How coastal shipping in Nigeria became dominated by foreigners
Captain Emmanuel Iheanacho, the former Minister of of Interior and former Vice President of the Shipowners Association of Nigeria (SAN) has expressed concerns that Indian, Greek and Lebanese expatriates are dominating Nigeria’s coastal shipping business. According to Iheanecho, this contradicts the Coastal and Inland Shipping Act (Cabotage), which endeavours to protect and profit Nigerian citizens who own ships.
The Cabotage Act states, “A vessel other than a vessel wholly owned and manned by a Nigerian citizens, built and registered in Nigeria shall not engage in the domestic coastal carriage of cargo and passengers within the coastal territorial inland waters, or any point within the waters of the exclusive economic zone of Nigeria.”. Foreigners are not excluded from doing business under the act, but can only do so under the observation of certain ‘waivers’.
Mr. Emmanuel Ilori, the Publicity Secretary of the Nigerian Indigenous Shipowners Association credits the demise of the National Shipping Line as the reason foreign dominance in the coast has attained its current status. According to him, other indigenous shipowners tried to fill the void created by the National Shipping Line, but their efforts were truncated by the activities of the foreign firms in collaboration with international oil companies (IOCs).
Nigerian shipowners have approached The Nigerian Maritime Administration and Safety Agency (NIMASA), the government, the Nigerian National Petroleum Corporation (NNPC), and IOCs to help salvage the situation to no avail. Indian freight ship operators are costing the country up to N1 billion for the purchase of ships, which is revenue that could be generated for Nigeria if ships were built and bought locally.
Limited access to funds to support their business is a major challenge that indigenous shipowners face, in comparison to the foreign operators. The difficulty in securing loans in Nigeria has made it easier for the competition to control the shipping industry. The Cabotage Vessel Financing Fund (CVFF) was introduced in the Cabotage to promote the development of indigenous ship acquisition. NIMASA was charged with collecting and administering the funds, but this provision in the Cabotage has seen neither action nor attention.
As a result of a lack of financing, Nigerian shipowners are left with deteriorating ships which the oil companies and other business providers refuse to work with, and this further edges them out of business, making more room for foreign domination.
Failure to enforce the policies listed out in the Cabotage have proven detrimental for the indigenous shipowners, but the biggest thorn is found in the inclusion of the waiver for foreign owned vessels. This is because, most of these foreign ship operators usually engage in transportation without obtaining a waiver, leaving Nigerian shipowners very poor.
Earlier this year, in April, reports indicated that the Federal Government loses N1.8 trillion yearly by not doing business with indigenous ship chandlers. This loss constitutes almost half of the federal budget, which indigenous ship operators, if empowered, could put back into the Nigerian economy.
According to the former Director-General of NIMASA, Mr Temisan Omatseye, for Nigeria to eliminate foreign domination, it needs to have a clear cut vision and good policy implementation and demonstration.
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