National Shipping Line: Putting the cart before the horse

NIMASA DG Dakuku Peterside

Since the liquidation of the Nigerian National Shipping Line (NNSL) in 1995 and the outright sale of its vessels, Nigeria has been on an unending roundabout to establish a new national shipping line that will again carry the flag of the country. All subsequent attempts at floating a national line have met with difficulty and none, really, has been successful. The National Unity Line (NUL) that immediately succeeded the NNSL with one ship was practically a national embarrassment before it was put up for sale in 2005. Speaking on the importance of setting up a national shipping line, the Director-General of the Bureau of Public Enterprise, Mr. Alex Okoh told the Director-General of NIMASA, Dr. Peterside Dakuku that the assessment of BPE shows that the only tangible asset owned by the National Unity Line is the operating license. In other words the NUL is dead. Sadly, the absence of a national shipping line has cost the nation billions of dollars. According to the Group Managing Director of the Nigerian National Petroleum Company (NNPC), about $6,165,800,104 was paid to foreign ship-owners in 2015 alone because the national oil company transacts crude oil on Free on Board (FOB) basis which allows the buyer choose who carries the products unlike Cost, Insurance and Freight (CIF) that allows the seller determine who carries the product. If Nigeria had a national shipping line, NNPC would have changed from FOB to CIF thereby patronising the national carrier. Additionally, the absence of a national line has affected the training of Cadets who find it difficult to have sea time experience that is required for the issuance of the highly coveted Certificate of Competence (CoC). The foregoing shows how important and gainful a functional national shipping line is to the growth and development of a nation’s maritime industry.

In spite of all these positives around a national shipping line, one wonders why Nigeria has not been successful in establishing one. Our failure to have a surviving and functional line 21 years after the demise of the premier line is primarily due to our approach. The government has sustained the quest for the establishment of a national line using the tested and constantly failing strategy – seeking solution abroad. After previous failed attempts, in 2016 the government announced intent to sign a memorandum of understanding with a Singaporean company Pacific International Limited (PIL) for the establishment of a national shipping line. The new establishment was meant to be a private enterprise with Pacific International Lines (PIL) expected to own 40 per cent stake, while private Nigerian ship operators would own 60 per cent. Two years after, reports have it that the government, in addition to other shortcomings, has failed to select the consortium of local shipping firms that will represent Nigeria’s interest in the proposed line. As a result of this and other unfavourable policies of government, PIL has now pulled out of the arrangement. However, the Executive Secretary of the Nigerian Shippers’ Council (NSC), has restated the determination of the government to actualise the vision of establishing the national flag carrier despite the withdrawal of PIL.

What the latest move by the company has reiterated is the deficiency in government’s approach in setting up the shipping line. It will remain a tall order if policy makers and the committee spearheading the idea continue to chase foreign companies to aid the establishment of a flag carrier. It cannot be overemphasised that the most viable option is for the government to empower indigenous companies and ship owners to become more active in maritime business in the country. Currently, the Nigerian maritime space is dominated by foreign ship owners operating with all kinds of waivers from the government yet the few indigenous ship owners in the business are struggling to stay afloat. There is no need looking to Europe or Asia for solutions to our local problems. Why it has remained impossible for us to empower our indigenous companies still remains incomprehensible, in a world where nations are striving to be self-sufficient. Besides, if the government already planned to put together a consortium of indigenous ship owners to own 60 per cent stake in the proposed line, why not simply create the atmosphere for indigenous ship owners to thrive and spearhead the process? The Nigerian private sector has come of age and possesses the capacity to drive development in any sector of the economy provided the government plays its part by creating the enabling environment. We have seen what the private sector is capable of in other sectors. The same can be applied in the establishment of a national shipping line. The starting point remains empowerment of local ship owners; without this the dream of a national carrier may not materialise anytime soon and if it does, it will be to detriment of the local industry. 

Copyright 2017 Ships & Ports Ltd. Permission to use quotations from this article is granted subject to appropriate credit given to www.shipsandports.com.ng as the source.