Captain Anthony Onoharigho Ph.D, is a chartered marine surveyor, ship registrar, inspector, trainer and resource person. In this interview, he aligned his thoughts with other industry players to call for the audit of the Cabotage Vessel Financing Fund (CVFF), but cautioned it can be done after the Fund has been disbursed.

More than that, the former National President of Nigerian Institute of Shipping, and current Deputy Registrar, Liberia Maritime Authority tasked the FG not to release the fund to individuals but to purchase a crude tanker to be jointly operated with indigenous ship owners; to safeguard the sustainability of the scheme.

Capt Onoharigho also spoke on a wide range of industry issues, including the nation’s ship registration, flag state regime, and lamented that NIMASA’s closed ship register is denying the country numerous benefits. Excerpt:

By Eguono Odjegba

Let us talk about the shipping industry, you are aware that recently President Buhari approved the disbursement of THE Cabotage Vessel financing Fund (CVFF), and the announcement has thrown up quite some dusts, as individual ship owners and shipowners associations have taken different positions from asking the audit of the fund before disbursement; and others saying the Cabotage regime should first be restructured to create cargo first before disbursement, etcetera. As a sailor, shipping registrar, inspector, and ship class surveyor, what is your take in all of these?

First of all, I want to thank President Buhari for his high sense of responsibility and initiative of disbursing this funds which had accrued for a long time. I have written and have been talking about this fund, and l remember l have suggested several things about this funds where l have said a number of times that I don’t know understand the modality of the sharing formula. The modality of the sharing discussed initially was that the fund should go into crude oil tanker purchase and not the disbursement of cash to individuals. I was president of Nigerian Shipping Institute, the information reaching me in those days was that the money is much more bigger than the earlier intervention in the 1990s, and that if they decided to disburse the right now, you might end up not having the balance amount and that will be the end of the matter. So I am also thinking that the best to do is for the actual amount to be determined first, so that stories don’t set in.

So is your position that the funds be put in abeyance while the audit is carried out?

Yes, let us know the actual amount that is involved, because right now we do not know the real figure, accountability should not be delayed. What they are giving them now is $350million and that is not what is supposed to be there, because the money has been there for that past years, we know what recently happened at the Office of Accountant General of the Federal, for transparency, the audit report should be released, or are they saying that government have not been auditing the fund? Who are those saddled with the audit, it is not lawful to postpone audit, general elections is by the corner, if the audit report is not released now, people should answer question because after the election, the story will change.

Given your position Captain, what if government says okay, since ship owners and stakeholders are insisting we should investigate what is there first, we are no longer continuing with the scheme, and deploys one government magic to truncate the disbursement, where would that leave the industry?

Well on a second thought, there are two ways to this thing, if we go the first way and wait for disbursement until we know the amount that has accrued, the other government that will come in may take a different dimension and eventually not implement the disbursement at the end of the day, you know our political system still has not developed proper institutional democracy. This fund has been there since the time of President Yar’Adua/Jonathan, which is a long time ago and if you look at the contributions from then until now, the total amount should be more the $350million that has been announced. ln as much as audit is necessary, on a second thought government should disburse what is available. My initial concern was, if they disburse it without knowing the amount there, the money can be diverted because this is election time, many people are looking for money; some are going for campaigns and others are thinking of ways to keep money for their families when they exit their present positions, you know how our office holders treat public funds.

As soon as they touch that money it may end up look like the first ship acquisition fund SASBF that didn’t work. That was what l used as my P.hD thesis topic, some collected the fund and went to marry more wives and took chieftaincy titles.

I think the federal government should set up a committee that will handle and determine how best to utilize the money because if given to individuals to handle we might not get results.

But the FG said it has risk management structures in place to ensure easy recovery

Of course we have always had the risks plans in place, but more only on papers, the SASBF that was mismanaged had recovery arrangement in place, but some who collected it use it to marry plenty wives and the money was never refunded and just went like that. I made a proposal a long time ago that the government and ship owners buy the vessels and run them under joint venture, like a public private partnership (PPP) thing; and they should go for crude tankers, that’s what I have been saying every time.

And when these tankers are bought, what happens to them, distributed to ship owners?

No government should have joint venture arrangement with the stakeholders and the ship owners association, they use the money to buy tankers and then instruct the Nigerian national Petroleum Corporation (NNPC) to deploy the tankers to its loading bays to transport our crude under CIF instead of FOB, I have been saying this every time. For example, look at the aviation industry, we have no airline, and here at the maritime industry, Nigeria has no single ship to lift our product, most of our products are lifted by private individuals who are portfolio ship owners and they are all foreigners. Ninety eight (98) percent of the crude being lifted in this country from my research is by foreigners and the remaining 2% are trading unclean products in our territorial waters. We started our crude marketing with some Asian counties, Iran had about 60 vessels lifting their product some years back and still do so through CIF but we don’t even have a single carrier to transport our crude, and yet we have had very educated and enlightened people operate NNPC for years, l don’t understand why we hate to see Nigeria grow. Everybody is just concerned about themselves and the narrow benefits they get, this is an area that can create huge employment for Nigerian youths and raise our foreign earning power. The minimum number of people one tanker can take is about 40 to 50, if you employ our youths, I assume they will pay them in a hard-currency, they will come back to this country and use the money to buy things in our market and that will increase our GDP in terms of inflow of currency that’s one. Then look at the training of manpower, from the little school we have, I have a Maritime School in Delta State called Carina Maritime Academy offering ND and HND in Marine Engineering, Nautical Science and others. We don’t have where to do sea time training, we have to put most of them on my private class vessels, those people will now be put out on big ships and will now turn out to be master mariners like it used to be when we had the Nigerian Line operating. We had a lot of master mariners, most of them are now old people and some dead now, if you find time go to the Apapa Amusement Park, most of them are there by day time, relaxing.

So you mean there has been no succession plan by the FG all this while?

There was none. It is now the federal government is looking for how they will train people, after Patrick Akpobolokemi’s tenure at NIMASA, I don’t know what Dr. Bashir Jamoh has put in place. I heard he is putting something in place and if you look at it, there is no training for seafarers in Nigeria they just end up at MAN Oron after their OND and HND at the end of the day, there is no class one training, so this crude oil tankers could also address part of the issues; so this is what I’m talking about. Crude is our mainstay in this country and then the second major is transportation of the crude oil. So if we look at it critically, l mean export of our crude which we are doing on free-on-board (FOB), it doesn’t make economic sense, we are losing, because the importing countries pay for crude oil lifting in FOB, and the insurance and cost is paid in hard currency, dollars. You only take the freight, what about the insurance? Most of the insurance you put on the crude oil tankers are non refundable and if they get there without any, and there is hardly accidents, the money is not given back to you, and that constitutes capital flight to our economy.

But Captain how do we deal with the problem of the NNPC that routinely neglect our indigenous ships in preference for foreign class ships with the flimsy excuses that our local ships don’t meet the required specifications?

You see everything in this country is paper work, corruption and greed and lack of patriotism. The person at the top of affairs at the NNPC can be acting for himself and some cartel, but also, he can be taking instructions from the cabinet or presidency and he has no choice but to say this is how we were told to go about this. Like now, why you have that problem in NNPC is that the people that are lifting this product are all within this country, all they just do is get a vessel name and a vessel curate from abroad, they enlist them for crude lifting and collect 10% as a brokerage fee. It is this brokerage fee that is the problem, maybe a probe will reveal more of that, it is very sad.

Which agency has the responsibility to certify ship fit to embark on crude lifting?

The only thing that happens to ship is that if you bring a ship down to this country, it must be classed and if it is classed and you have all the insurance paper in place, you are qualified so to engage in Cabotage trade. The requirement is not by individuals, it is done through the documentation of the vessel and the time of arrival; and most of them that got to this country are classed, you cannot have a ship for many years and not do the classing.

But who or which agency does the classing?

The classing is done by recognized bodies like ABS and others. I also do ship classing, l have a class company that certify vessels and check the vessel’s integrity. But coming to your question, the NNPC has a department that is purely responsible for the verification of the papers of those vessels that comes in and gives them a clean bill. So if you buy a vessel from Nigeria and it is probably classed, that very department in NNPC will be instructed that this vessels are quite new and if the president of the country put his foot down that this Cabotage regime must work and that this new Nigerian vessels must be used, then it will be. The real problem we are facing is that of political will, we have had successive governments simply out to satisfy foreign powers and foreign governments.

So the challenge our Cabotage regime is facing is one of lack of political will?

Yes because many people are benefitting from crude oil lifting wrongfully and illegally. If a foreign vessel comes and they clear it in the benefits, both national and economic goes to foreigners. But if you use the CVFF to buy one or two tankers to bridge local participation on a trial run basis, the cost of having that one ocean going and operating will be coming to Nigeria; because there are many people who own ships, all the people you see today are individual ship owners, and the government has not put in place how they can go into crude cargo lifting from this country on the basis of 40:40:20. That bunker agreement was only for dry cargo at that time, did you hear of anything like tanker that time? And the dry cargo was generated from each local government of each state, so this time around, cargo issues have gone because we don’t have any ship to move them anymore, the rivers are no longer navigable, sand and silt has taken over, they are dead and so that aspect has gone. Nobody talks about us having a dry cargo ship now, what we are talking about is crude oil which is our comparative advantage at the present time. We have that over other countries; let’s buy tanker that will move our crude oil from here to other countries on a PPP arrangement; that is my stand on the CVFF.

As an industry player, how best do you think we can get all ship owners to unite to drive the success of the CVFF disbursement?

I think that the most important issue is to first of all agree on the right type of ship for Cabotage trade. What type of vessels are our ship owners having? All of them you see now that claim to be ship owners do not have any single crude carrier, all they have is small-small tankers and tug boats, that does transshipment from here to there.

Really, but I understand that Engr. Greg Ogbeifun Satrz Company has fleets of cargo ships.

I know him very well, we all started from Oceanic in Port Harcourt, Greg owns tug boats and supply vessels that services in oil company. Greg can buy a tanker, he is close to government, he is a board member of NIMASA, so if Greg can buy a tanker, a VLCC not ordinary tug boats, it’s okay for what we are talking about. I don’t want to go into the local carriers, those are areas that you can buy a few boats and trade internally as a coastal player but I am talking about international trade with our crude oil in which we have comparative advantage over other countries, because our crude both the Brent and Bonny Light has very high value over other products and in high demands in Europe and America. So if we have this product minimum lifing right at about 2million bpd which is okay per quarter, if we have a sort of in-country or national carrier vessels that will lift it for us, we wouldn’t have this issues of not having the freight, we would have been going on cost insurance freight (CIF) instead of doing FOB. With FOB they will go and bring the vessels from abroad, pay us for the rate of the crude oil, and take the cost of the freight and insurance; even the workers belong to the foreign company that owns the vessels. This is wrong and unacceptable; our government must come up with the political will to change the formula.

So foreign ship owners hold a higher economic stake than Nigeria that owns the product, right?

Yes, our crude is being lifted on FOB, assuming you go on CIF, you will make more money both on insurance and freight.

I recall that the Nigerian Shippers’ Council was few years back mandated to look into the FOB and CIF mode which advised Abuja to adopt the CIF model, would you by any chance know what is delaying the implementation?

You cannot adopt CIF model because CIF is an operational, practical issue, you must own a vessel before you can talk about CIF. For example if you do not have a vehicle to carry tomatoes from your farm to a market outside your location, and you need to take the tomatoes to Lagos, you must first get a vehicle to transport it there. The owner of the vehicle that will carry it will be the one to collect the cost of moving the tomatoes from say Jos to Lagos, the insurance company is now the one who will say oga I will insure this your vehicle and I will be responsible for anything that happens along the way. But when you get there safely, you will pay me the insurance cost. That way, the owner of the tomatoes only gets a percentage of the overall gains that he should get if he had a vehicle at least, because in that case, what goes out will only be the cost of insurance, so looking at it, the arrangement is not beneficial to us. Nobody can do CIF in the transportation of our cargo until we own our own VLCC, I stand to be corrected. VLCC is the smallest among the very large crude oil carriers, we have Atman and other ultra model sizes, these tankers are graded according to the tonnage they carry. If we can buy a small VLCC that can carry crude oil to Spain or to China, that’s enough,

Now that you say we don’t have the right crude carrying assets to operate our Cabotage Trade, is the implication that our ship owners can only operate coastal trade?

That was why I said let us buy tankers, we can start with only one VLCC. If I see anybody that can get a VLCC, I will use all my powers to make sure NNPC engages the vessel, why will NNPC pick another foreign vessel when we have one with the same tonnage? If they do, people like us will fight them.

So the first requirement to take back Cabotage Trade is to get the right vessel.

Yes, get a tanker first, hence I was saying operators should discuss with government over the CVFF disbursement, because that money came from the ship owners pocket. If the federal government wanted to go into crude oil lifting, and that money came out of waivers and Cabotage contribution, like if your vessels is coming to work in Nigeria, you pay scapulas fee and that money you pay into the system is what they have been accumulating, and so many vessels prefers to go to pay waivers rather than do flag trade. One vessel in the Liberian or Tanzania flag, I represent many countries…it will take me only three days to get the vessel registered in Tanzania, Cyprus and any other country. But in NIMASA…before now it takes a longer time, so many people prefer to go and get from outside the country and come down to get Cabotage waivers which is not helping us at all. So this money made from waivers should be used to acquire ships not coastal tug boats, no they should acquire ships where the cargo is ready for transport, and call it any name. They can start with only one and if it is well managed, in a question of 10 to 5 years, we will get a fleet out of it, it will multiply and that is how other countries started. After buying one and you see how it perform in terms of benefits, you’ll buy more and then it turns into a fleet and create employment in Nigeria.

Then second part of the advantage of having a tanker, not coastal tanker but international foreign going tanker, let’s say we should use foreigners as they are master of the marine, let them use foreign captains…the Cabotage waivers can allow you to use a foreign captain, the other part of the deal can be covered by Nigerians and much of the benefits will still accrue to Nigerians. If you look again at somewhere else called flag lobbying, those are areas that I am talking about every time l speak to the press, you know each of the vessels go to registration and register a Nigerian flag under NIMASA for international trade. In those days you will see Lagos in all this, they were all calling Lagos, and the Nigerian flag was going everywhere the ship goes and it will raise the reputation of Nigeria. Look at Liberia which does not even have vessels of their own, but people come to Liberia to register their vessels because of confidence and its open registry regime; and you see the Liberia flag everywhere, the name is flying everywhere. If I have the opportunity to be a part of the policy making of this country, my interest first of all will be how I can acquire vessels for this country to develop Nigeria flag.

What is NIMASA doing in that regard?

Well I will say for the one I know very well, I was close to Dakuku Peterside at the time when he was there, you see me in most of the conference NIMASA had with stakeholders, and we were talking about open registry. He proposed it at that time where we will be having deputy registrars in two other countries. You can walk into any of these offices, register the vessels and be ready to come to Nigeria, but what we are running here is a closed registry. There was a lot of argument then, that we will not be able to monitor the kind of vessels, but that will not be an issue if anybody give a report that a vessel has been inspected and is okayed, if there is an error then the person’s integrity and reputation is at stake too, so he will do a good job. But the administration of my friend, Dr. Jamoh did not take up the issue. So presently the ship flag system we operate is a closed registration and it wouldn’t benefit this country as much as an open registration. Another way to look at it is you are removing jobs from local people that should be doing the survey, the inspection, when anyone can just go to the UK and register his vessels hereby indirectly closing the door to potential local jobs. So a lot of things are working against us.