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‘Ship owners lose N1trillion annually’

By Udeme Clement
Mr. Bolaji Akinola  is a maritime consultant and the chief executive officer, Ships & Ports Communication Company. He speaks,  in this interview, on the economic implications of the delay in the disbursement of the Cabotage Vessel Financing Fund (CVFF) and what the Federal Government should do to revamp the maritime industry for greater growth.

Bolaji Akinola

The maritime industry which ought to be a tangible source of income for the economy has suffered a major set back in the last 50 years. What measures do you think government should put in place to resuscitate the industry for greater productivity?

The problem with the sector is essentially the enthronement of mediocrity. The missing link is the absence of political will to do the right things. Those in policy formulation know precisely what to do to unleash our maritime potentials for the well being of our nation and its economy but they certainly are not willing to do it. They do the wrong things at the right time or the right things at the wrong time.

Look at our maritime administration. What should be the primary considerations for appointing the executive management team of NIMASA? Merit, simple and short. But you and I know that merit has been sacrificed on the altar of political considerations. People who manage to find themselves in there come in as a result of intrigues and power tussle and at the behest of one godfather or the other. And this is supposed to be an agency made up of professionals.

At the end of the day, every successive management team at NIMASA, rather than concentrate on shipping development and boosting local tonnage end up junketing about trying desperately to remain in office.

So how do you expect growth in the maritime industry under a situation like that? Well to answer your question; what government should do first and foremost is remove politics from appointments. Appoint professionals only and give them free hand to operate.

Revamping the shipping sector is as easy as ABC if we are willing to get it right. It is not rocket science. What is the big deal here? This is what I really don’t get. Let the various agencies be manned by professionals and let them faithfully implement the cardinal objectives of their agencies.

Imagine if we faithfully implement Cabotage law and stop passing buck over it. That way the indigenous ship owners will have jobs, they will employ Nigerians, they will eventually have enough money to replace their ships with new ones and even buy more ships because the demand for coastal shipping services will expand. And what is there in implementing the Cabotage law? No Nigerian vessel should be allowed to sit idle on Nigerian waters while foreign vessels have a field day on our waters. Period.

Movement of petroleum products and other goods within our territorial waters; that is from Lagos to Warri to Calabar to Onne to Port Harcourt etc must be done by ships owned and crewed by Nigerians. Let us start from there and see what will happen within a year. There will be an explosion of wealth I tell you.

Look, forget about whether the vessel is 50 years old or not. In as much as it can move from one place to the other with endangering persons and cargo, it is good enough for now. When these guys make enough money, within months you’ll begin to see new vessels all over and before you know it they will even begin to buy ocean going vessels. Gradually after two years, Nigerian shipping firms will be able to fully lift the nation’s crude.

All we need is some level of patriotism and political will to do it. The cargo we talk about here are even government cargo and cargo owned by Nigerians. So what is the big deal in making Nigerians carry it and helping them to do it right?

What role should banks play in helping local investors to harness enormous resources that abound in the shipping sector?

In my opinion, the banks will naturally play their roles if operators and the regulators get it right. The banks have money and they are eager to lend it for profit and of course they want to be sure that their money plus interest will return to them.

Banks will naturally want to do their business and we do not begrudge them for that. My only appeal will be that they consider giving loans with longer tenor and single digit interest rates to the shipping sector. Investment in the sector is long term and due to the global nature of shipping business, our operators must be able to access funding under conditions that will enable them compete with operators in other parts of the world. Banks should also understand that a ship is a collateral in itself so this idea of asking ship owners to bring the documents of their property as collateral is rather abnormal.

What is the economic implication of incessant removal of NIMASA CEOs on the maritime industry?

The implication is enormous and of course will adversely affect the industry and by extension the entire Nigerian economy. Policy inconsistency will result from such incessant changes. Even implementation of policies will continue to suffer as it has done in the last three decades.

For example, look at the purported implementation of the Cabotage Law. For seven years, we have been dancing on the same spot like Atilogun Dancers. Plenty motion but no movement. Also look at the planned disbursement of the Cabotage Vessel Financing Fund (CVFF). They have set disbursement dates three times by themselves and failed to meet it. I think we are not serious. The implications are legion and detrimental to the Nigerian economy. Nigerian ship owners are believed to be losing an estimated one trillion naira annually to this poor leadership issue.

Between August 1, 2006 and today, NIMASA has had five CEOs. Five CEOs in four years! That is pathetic and should give any serious minded practitioner cause for worry.

How much do you think government should invest in the sector to foster rapid growth?

We are in the era of private sector led economy, so I will not advocate any direct financial investment by the government in the industry. What I will rather suggest will be for government to create the environment for private enterpreneurship to thrive. Our government has done well by enacting the right laws such as the Cabotage Act, the CRFFN Act and the Nigerian Content Act.

These are very good laws and I’m sure with strict implementation of these laws, the maritime industry will experience a boom. Government should also play its own part in the concession agreement with terminal operators. Most of the operators are investing heavily to uplift port operation in Nigeria and they deserve all the support and encouragement they can get from government.


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