The management of the company was changed as often as Transport Ministry officials liked. Every NNSL Managing Director who was seen as uncooperative by the Ministry officials soon found himself in the labour market.
Frequent changes in the management were not for the right reasons and management programmes for turnaround of the shipping line were not given due consideration. The company and government could not react without delay to situations dictated by market and technological changes or development in the trade.
For instance, it took the Federal Government almost five years to approve the tonnage expansion programme and modernization of NNSL ships in the seventies. Perhaps the post civil war demands contributed to this. By the time the vessels were eventually built and introduced into the market, a measure of obsolesce had set into the original concept. It took another five years to convince the government about the need to phase out the 19 combo vessels with a view to introducing appropriate vessels that were technologically up to date as well as meeting market demands. Other decisions such as rationalization of staff were dictated by government policies rather than sound business arguments.
Another major factor which compounded NNSL’s woes especially in the 1980s and 1990s was that services performed for other arms of the Nigerian government by the company were not paid in time. Such services rendered by NNSL vessels to government were paid for in local currency while the company racked up operational expenses incurred in foreign currency.
NNSL ships played vital role in moving troops and materials into Liberia during the operation of the Nigeria-led Economic Community of West African States Monitoring Group (ECOMOG) which was established in 1990 to restore peace to Liberia during its civil war. Not a dime was paid for this service.
Accumulated debts of NNSL to trade creditors originated from government’s failure to pay NNSL for the shipment of government project materials such as Aluminium Smelter Company, Ajaokuta and Alaja Steel projects. Efforts made by the management of the company to diversify into ancillary activities such as terminal operations, clearing & forwarding, oil tanker operation, etc were not approved. Regular changes in the headship of the Federal Ministry of Transport and the company brought inconsistency in the focus and vision of the Company.
Former leaders of NNSL that I spoke with agreed that government interference was a major stumbling block for the operation of the company. It was government interference that led to the exit of Oyesiku at a time his experience was needed most in 1968.
Gerald Chidi said that during his tenure as the Managing Director of the Company from 1990 to 1993, he worked under four different Ministers of Transport while his successor who served for only two years from 1993 to 1995 also served under four Ministers of Transport.
Certainly, every Minister came with his own agenda and ideas on how to run the ministry with its parastatals which included NNSL.
“In some cases, changes in the headship of the company were engineered by officials of the Ministry (not necessarily by the Minister) for selfish reasons. It is this type of situation that a one-time Chief Executive of one of the parastatals who happened to be a retired General of the Army had in mind when he once said that the relationship between the Supervisory Ministry and its parastatals could be likened to that of a military commander who sent a platoon of soldiers to capture a location and also deliberately sent another platoon of his soldiers to ambush the other platoon to ensure a failure of that assignment. This analogy is very apt.”, said the former NNSL boss.
NNSL was doomed.
Nigeria and other developing countries had been encouraged by the United Nations Conference on Trade and Development (UNCTAD) to set up shipping lines. UNCTAD went further to set up the 40:40:20 cargo sharing formula to ensure that shipping lines of developing countries were not muzzled out of existence but not even this could save the Nigerian National Shipping Line from collapse.
A 1987 study of NNSL for the World Bank compared results to the benefits that the UNCTAD had estimated would come from entry of Nigeria into shipping. The findings were that the investment had made no significant contribution to Gross Domestic Product, employment, the balance of payments, exercising countervailing power, national security or the country’s image. The gains had been less than the opportunity costs of the resources used. Former NNSL employees however, disagreed with this position.
As at the time it was drafted into the ECOMOG Liberia mission in 1990, NNSL was already in deep financial mess. Several of the company’s vessels have been seized in different parts of the world for alleged breach of contracts and unpaid bills.
In 1994, late Head of State, General Sanni Abacha approved the direct injection of cash into NNSL to enable it pay its creditors and secure release of some of its ships. The late dictator approved $45 million and another $20 million for NNSL but as a matter of fact, this act pushed the last nail into the company’s coffin. This was so because of avarice of some officials who colluded with outsiders to defraud the company as much as they could.
By early 1995, all of the vessels owned by NNSL had either been sold as scraps or downright shipwrecked without any hope of redemption.
In September 1995, the Minister of Transport, Major General Ibrahim Gumel shut down the operation of the Nigerian National Shipping Line, NNSL after 36 years. He appointed Captain Cosmos Niagwan as Liquidator of the company. The various controversies and allegations trailing the liquidation exercise are worthy of being the subject of a separate article.
It may be worthwhile to note that NNSL’s partners also had problems of their own. Palm Line sold its last ship in 1986; Black Star Line of Ghana packed up in 1998 while Elder Dempster passed into history on 8th May, 2000 when its operation was officially wound up.
And yes, both General Abacha and Major General Gumel died in 1998; Abacha in June and Gumel in December.