possible to end waivers to foreign vessels and  give room for Nigerians to own ships.

This was sequel to Government’s position on Wednesday through the Nigerian Maritime Administration and Safety Agency  (NIMASA), serving a five-year notice/ plan to bring to an end, waivers given to foreign vessels trading on the nation’s waters.

Also read:NIMASA to end Cabotage clause, after 16 years

Speaking on the issue, Mrs Obigali Obi, Director-General of Nigerian Chamber of Shipping also counsel that efforts should be geared toward resuscitating the Ajaokuta steel Company because  the country could build ship with a functional steel company, which  would in turn encourage the springing  up  of cottage industries.

Mrs Obigali Obi, Director-General of Nigerian Chamber of Shipping

“There is nothing wrong in the administration of the Cabotage Act, as that will help to create the much needed jobs for Nigerians.

“But we need to tread with caution while trying to implement that, knowing that we are dealing with an international trade variant of our economy.

“Many of the infrastructure that we need to anchor this on, are  not  yet available; the manpower to manage the platform and provide services onboard are still not there,’’ she said.

Another stakeholder, Mrs Margaret Orakwusi, appealed to the Federal Government to ensure that  the banks would grant loans to Nigerian shippers at a single-digit rate to boost ship ownership and development.

“I thank God that people in government are thinking in this direction that we, the operators, have been longing for. If we get it right now, the economy will be shielded from negative international economic reflex.

Mrs Margaret Orakwusi, Chairman Shipping Forum

“Cabotage is good; it will resonate the sector and foster expansion in all ramifications while engaging the cadets in the system.

“The whole idea is to have a succession plan that will midwife a full blown cabotage regime that will be of benefit to Nigerians instead of the foreigners trading on our waters.

“It has been observed that the Cabotage Act, since inception in 2003, has, to a large extent, favoured foreign ship owners while killing indigenous ones,’’ she said.

The NIMASA Director General had said that cessation of cabotage waivers would begin with a two-year plan to end waivers to fishing trawlers, tugs, offshore supply vessels, barges, house boats, tankers of below 10,000 GRT and vessels such as FPSOs.

According to him, the plan will see an end to building of such vessel from outside the country in four years,  to give room for Nigerian indigenous ship building and development 

Meanwhile, the Nigerian Maritime Administration and Safety Agency (NIMASA) has called for the implementation of policies that will strengthen indigenous shipping companies to make them competitive internationally.

Dakuku Peterside made the call on Friday in Enugu at the ongoing Enugu International Trade Fair.

Dr. Dakuku Peterside, NIMASA DG

Peterside, who was represented by the Director of Audit in the agency, Mr Victor Onuzurike, said that there was presently no registered indigenous shipping company involved in international operations in the country.

The DG also highlighted that Nigeria had about 2,206 flagged coastal ships of all categories but no registered indigenous international ocean-going vessel.

He described a situation where all cargos bringing vessels into Nigeria were operated by foreigners as against economic development of the country.

Peterside, therefore, appealed for some space to be reserved for indigenous shipping companies to thrive in the international scene.

“These statistics present a very poor outlook for indigenous participation in commercial shipping business in Nigeria.

“The reality is that it will get worse without conscious government intervention,” he said.

Peterside said that it was costly to ignore the criticality of cargo availability and its implications on the development of local shipping capacity of a maritime nation.

He said that the situation had made a deliberate well coordinated government support through public sector cargo reservation for indigenous shipping owners imperative.

“The common justification for state support is premised on the profound economic and strategic interest of a country,” he said.

He said that shipping would less likely develop without conscious government intervention by way of fiscal policy framework.

He said that such conscious move would be a catalyst to ship acquisition and by implication, rebuild Nigeria’s moribund national fleet.

“The Cabotage regime is a protectionist policy aimed at encouraging and supporting indigenous operators by insisting that the vessels that trade in the Cabotage region must be built and registered in Nigeria and manned by Nigerians,” Peterside said.

Earlier, the President of Enugu Chamber of Commerce Industries Mines and Agriculture (ECCIMA), Mr Emeka Udeze, commended NIMASA for assisting to boost the quantum of importation through shipping.

Udeze said that the agency had greatly boosted trade and commerce, adding that without the critical roles being played by NIMASA, the sector would not have been vibrant.

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