It is only in Nigeria that the maritime industry does not enjoy government incentives

In the wake of the fall in the prices of crude oil, which is the mainstay of the nation’s economy, President, Nigeria Shipowners Association (NISA), Capt.Niyi Labinjo in this interview speaks on the urgent need for the federal government to diversify the nation’s economy by developing its maritime sector. He also speaks on the challenges confronting Nigerian ship owners, among other issues.




What effort are you making to correct the imbalance in the transportation of crude oil and other cargo between Nigeria and her trading partners?

At the last presidential retreat, a committee was set up and NISA participated actively in the committee and of course, we made it known to the government on the need to change the transaction mode of the Nigeria’s crude oil.

Nigeria is one of the only countries in OPEC that is still selling its crude on Free on Board (FOB); with that we are not adding value. Angola for example after 45 years of war, came out of the war and went into exploration and production of oil and gas and they don’t do FOB. So the time has come and that time is now that Nigeria must and have to change our transaction mode from free on board to cost, insurance and freight. That way we would be adding value because we will get value for the insurance and freight.

You have heard me say this many times; before 1976 the entire insurance companies in Nigeria had only 316 employees but because of the government of the day’s position that all insurance policies must exhaust the insurance available locally before they will ship anything abroad, between that time and 2012, the business of insurance increased from mere N16 million to N16 billion and from a mere number of employees that you can count on your finger tips to over three million employees.

The current situation in the country where it is said to be in recession, which is as a result of the slide in crude oil practices, calls for a special reaction by all Nigerians especially those of us in the private sector. It means Nigerians must first and foremost look inwards for services and goods locally available and consume them and reduce our import. So we have no option than to encourage the growth of our own economy and we have to patronize our own goods and services. That is the way out. That is the only way we can mitigate the effect of the current recession.


You are an advocate of incentives for ship owners. What incentives you expect from government?

As a Nigerian ship owner, I should not be subjected to the same level with a foreign vessel. There should be a discretionary premium on payment for cost of visiting our ports. Another that is commonly done is the issue of taxes. It is only in Nigeria that the maritime industry does not have any tax incentive. Aviation, agriculture, housing and manufacturers all have incentives and none of these sectors is as big as maritime aside the oil and gas. If after a hundred years of our existence as a country, we are yet to get our maritime policy right, then something is wrong with us. It is not because we don’t have the good laws. We have very fantastic laws. The Cabotage law is one of the best, NCD (Nigerian content development) law is fantastic, Nigerian Merchant Shipping Act, NIMASA Act, very good, so what is our problem?

Recently, I called my colleagues in India, Greece and in Turkey; I was sharing with them and said what do they do to foreign shipping companies who flout their cabotage law? I got a very interesting reaction that it is unthinkable that a foreign ship would come and take over their cabotage trade because they would not. But here in Nigeria, all of that is not happening. First, from when you enter brown water, your first level of contact is either you are talking to the Nigerian Navy or a coast guard, that is the first person that will see you when you enter the brown water, that is the water very close to Nigeria which signifies you’re entering into Nigeria, then there is a second level and that level is NPA because if a ship is destined to come to Nigeria, it must have an agent in Nigeria, that agent will take all the papers of the ship which will include details of the name of the ship, the crew list, the flag of the ship, the cargo it is carrying, where it has carried it from and where it is going to discharge, to NPA. If for example a ship is loaded from Port Harcourt and is coming to Lagos, immediately, NPA should know that it must be a Nigerian ship. However, if it has a Nigerian registration but the crew list are Indians, there should be a red flag and all NPA needs to do it to communicate to the appropriate channel.  But is all of that happening today? Don’t ask Capt Labinjo why it is not happening. You should ask somewhere else.


How optimistic are you that your dream of incentives for ship owners and Cabotage law being implemented fully will be achieved in your tenure?

That is why I am elected because I am optimistic. Not only being optimistic but because I am going to do and you will start seeing it.


After the NISA election which brought you in as President of the association, some of the elected executives including the fist vice president, Mrs. Margaret Onyema-Orakwusi have resigned their positions. Doesn’t it look as if most of your executives are not ready to work with you?

Well, there is nothing I can do about it if anybody resigns his position as an executive. If the association elects somebody and the person chooses not to want to serve the association, it is well and good because it is not a paying position and none of us is paid by being President or holding any position. It is a call to service by all of us and what are we doing, we are protecting our investment. Ours is an association that is out to promote ship ownership, ship management and to do maritime advocacy. So, if anybody puts himself forward to serve in the leadership role of the association, well and good but if the person now says I am not very interested in working it is also a decision. The thing that is most paramount to me is that I want to make sure that we bring back our jobs that have been taken over by foreigners and deepen our organizational structure and drive away the foreigners. We have also set up a reconciliation committee to approach them and find out what the issues are and to resolve them if there are issues at all because there are times when there are no issues and people just feel they don’t want to serve because they are pre-occupied with other issues.


What are your expectations for Nigeria Maritime Expo, NIMAREX 2015?

We expect in NIMAREX 2015 to see more participation by shipping services providers, maritime service providers, original equipment manufacturers, shipyards and dockyards. That is what we are expecting in NIMAREX 2015. We are going to have more participation by shipping companies, that I am certain of. Secondly, we are going to have all those who participated this year to also participate. There has been a kind of consistency with that. If you also listen to my charge [during the inauguration of the NIMAREX 2015 planning committee], I charged the committee to go further to the field and get more people and original equipment manufacturers to participate. I have also been talking to some Chinese interest too who want to know what they can do so that they can also participate.


What impact has the past editions of NIMAREX made on the industry?

It has created awareness and you must remember, this is just the fifth edition and from the reports and feedback, the event has been gathering momentum year in year out.

The 2014 edition was described as a very successful one and I hope that 2015 edition will be a more successful one. It has created the necessary awareness of the industry. For example in 2014, we had over 1,500 visitors whereas the earlier edition, there were less visitors and businesses. We also look forward to more businesses being transacted in 2015. That is the message we shall be taken to all the service providers.


Apart from those that showcase their products this year, who are your prospective exhibitors that we should be looking forward to next year?

Firstly, we are looking at all those who participated this year to also participate. There had been a kind of consistency and I have charged the committee to go further more at field and get more people, more original equipment manufacturers to participate. I have been talking to some Chinese shipping interest too, who want to know what they can do to participate.

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