National shipping carrier: Revisiting another failed venture

National shipping carrier: Revisiting another failed venture

Former Minister of Transport, Rotimi Amaechi, stirred the hornet’s nest as he was leaving office early last month. During a valedictory meeting with maritime stakeholders in Lagos, he placed the blame for the failure of the efforts to establish another national shipping carrier on the doorsteps of Nigerian shipping operators. Amaechi, while regretting the failure of the venture, said the failure was caused by Nigerian ship owners who could not raise the 60% equity stake allotted to them.

The accusation did not go down well with embattled Nigerian ship owners who had been bottling their anger and frustration. Without wasting time, the Secretary-General of the African Shipowners Association, Funmi Folorunsho, retorted that the venture failed because the federal government lacked the political will and courage to establish a national carrier for the country.

She told the minister that establishing a national fleet goes beyond setting up committees, without addressing some inherent challenges facing the indigenous ship owners. She buttressed her statement with Ethiopia, asking why Ethiopia, a landlocked country has vessels while Nigeria cannot have a vessel. Answering the question herself, she said: “It is because there is a strong political will that every cargo that is Ethiopian must be carried on an Ethiopian vessel,” adding “you have done quite well as Minister of Transportation, but I think the political will for a national fleet development in Nigeria is still not there.”

Folorunsho’s statements which represented the feelings of her members at the gathering conveyed the message to the former minister that the stakeholders were of the opinion that the government lacked not only the political will but also the commitment to establish a national carrier. Of course, the minister did not like this, and promptly described it as unfair to the federal government.

But between the ship owners and the minister, who is right and who is wrong? Which party is actually to blame for the abysmal failure of the efforts to float another national carrier?

On face value, one will be tempted to agree with the minister and blame Nigerian the ship owners who could not muster the 60% equity allotted to them, thereby taking advantage of government’s laudable initiative. But the question is: can they really do that without government support? How do they raise the fund if government thinks it is absolutely out of it? Is it from Nigerian banks to which many of them are heavily indebted?  Or is it from business earnings, considering the business climate in which they have been operating?

First and foremost, it is pertinent to state that the whole plan to establish another national carrier was entirely the idea of the federal government. There was no agitation for it from any quarters. In fact, Nigerian maritime operators had forgotten their pains, and licked their wounds after the liquidation of the Nigerian National Shipping Line (NNSL), and the death of its successor, the National Unity Line (NUL). Though sometimes nostalgic, they were not expecting the resuscitation of the national shipping carrier.

But out of the blues, immediately on assumption of office as the Minister of Transport in President Buhari’s first term in 2015, Rotimi Amaechi announced that the federal government was going to establish a national shipping carrier. This announcement was received with mixed reactions. To demonstrate government’s seriousness, the former minister went ahead to set up a committee, which included ship owners, to work out the modalities.

Thereafter, another committee called National Fleet Implementation Committee was set up in 2016, headed by the Secretary of the Nigerian Shippers Council, Hassan Bello. The committee was mandated to actualize the dream for a new national carrier that will fly the Nigerian flag on international waters and provide sea time training for Nigerian cadets.

The committee hooked up with, and signed a Memorandum of Understanding (MoU) with Pacific International Lines (PIL), a Singapore-based shipping line under the terms of agreement that Nigerian private sector operators would maintain a 60 percent equity ratio while PIL retains 40 percent. But after signing the deal, the long wait for Nigerian shipping operators to bring their 60% equity investment to the table commenced. Not being able to do anything, the foreign investor got tired of waiting, and the deal collapsed naturally before it could see the light of day.

But not until another committee had been set up to screen shipping operators interested in acquiring part of the 60 percent holding for Nigerians in the proposed national fleet. Engr. Greg Ogbeifun, former Chairman of the Ship Owners Association of Nigeria (SOAN), who was a member of the committee, was confident that the proposed national fleet will be a reality. He said at a public forum in Lagos that the new national fleet, unlike its predecessors, will be a success. He pointed out that the Minister of Transportation, Rotimi Amaechi, had assured of government’s political will in ensuring that the new carrier was not starved of cargo. Quoting the minister, he said the present government was determined to do everything possible to ensure that the new national carrier succeeded. Part of this resolve was the setting up of a cargo sourcing sub-committee to arrange for cargo for the new national carrier.

But after all said and done, the venture silently collapsed like a pack of cards. Whose fault? Without mincing words, government should take the blame for the failure. If it actually had the political will to see the project through, it should have done everything, including using part of the “untouchable” Cabotage Vessels Financing Fund (CVFF).

One recalls that while announcing government intention to establish a national shipping carrier, Amaechi had shouted it loud and clear that the CVFF would not be used for that. But somewhere along the line, probably after sober reflection, and the inability of indigenous ship owners to raise their 60% equity participation, the minister hinted that part of the CVFF would be used to help eligible ones.

While receiving one of the reports, and before setting up the implementation committee, Amaechi had said, “Investors have given us August as deadline on this issue. And we have said government is going to use part of the cabotage fund in this direction. We must also advise on how to choose who qualifies to benefit from the fund because the 60 per cent that we have must be accessed from the cabotage as part of their equity contribution.” At the same time, he warned the committee members not to allow vested interests in the allocation of the cabotage fund to jeopardize government’s good intention, adding that the exercise should not be at the detriment of national interest.

He ended the admonition with: “I will leave that to the committee, I don’t want to see your private interest because everybody wants to access the fund. The law states that the minister decides and that is why I have said NSC should chair the committee.”

With this, the minister raised the hope that indigenous shipping operators who passed the screening exercise would be aided with the CVFF. But what happened after this pronouncement continues to be a matter of conjecture. The collapse of the project indicates government’s prevarications and double speak in the whole undertaking.

Up to this moment, the CVFF remains a no go area for government and an apple in the sky for indigenous ship owners. With all the assurances of federal government’s seriousness to establish a national shipping fleet, one would have expected that it will do what it said concerning the utilization of part of the CVFF. But that was not done. And after failing to do that, the former minister still blamed indigenous ship owners for not coming up with their own equity participation in the failed project.

It is instructive, however, to note that the DG of NIMASA, Dakuku Peterside does not appear to share the view of the minister on why the project failed. Instead of blaming indigenous shipping operators for the failure, he sympathized with them, noting that it was the recession that made it difficult for the ship owners to take up the 60% equity reserved for them. He told a journalist before the eventual collapse of the project that since the nation just came out of recession, it was quite difficult to mobilize people to bring 60 percent of the funds. He also raised hope by saying that a committee was working on that.

From the foregoing, had the government put all their acts together, had it made efforts to address the challenges of the ship owners, the effort to establish a national shipping carrier would not have failed. One therefore cannot help but agree with Mrs. Folorunsho that it takes more than setting up committees to establish a national shipping carrier. It equally takes more than bold statements and assurances of seriousness to see a project through.

Meanwhile, nobody has told Nigerians how much was spent on the failed project, considering the several committees that were set up, and all the foreign travels in pursuit of the pipe-dream.

 

 

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