Nigerian ship owners are going through difficult times – Tunji Brown

Tunji Brown is the Secretary General, Nigeria Shipowners Association (NISA). In this interview with SHIPS & PORTS DAILY’s Shulammite Foyeku, he speaks on the challenges facing indigenous ship owners and the need for government to implement existing shipping laws especially the Cabotage Act in order to create an enabling environment for local operators to thrive.



What are your expectations for the maritime sector under this government?

We need to look at it from two perspectives, the regulatory perspective which we have enabling laws to actually support the maritime sector but implementation has been a major challenge so we need to look at that and we need to look at the economic side of it. There is a general problem across all sectors of the economy in Nigeria today and that also affects the maritime sector. For example, the Cabotage Act, which ordinarily should promote indigenous participation in cargo carriage as we all know have not been active in the oil and gas sector as maritime operators. With the current situation globally concerning the oil price, that sector is not as lucrative as it used to be and obviously we are also affected. The tonnage is no longer there even the offshore rigs are cutting down on production and this also affects us. So government needs to actually enforce the Cabotage Act now more than ever before and for the simple reasons because the volume of available businesses today is not even enough for us indigenous ship owners so we need an enabling environment to allow us compete favourably with the foreign participants in the sector.

Currently, lifting wet cargo offshore Lome to Nigeria or offshore Lagos into storage tanks we pay the same amount of money that is being paid by foreign vessels and we pay in foreign currencies, so we are at a disadvantage. We need government to actually implement the Cabotage Law to give us the opportunity to pay in naira and opportunity to actually move the available cargo. So government needs to work on that and the law is there so there is no need for a new law to be enacted for that to take place. The waiver for temporary importation for foreign vessels should be removed. We think we should allow Nigerian ship owners carry the available cargo today. Even with NNPC, I know there are contracts for chartering of vessels; this should be handled by indigenous ship owners only.


Do you think there is need for government to review the Cabotage Act, 12 years after it was enacted?

Like every constitution or law, all you need to do is probably review but I think we have not fully utilized the Cabotage Act in terms of implementation. An integral part of the Act is that certain percentage of fee paid under Cabotage should be used for the development of indigenous capacity, which we have not even touched. The cargoes that are generated within the coastal waters of Nigeria should be solely for indigenous ship owners. So the laws are there, if you are going to review it you must have at least fully implemented what we have and we would realize that okay we need to improve on this, then we can go back to the National Assembly to look at that. We just need to implement what we have. The major challenge has been with the regulatory authorities – NIMASA, NPA, Shippers Council, and the Ministry of Transport. We would try to engage them this year on the implementation of what we have.


What is the mystery behind the non-disbursement of the Cabotage Vessel Financing Fund (CVFF)?

It all comes down to the implementation earlier discussed. The enabling law is there for us to actually access the fund and it is domiciled with the ministry of transport through NIMASA and for us as ship owners we can only go through that medium to access the funds. I am aware that a committee was set up about eight years ago to review the CVFF and we submitted application to access the funds but somehow it was abolished. I don’t know what happened and after that I heard something about three or four years ago that some companies were shortlisted for disbursement of CVFF but nothing has happened. So, the question I asked is why are we not accessing this fund and for us as ship owners we are asking the same questions to the regulatory authorities, why can’t we access our funds?


Has NISA made any attempt to know how much has accrued to into theCVFF coffer and what government is doing about disbursement?

We made an effort with the last administration of the past DG of NIMASA. We tried severally to ask the DG but no information was forthcoming. The only way we can have access to it is under the new enacted law about public access to information. We need to actually go under that to access it. We have written officially but that has not worked. But under the Freedom of Information Act, we can go and request under that but we are yet to do so. We should be able to access that because it is our money but don’t forget under the Cabotage Act it is a certain percentage of our carriage cargo so it is a fee that we pay but it is meant for development of indigenous capacity. We have paid the fee to government for the carriage of cargo because if you don’t carry any cargo you don’t pay the fee, so it is not really money you can say I contributed, you must have worked to contribute that. So ordinarily, you would say it is a fee paid to the government but it is meant for us just like the tax you pay to the government but it is meant for you so that is what it is. It is our money but they still need to apply the funds for development of indigenous ship owners.


How are ship owners coping to remain in business with the current economic situation in the country?

It is really tough. All our members are finding it very difficult to remain in business. Some members with three to four vessels without patronage will need to maintain the vessels, the insurance on the vessels, the crew needs to be paid so it is a very tough situation right now with indigenous ship owners and currently most of the importers probably own their own ships or use foreign vessels. We talk regularly with our members and it is the same story. We are unable to get jobs, banks are running after us to pay back loans, we are not able to access loans anymore because loans already provided to ship owners are not been paid so we are facing a difficult time.




Are there plans for both factions of NISA to reconcile to resolve the leadership crisis?

We are open for resolution the right way. For the benefit of the association and the nation generally, I think it is important we all move forward in the right way. With the court case we have to wait for the outcome, we are open to discussion but our stand still remains the same.


Don’t you think the division among local ship owners is contributing to their being ignored by government?

In my opinion, I don’t think so because before the election last year November we had only one association ISAN and everyone of us belong to that association. Last year, was our 11th year because the association was formed in 2003 and we worked tirelessly with the government to implement all the policy for 11 years but we didn’t get any result. The factions of NISA, SOAN and others are just people who lost in elections and think let us try out another. We know the credible ship owners, the real operators; government knows the credible ship owners. People making noise on the pages of newspapers cannot really change anything so I don’t think they are impacting on the implementation of anything as it were, we all know ourselves.


What measures is NISA putting in place to get involved in the exportation of the nation’s crude oil?

We have always been clamouring for this. With the previous administration we tried as much as possible to get involved by floating a national carrier. We went through all the processes of getting a national carrier license to be able to participate in the affreightment of crude but due to politics we were unable to get through to that national carrier stage, that was one of the major reasons the last Director General requested that we all come together and conduct an election so we have one major strong association to drive that. That is still our stand. We want to participate. The law is there that 80% of Nigerian freight should be carried by indigenous ship owners but for us we have a strong and solid plan now. We can see clearly that the government today is looking to diversify the economy from oil sector to the non-oil sector, even if you are doing that you still need to export all these goods out of the country and the major catalyst for all this is maritime. So, we want to position ourselves as ship owners because if we can move the goods out from the country to foreign countries, the shippers would not need to source for dollars to ship the goods out. For the crude, it would be an added advantage if the crude is coming with a foreign country, then they will pay us in foreign currency so we would be able to earn foreign currency also like from the crude the government earned foreign currency. If the freight is also handled by a Nigerian company, we would also be able to earn foreign currency so it would be an added advantage for the government and that is the way we are looking at it.

The attempt I mentioned in the past was actually stalled by NIMASA and Ministry of Transport. At that point in time, ISAN Shipping Line was actually driven by me as the Managing Director and we had everything necessary to actually move that forward. So that is not an issue among us. We just need to push the association forward to the ministry. We want to get there and we should be able to make a good presentation to the ministry. We believe this government is a listening government.


Why do Nigerian ship owners prefer to employ non-Nigerians seafarers?

Well, not everyone but the institution we have currently is not bringing out the best in our seafarers in terms of training. Most Nigerian seafarers are not well trained. It is not about having the certificate, it is about entrusting a vessel worth millions of dollars in capable hands and that has been our major constraint.

We hope and pray that this new administration will actually fund the Maritime Academy of Nigeria, Oron very well so that we can have competent hands who can handle our vessels.


What do you make of the scrapping of the Nigerian Maritime University at Okerenkoko by the Minister of Transportation?

Duplicity of same institution without adequate equipment will not bring out the best. What we have currently is underfunded so we might as well actually fund what we have, give them the necessary tools to produce qualified seafarers. I am in support of that idea. At least they should channel whatever fund they want to use for the Maritime University into MAN, Oron so we can have the best institution.

There is only one maritime institution in Ghana and it is one of the best in West Africa. I don’t see any reason in having a maritime university for the sake of having it except we are going to have the best maritime university. Today, most of our Niger Delta brothers are being trained in the best universities across the world but there is still nowhere for them to work. So why not equip what we have and develop it?

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