Foremost maritime lawyer and former President of the Nigerian Bar Association (NBA), Dr Olisa Agbakoba, speaks with SHIPS & PORTS Tosin Aribisala on sundry issues concerning the maritime industry.
How would you assess the development of the Nigerian maritime industry especially with regards to indigenous shipping?
It is very poor obviously. The participation of the indigenous actors in the maritime industry is very minimal and I think the key reason is the lack of regulatory encouragement and sometimes, probably it is also as a result of a lack of awareness by the government as to what this industry could provide in term of Gross Domestic Product (GDP). This is because we are faced with the difficult challenges of resources and revenue. Suppose the government would focus on those areas where it can maximise revenue, our ports would have been modernised. And the maritime industry is one of the critical sectors where the government can maximise revenue but it is not looking at those areas. In both the National Development Plan that just expired and the new one, which spans from 2021 to 2025, there is not a place where the maritime sector is mentioned. The maritime sector can generate seven trillion naira a year, which is what I believe, but the government is not concerned about that. Many international agencies particularly Dinama in the Netherlands estimates that the potential revenue that can be generated in Apapa port, if it is efficient, is N20 billion a day but looking at it, no one is ready to come to Apapa port. This is because Apapa port is technically dead. So you have traffic diversion to Ghana. The cost of use of this port is way too high. The infrastructure is decayed and the cost of doing business is just too high. These have made Nigeria an unfriendly nation in terms of maritime activities. And that is what I thought the government should have used policies, regulations, laws to correct but it is not happening. Therefore, the big challenge government is facing in terms of revenue and jobs are losing the potentials that the maritime industry can bring.
The issue of Cabotage compliance is a little aspect of a broad range. I can give you two. In the chain, crude oil is just one of the 34 different entities in the chain. The government does not even realize that there are other value chains. If you bring crude, which the government has given to Shell, but the government has no interest in other aspects like shipping, banking and insurance. We have about a thousand oil rigs in Nigerian waters upstream but they are not paying taxes. NIMASA has tried. What they did was to run to court to block that revenue source. So, you ask, why is the government not assertive about this maritime industry? Look at the maritime zones act, we have up to 200 nautical miles but by United Nations convention, looking at one of the clauses, Nigeria is one of the eight nations that is authorized to extend its maritime waters 150 miles further in from the 200 nautical miles limit.
It is unfortunate that in my 40 years of interaction with the government and its agencies, there is no corresponding interest in understanding that the maritime industry is huge, especially now that oil and gas are moving away from the center stage. The state of Apapa shows you the level at which the government is interested. If the government is interested, they can transform Apapa in a matter of six months, putting in all the rails, all the roads so that movement of cargoes becomes easy. They would have invited the private sector. Nothing says that the government must be in charge of the ports.
You were part of the making of the Cabotage regime in Nigeria. How would you assess the implementation of Cabotage law 18 years after?
It is not working. When we started Cabotage in 2004. There were probably about 5,000 vessels that are foreign but now, there are about 25,000. So, it is not working and what that means is that it is discouraging indigenous operators from entering into the business. The reason why I love Donald Trump and now Joe Biden is that they take immediate steps to deal with problems. So, when Trump and now Biden saw that there was a challenge, they immediately responded by legislation. Here, we don’t have that executive proactiveness to say let us deal with this issue now. So I’ll propose to my colleagues that it is something we need to call the attention of the President to, by preparing an executive order and requesting him to implement Cabotage and directing all the relevant agencies to absolutely implement it. What does that mean? It simply means any vessel that does not comply and it’s not carrying a waiver exception cannot come here. If you get to the United Kingdom without a visa, you can’t get in. So, the Cabotage is equivalent to a marine visa. If you don’t have a marine visa, you can’t get in. Why is it that the government is not saying to those who don’t have the relevant permit or visa that they can’t come here? And I’m tired of hearing this issue of capacity. Capacity means that we Nigerians can do it. We took cognisance of the Cabotage act and we said, yes, there might be some things we cannot do. So in those instances, we can give waivers but not for a supply vessel that is carrying Heineken and chips to Chevron installations which they have been giving out to foreigners. When you say Cabotage implementation, it is not rocket science. We are not talking about big, big things. We are talking about small little things. Who is supplying water to a vessel in the mainstream? Who is doing the ship chandelling work? They are all foreigners. That’s the problem. Let us just even leave the issue of big vessels. We are talking about little content that we can carry. The chandelling business is a very lucrative one. Twenty five thousand vessels; they take on water, take on bunkers; they take on food and medication. But who is supplying it? It is foreign people. That is the problem. And then we say that we have a high unemployment rate. If we have high unemployment, clearly, implementing Cabotage cannot remove that entirely but it can help.
So many Nigerian shipping companies have closed shops despite the Cabotage law. Why do you think this is so? And how can this trend be reversed?
This is because there are no works. If there are jobs to handle but contracted to the foreigners, the indigenous people won’t work. When I came here 40 years ago, it was even better. But right now, the Cabotage act has simply not worked. The state of things is so bad that the only way is what I have suggested to the ship owners to take action. This is because if they sit down and moan, and the government has not done anything, then the only thing they can do is to shout. This would include taking a drastic move towards driving away foreign vessels that are coming here by getting court orders.
The disbursement of the Cabotage Vessel Financing Fund (CVFF) has become a controversial issue 18 years after and the government has not deemed it fit to disburse the fund to Nigerian Shipowners. What’s your take on this?
I don’t know what to say. To be honest with you, I have no idea. From the early one that was there, the Ship Acquisition And Building Fund to this current CVFF, I don’t know. I can’t answer, to be honest with you. I have no idea why the funds are not being disbursed. Probably the DG NIMASA or Minister of Transportation can be asked, but I have no idea. This is because the money is there and when it is supposed to be disbursed, it wasn’t disbursed.
Nigeria lost its bid for election into the International Maritime Organization (IMO) Council for the fifth consecutive time. Many observers and analysts believe that chasing the IMO election is a misplaced priority. The argument is that NIMASA should concentrate on developing indigenous shipping. As one of the leaders of the Nigerian maritime industry, where do you stand on this?
I agree entirely with you. It would be good to be in the International Maritime Organization (IMO) Council but if you want to be there, you have to work hard. The last time we were on it, I and along with other people worked on it until we got in. But it takes a lot of hard work. What we did then was that we understood what we should do. There was a lot of compliance. You don’t just say I want to be in category C. It is called the white list. You’ve got to have the compliance laws. Our laws are archaic. The basic Nigerian law is outdated. So, when the assessors are looking at Nigeria’s application, they are looking at the content of their application. They know that we are not really ready for this. Whether it has become political or not, I don’t know. But I’ll say that just as you’ve rightly pointed out, if you ask me between being on the list and building up Nigerian maritime capacity, I’ll rather build up Nigerian maritime capacity. I’ll see that as a luxury. Let us build the capacity. I used to say to a lot of the DGs of NIMASA that what you need to do is to help build the maritime infrastructure – both the hardware and the software. That was why the DG of then NMA in 1989 or so supported my law firm to establish the Institute of Maritime Studies at the Lagos State University (LASU). On the hardware part, it is the duty of government and the maritime agencies to assist Nigerians to upgrade their capacity so that they can own vessels. That is not taking place now and that is why we find the continuous talk of no capacity.
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