Nigeria @ 55: Why government must pay quality attention to the shipping sector

The occasion of Nigeria’s 55th independence anniversary, celebrated on Thursday last week, provides an opportunity to remind the government of the importance of shipping and the vital role the maritime industry plays in the nation’s economic well being.

All over the world, the maritime sector plays a major role in the carriage of a country’s international seaborne trade, which constitutes 90% of global trade.

Apart from the movement of cargo from one port to another, the sector involves other ancillary services associated with the movement.

Bearing in mind that the comparatively modern system of international exchange and specialization was made possible by the emergence of liner shipping and its regular schedule from port to port, the call for more investment and government attention to the maritime sector has become imperative.

Nigeria is a cargo owing nation and generates more 70% of the cargo throughput in West and Central Africa.

Presently, the maritime sector is characterised by the domination of foreign flag vessels especially those of developed market economies of Western Europe and America.

This situation has led to the loss of billions of naira annually in freight revenue.  Efforts by successive administrations to procure vessels for the defunct Nigerian National Shipping Line (NNSL) did not yield the expected result as those vessels were ill managed and subsequently the NNSL was liquidated.

On the port side, Nigerian seaports are still characterised by cumbersome clearing procedures and excessive manual processes nine years after the Federal Government’s port reform.

There is therefore urgent need to introduce trade facilitation measures that will improve the clearing process with a view to reducing time and cost and making our ports competitive with other sub-regional ports.

Nigeria has over 3,000 kilometres of navigable inland and intra-coastal waterway channels exclusive of fresh water lakes but sadly this important sub-sector has suffered utter neglect.

It is in recognition of the importance of coastal shipping that the cabotage regime came into force in Nigeria on May 1, 2004.

The regime is meant to leverage the optimal participation of indigenous operator in domestic shipping as well as act as a springboard for incremental capacity acquisition in all aspect of maritime trade.

The Nigerian Coastal and Inland Shipping (Cabotage) Act is essentially a framework to restrict domestic maritime trade from complete foreign domination. It thus entails that ships for domestic trade are built, operated and manned by Nigerians whilst trading exclusively in Nigeria.

Unfortunately, many industry stakeholders have described the Act as “dead on arrival” as it has succeeded in achieving the direct opposite of its original concept.

Several other areas of the maritime sector are also begging for attention.

These include shipbuilding and repair, coastal shipping services, trawler, more terminal/jetty development and operation, ship breakage and wreck removal, ship agency, chandelling and bunkering services.

Government must therefore put in place policy measures and incentives that will encourage both foreign and indigenous entrepreneurs to invest in these areas.

As a nation with abundant natural and human resources, Nigerian must harness her maritime potentials by improving indigenous participation in shipping, engender competiveness, earn foreign exchange, create employment and accelerate development of her national defense and security system.

The new administration at the centre has the arduous task of developing a novel policy or plan to guide the nation’s maritime practice.

Our shipping policies and developmental initiatives should be strengthened by encouraging critical legislative actions and periodic reviews

At the country’s present state of development, the government should demonstrate the political will to develop the shipping industry through faithful and committed implementation of the Cabotage Law and disbursement of the Cabotage Vessels Financing Fund (CVFF).

Other funding support mechanisms and channels should also be implemented to hasten tonnage development within indigenous operators in the industry.


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