Secure Anchorage Area is a very strange concept — Capt Ihenacho


Capt. Emmanuel Iheancho is a Master Mariner and Nigeria’s former Honourable Minister of Interior. He is also a shipowner and Chairman, Integrated Oil and Gas Limited. In this interview with Shulammite ‘Foyeku, he shares his thoughts on the removal of fuel subsidy by the Federal Government, the controversial secure anchorage area arrangement and several issues concerning the maritime sector.

As a businessman in the oil and gas industry, what are your thoughts on the removal of fuel subsidy by the Federal Government?

It is in the best interest of all of us as Nigerians because the subsidy programme despite its good intentions really resulted in a lot of waste. The resources being targeted at poor people really wasn’t getting there. The resources have been appropriated by people who own cars and people who own transport vehicles, people who could very well afford to buy fuel at the full price. So in the interest of our commonwealth, it was necessary to recover all that money that was being diverted elsewhere so that the government now would be able to have enough money in its kitty to implement its programmes and inaugurate a special assistance poverty alleviation programmes that really would properly and positively impact the lives of poor people in the country. So the subsidy removal was a good thing. It’s long overdue.

What areas would you advise that the money saved from subsidy be channelled into?

I cannot really advise the government as to how they would spend that money because they must have a programme for maximising the well being and welfare impact of their policies. So be it in terms of job creation, and that is a major area to encourage investments in areas where jobs will be created. It could be in social programmes that will have an impact on the welfare of the common people. So now, the government will have enough resources at its disposal to implement those policies.

What in your own view is the reason why several attempts to change from the Free–On-Board  (FOB) to Cost Insurance Freight (CIF) trade policy of exporting the nation’s crude oil thereby giving indigenous shipowners the right to lift crude oil has not been successful?

That is what we have advocated for so many years. There was never a seminar that we organized that we didn’t really list that as a critical requirement to add value to our trade by allowing us to provide some of the shipping services for lifting the crude to international refineries. We advocated for a situation where we could also develop the capacities to provide the shipping services for goods that are imported into the country. So it is something that we have talked about for so many years. Belated though it is, we are really pleased that now they are beginning to realize the need to implement some of the suggestions we have recommended for adoption. So we don’t need to dwell on why the attempt to change the trade policy has not worked in the past. That is historical. I would rather talk about what people intend to do now rather than say this is why they didn’t do it at that time. It is all history now. The important thing is that the realisation has come to stay and it is in our best interest to add value to our international trade output through a change in the terms of trade policies of crude oil.

What are your thoughts on the NIMASA NSDP scheme?

It is an incomplete training programme because a complete training programme for seafarers is one that gives you the ability to go to school to learn the theory of seamanship and ship management and then also provide an opportunity for you to be employed either in Nigerian-flagged vessels or vessels carrying the flags of countries we have an arrangement with for training Nigerians. For them to have a proper seatime that will qualify them for recognition as a certified seafarer, they need to log their seatime on a trading ship. So what that means really is that the country needs to have a programme for assisting those who have experience in running shipping and I am not embarrassed to tell you that I have been there. I ran ships in international trade and because we didn’t have the resources to buy new ships and expand our fleet, all that effort is now in abeyance. But if the country were to realize how important it is for us to have a shipping platform where trainee seafarers could log seatime, they could sponsor some of us partly to buy newer vessels and lo and behold, that gap would be closed. So what we need to do is to close the gaps and look at what we would do to ensure that once people go through this programme then they will be internationally employable through the quality of the certificate that they would be given and also the potential they have for performing. We will not advocate a situation where the government goes into the business of acquiring ships and trying to run it. It never succeeded. It was an absolute disaster in the past and we will not advise that way of doing things at all. Proceeds from the Cabotage Vessel Financing Fund (CVFF) should be given to people who have capacity to profitably run shipping. With that, two things will be achieved, you will have more tonnage under the Nigerian flag and we will have platforms that can train seafarers. That is the way it should be done.

Do you support that shipping lines patronise the operation of a Secure Anchorage Area at the Lagos Port?

It is a very strange concept to me to be honest. I have spent a lot of my time when I was in my youth sailing waters of the world. I just never came across this arrangement where you have areas that you designate as safe anchorage.  What about the areas adjacent to the anchorage area. Will it be okay for people who venture out there to be attacked by pirates? No. The entirety of Nigerian coaster waters has to be secured by the Nigerian Navy and the appropriate security agencies. So when people say we have to have a secure area, I wonder what they are talking about because it is not the experience that we have that people have secure areas and then adjacent areas are left unsecured. So the entirety of Nigerian waters has to be completely and totally secured and whatever resources it takes, it has to be found to ensure that security because in the final analysis, our welfare is dependent to a large extent on the security of our international trading connections.

The development of deep seaports to receive bigger vessels with huge economies of scale has been in the front burner in recent times. How feasible do you see many of these projects, most of which are being championed by state governments?

It depends. If they live in close proximity to the sea and if there is deep waters in their territory, I see no reason why they shouldn’t develop deep seaports because if they do, that is going to encourage international trade connections and activities in their territories. So deep seaports, wherever the natural conditions exist for them to be developed, they really should be seriously considered. However, building a deep seaport is capital intensive just as there are benefits to be realised from developing one. You cannot have a one-sided investment where you spend a huge amount of capital and there is nothing that you are getting back from it. So if you were going to spend money to develop it, it would be contingent on the feasibility proposal, which would have bankability and that would determine whether it would go forward or not. Again, the priorities of the state must be there. They have to rank their priorities to say is the deep seaport much more important to us than having more educational establishments or other types of investment in the economy? So all of these things are what will be put on a scale and properly weighed before venturing into building a deep seaport.