By Gerald Chidi

THE establishment of the Nigerian National Shipping lines Ltd was borne out of government deliberate policy not only to participate in the invisible earning sector of the economy but also as part of its economic independence from the colonial masters and the creation ofthe country’s distinct image.

The Company therefore came into being through a Private members Motion in the Federal House of Representative in 1958 and 1959 calling for the establishment of a Government Shipping line that would carry the “country’s flag to all the seas of the world.” After the motion was passed into an Act of Parliament in 1959, the Federal Government then incorporated the NNSL with the following Object Clauses:

1. To project the good image of Nigeria abroad by flying the Nation’s flag on the High seas and world seaports.

2. To promote the acquisition of shipping technology by creating and diversifying employment opportunities in the shipping industry.

3. To improve the country’s balance of payments position by enhancing the earnings and conservation of foreign exchange.

4. To assist in the economic integration of the West and Central African sub-region.

5. To support the Nigerian Navy in the event of conflict.

From the foregoing object Clauses, it could be said that profit motive, though implied, was not the motivating factor for the company’s establishment.. One has to understand the mood of the major political players at the time to appreciate why “showing the nation’s flag to the world’ was a major focus.

The ships were indeed expected to play the role of” Ambassadors” for the emerging independent country. Arguably, NNSL achieved most of its major objectives as envisaged by the founding fathers before its liquidation which I personally consider ill advised and very unfortunate.

The Company was incorporated with an Authorised and Fully paid-up Share Capital of N4 million (four million pounds sterling) held jointly by the Federal Government and two non-Nigerian shipping lines, namely Elder Dempster lines Ltd and Palm line Ltd both British which were technical partners. The Federal Government held a Controlling Share of 51% while the two technical partners had 49% between them.

In 1961, either in the euphoria of political independence or selfish interest of the Nigerian Management of the Company, the non-Nigerian equity holdings were bought out rather prematurely and the Company became wholly owned by the Federal Government with Nigerian Management in total control. The company, however, had a small office in liverpool in the United Kingdom wholly manned by British personnel for fleet management which included technical ship maintenance and commercial programming.

Elder Dempster lines were also General agents in the UK which provided the major ports of call. The Company started operations with four second hand vessels in 1959 and this increased to 15 vessels by 1971 but at that time the ships were already becoming old and unable to meet the challenges of modern shipping.

The Federal Government then decided to retonnage the fleet with 19 combo vessels but by the time the first of the new ships was delivered in 1976/77 changes in ship technology and containerisation concept had taken place and unfortunately all the 19 ships were the same type – combo vessels.

Diversification in ship type, size and the evolving technology could not be reflected in the “new” ships due to inflexibility in Government policies as it was the Government that provided the fund. This situation ultimately played a part in the failure of the Company.

When the 19 new vessels were introduced into service, there was no working capital. Even the initial bunkering of the vessels at the builders’ ship yard was done on credit. But the situation was managed because in 1973 NNSL incorporated a subsidiary company known as NIGERLINE (UK) Ltd based in Liverpool, England.

The subsidiary company acted as General Agents in Europe to NNSL. The subsidiary company employed experienced and knowledgeable British shipping technocrats in the field of marine engineering for fleet technical maintenance as well as commercial/operations, etc. even though a Nigerian was the Head of the subsidiary company.

That subsidiary Company was trusted in Europe by creditors and shippers alike. The Company was a training ground for training Nigerian officers and in particular for the co-ordination of sea officers training.

One notable advantage of this arrangement was that apart from performing agency services for the parent company- NNSL – and earning agency commission which was hitherto paid to Elder Dempster Lines, the outfit was supervising ship repairs and making sure that the right work ethics were maintained resulting in reasonable ship maintenance costs and seaworthiness of vessels.

However, when civilian government returned to the country, in 1979 interest groups within the Lagos-based management began to criticize a situation where decisions on ship repairs/maintenance was not totally controlled by Lagos Head Office even though all major repairs for strategic and economic reasons were carried out in Europe.