Maritime

Consolidate on Shipping, Prepare for imminent global energy transition shock, Stakeholders tell Nigeria

Consolidate on Shipping, Prepare for imminent global energy transition shock, Stakeholders tell Nigeria
Written by Maritime First

…Stress the need for Nigeria to key into over $19trn global trade opportunities***

Nigeria Maritime core Stakeholders are bent at anchoring indigenous participation to the US $19trn global trade, with a determined aim of eeking something substantial into the nation’s economy.

This was contained in a communique crafted, following a one-day symposium themed “The Establishment of a Nigerian Global Trading Fleet”,  during which participants strenuously identified strategies, challenges, as well as solutions that would catalyse a surge in ownership of Nigeria’s flag-bearing ships, and optimise accruable benefits of the sea-going fleet from global trade opportunities.

The virtual symposium which took place in honour of Engr. Greg Ogbeifun’s 70th birthday had presentations from maritime industry experts, buoyed by a highly Inspiring presentation from Abuja Memorandum of Understanding (MoU) Boss, Barrister Mfon Usoro, shortly after a welcome address by the nation’s foremost shipping Mogul, Engr Greg Utomwen Ogbeifun.

Mrs Mfon Usoro

An issue so dear to everyone, Ogbeifun had expressed his pains that indigenous participation was gradually slipping off the course, and stressed the importance of all hands coming to deck, with both the Governments at various levels, collaborating with the private sector.  Thereafter, Usoro threw in an erudite delivery; and the informed participants delved in.

The participants include: Chairperson, Sealink Promotional Shipping Company, Mrs Dabney Shall- Holma; President, Women’s International Shipping & Trading Association, (Wista Nigeria), Mrs Eunice Ezeoke; Operations Manager, Apapa Bulk Terminal, Capt Marvin Abe; Chief Executive Officer, LATC Marine, Mr Gbolahan Shaba. Engr. Ogbeifun was also actively involved.

Mrs Dabney Shall- Holma

Others were: Technical Adviser to the Managing Director and Chief Executive Officer, NEXIM Bank, Hope Yongo; Executive Secretary, Nigerian Shippers Council, Hassan Bello; Chairperson, Ship Owners Forum, Mrs Margaret Orakwusi; President, Nigeria Shipowners’ Association (NISA), Alhaji Aminu; and Former Assistant Comptroller-General of Customs, Bashir Abubakar.

Also read:  OGBEIFUN@70: Shipping Mogul adopts low-key Birthday, to Protect Stakeholders

Highlights of Ogbeifun’s address were:

  1. That Nigeria used to be a global player in the shipping industry via the Federal Government-owned Nigerian National Shipping Line (NNSL), along with some private lines, which enabled the country to tap into various opportunities created by UNCTAD years back, but unfortunately, due to multiple factors, this enviable national capacity no longer exists.
  2. He recommended that the national problem could be solved through interaction by all stakeholders including governments at all levels, private sector and maritime stakeholders.
  3. He noted the need for stakeholders to find a way to know why Nigeria has remained in the doldrums amongst the comity of nations in the maritime trade.
  4. Then, he announced that Starzs Marine and Engineering recently signed a contract agreement with an international consortium (companies from Canada and Holland) to commence the expansion of its shipyard. The expanded shipyard will have the capacity to deck vessels of 7,500 tonnage and a length of 120 meters; it will also function as a repair and ship building yard in the country.

The lead paper presentation came from Mfon Usoro, and it was dissected by two sets of panelists; moderated by Mrs Dabney Shall-Holma and Mrs Margret Orakwusi who focused on “Trade Opportunities, Cargoes, and Types of Fleets”, as well as “Benefits and Challenges of Establishing Nigerian Global Trading Fleet” respectively, followed immediately after.  They highlighted the following:

  1. According to Nigerian Bureau of Statistics (NBS), Nigeria’s total merchandise trade (import and export) for 2019 stood at N36.1 billion out of which the maritime transport component accounted for N33.7 billion (97%). A huge potential for the economy of the country.
  2. In spite of the huge potential, no Nigerian flagged vessel carried cargoes of the nation’s merchandise trade in the last 10 years.
  3. Despite its contribution to Agriculture, Energy, Manufacturing, and other identified key sectors, the maritime sector is not recognized as a key economic driver, thus missing out on very vital interventions from the government which other key sectors enjoy. This is contrary to international practice as done by other maritime nations.
  4. There is an urgent need to drive the Nigerian maritime sector as a national development initiative whereby incentives, tax waivers and zero import duties are applied, just as aviation and a couple of other key economic drivers are known for.
  5. According to United Nations Conference on Trade (UNCTAD) (2018), the value of intra-Africa’s merchandise trade was put at $159.1 billion which accounts for 16.1% of the world trade. But Nigeria’s contribution to intra African trade merchandise stood at a distant 6.8%, that’s 10.81 billion of the intra Africa trade volume, leaving a huge market gap to be explored.
  6. Though 726 ships are registered under Nigerian flag (400 captured by NIMASA), 265 ships owned by Nigerians are carrying foreign flags. This connotes a need for an urgent review of the activities of Nigeria’s registry.
  7. The deadweight of the Nigerian owned ships with foreign flags was put at 6.485million ton compared to those carrying Nigeria’s flag, which was put at 4.526 million tons. It proves that the larger vessels owned by Nigerians prefer foreign flags: a cause for concern.
  8. There’s a need to come up with a deliberate maritime development plan for Nigeria’s fleet to seize a sizable market chunk of Africa’s merchandise trade within the next 10 years.
  9. There’s an imperative for government to prioritize ship ownership under the Nigerian flag, deploying the necessary incentives in order to make Nigeria’s registry attractive and to bring it to international standards.
  10. It’s equally important to develop the maritime support industries like technology, innovation, academia, finance, law and vital infrastructure like ports and ports connectivity, as well as cargo handling activities, amongst others.
  11. A holistic government approach was recommended, such that ministries of government, departments and planning agencies will collaborate with the maritime sector to integrate it into national policies and programmes.
  12. There’s a need to institute a mechanism for implementation and monitoring of proposed policies for developments in the maritime transport sector.
  13. That the Federal Government must ensure the inclusion of maritime development programmes in the planned Vision 2050, having left it out in Vision 2020
  14. The floating of the proposed national fleet would boost revenue, provide job for the teeming population and improve the nation’s foreign reserve, which would ultimately buoy economic activities.
  15. The Federal Government should actualize the National Transport Policy and set up the integrated transport policy coordination committees at different levels to drive the strategy implementation.
  16. The need for maritime practitioners, financial institutions and even organs of government to continually collaborate and brainstorm to chart ways forward via symposiums like this was re-emphasized.
  17. That national fleet development must be promoted, while cargoes must be generated with improved vessel turn around time, in other to create efficient maritime operations.
  18. That Nigeria is now ranked 35th in the ship owning nations and it should leverage this recognition by the United Nations Conference on Trade and Development (UNCTAD) to explore the global opportunities, making sure it doesn’t lose it anymore.
  19. There is an urgent need for Nigeria to have a base that will cater for acquisition and repairs of vessels, such that ships will no longer be taken to neighboring countries like Ghana.
  20. Nigeria needs to invest more on tanker vessels and change its crude lifting term from Free On Board (FOB) to Cost Insurance and Freight (CIF) in other to optimize the benefit of being a crude exporting country. The government paid N9.1 billion to shipping lines in 2015.
  21. Duties charged on vessel imports by Nigerian Customs Service seems too high when compared to other maritime nations, thus posing a major challenge to shipowners. This needs to be reviewed.
  22. Government should not get involved directly in the business of shipping, but should focus on appropriate regulations and provide incentives to move the industry forward.
  23. The nation’s manufacturing, solid minerals and production sectors face huge logistics infrastructure constraint, hence the need for government to integrate the maritime transport sector into its policies and programmes.
  24. NEXIM is working with AFREXIM bank to help the industry with necessary instrument that would make Nigeria a maritime nation.
  25. The need for maritime practitioners, financial institutions and even organs of government to continually collaborate and brainstorm to chart ways forward via symposiums like this.
  26. The need for stakeholders to form consortiums, develop capacity and purchase useful vessels that can attract cargoes as against mediocre purchases of old vessels!
  27. Government should expunge contrasting policies that hinder development of the maritime transportation sector.
  28. Willing investors should note that opportunities abound for offshore supply vessels amongst others, and more opportunities will be created when Dangote refinery, as well as other marginal refineries come on stream.
  29. Opportunities for cargoes exist in the LPG space as Nigeria’s consumption has since spiked since the Federal Government’s commitment to policies on gas commercialization in the decade of gas.
  30. Opportunities exist for vessels that will explore RORO and General Cargo in order to clear congestions at the port; and, there’s an urgent need for the right incentives for these activities to be put in place.
  31. The Nigerian Fleet Implementation Committee is working relentlessly to ensure that the fleet agenda is sustainable.
  32. Nigeria is missing a lot in human capital development, which has had negative effects on the economy. It should therefore take bold steps to train the younger generation to take up jobs in seafaring.
  33. There is a need to strengthen the security on Nigerian waters, as pirates activities on the waterways hinder smooth sailing to Nigerian ports and attract war risk charges.
  34. More ship-owning companies should take advantage of the capital market in raising fund.
  35. The shipping sector is dominated by foreign operators. There is need for the nation to build local capacity and provide for adequate funding to support the sector.
  36. The delay in disbursement of Cabotage Vessel Financing Fund (CVFF) is hitting hard on the industry and NIMASA should fast track the process.
  37. There should be concerted efforts to encourage women to participate in the marine sector.

Mrs. MARGARET ORAKWUSI

Conclusion:

Much of what we use and consume in our everyday lives either has been or will be transported by sea, in the form of raw materials, components or finished articles.

Whether through export or import, wet or dry cargo, having several of Nigeria’s sea-going fleet will bring numerous attending benefits to the nation’s economy and its people.

With the opportunities in global trade, showing a spike in value – from 6.45 trillion US dollars in 2000 to 19 trillion US dollars as at 2019, the Nigerian economy will be well prepared and diversified enough to absorb the imminent shock from global energy transition should it recognize the dollar-spinning potential in its maritime transportation and treat the sector as a key economic driver.

 

About the author

Maritime First