Whither the local content in Nigerian shipping?

Whither the local content in Nigerian shipping?

PHOTO CREDIT: SHIPS & PORTS archive

For the past decade, the common refrain listed among the top challenges in Nigeria’s maritime sector is the issue of foreign domination. From all reported accounts, foreign firms dominate virtually every aspect of Nigeria’s coastal shipping trade, contrary to the provisions of the Coastal and Inland Shipping Act 2003, otherwise called the Cabotage Act.

The preponderance of foreign seafarers on Nigeria’s waterways is particularly vexatious, considering the thousands of Nigerian seafarers being churned out by our maritime academies and who have been unable to find work or unable to move forward with their education. At the last count, there are over 5,500 seafarers in Nigeria who would have greatly benefited from sea-time experience aboard commercial ocean-going vessels, had there not been competition in the form of Filipino and Chinese seafarers.

The extent of damage caused by foreign domination in all aspects of maritime business cannot be sufficiently quantified. Most recently, a refinery project at Lekki, Lagos State, which entailed the service of about 500 Nigerians aboard a vessel, HYSY698, had allegedly disengaged the Nigerian seafarers in favour of their Chinese counterparts.

Initially detained by the Nigeria Maritime Administration and Safety Agency (NIMASA) for flouting the manning requirements of the Cabotage Act, the vessel was later released without further explanations. Going by the Cabotage Act, all vessels operating in Nigeria’s territorial waters must be owned by Nigerians, manned by Nigerians, built and maintained in Nigeria. Already, Nigeria has a severe deficiency in the building of ships; we are bereft of the technology and rely solely on importation to acquire marine vessels.

This dependence ost Nigeria about N1.09 trillion between 2014 and 2018, according to data provided by the Nigerian Content Development Management Board (NCDMB). Still, the funds to import these vessels are hard to come by; Nigerian banks are either wary of financing such ventures or their high interest rates make them unattractive business partners.

In the area of dry docking services, it is a similar scenario. For the maintenance and repair of its marine services, Nigeria is losing an estimated N13.5 billion to West African neighbours especially Ghana and Cameroun annually. This huge capital flight occasioned by the inadequacy of dry dock facilities in Nigeria could have been better utilized attending to more urgent infrastructural issues.

The exploitation of ocean resources via fishing has also not been left out in the domination by foreigners. Nigeria loses an estimated $20 million annually in shrimps and prawns to illegal fishing, predominantly perpetrated by the Chinese, the Norwegian Seafood Council announced last year. Not only is the country denied the nutritional value of its seafood, the government loses revenue in the form of taxes and other forms of revenue.

The numerous documented news reports and consistent outcry from maritime stakeholders over the years notwithstanding, the response from the various government agencies tasked with the regulation and development of the maritime sector has at best been lukewarm. Often, a show of force following any news report on the issue of foreign domination is staged briefly. After aggrieved persons have been seemingly placated by this showmanship, the status quo returns.

Meanwhile, the number of unemployed increases by the day. As at December 2018, Nigeria has about 20.9 million unemployed persons. Save for the influx of foreign workers, a sizable chunk of this number could have been absorbed by the maritime sector if the local content in the Cabotage Act is effectively deployed.

Pushing for maritime development while failing to protect the jobs and businesses of one’s citizens working in the sector is an effort in futility. Departments tasked with monitoring and compliance within relevant government agencies should, as a matter of utmost urgency, begin the enforcement of the local content in all spheres of the maritime sector except, of course, in the area of shipbuilding.

Developed maritime nations of the world attained success in shipping by protecting local operators. Turning a blind eye to the influx of foreigners, especially in areas with sufficient supply of competent Nigerian manpower, is not only detrimental to our economy but also a failing of the Federal Government in whose purview this oversight function resides.