by Stephen Ubanna
When the Olu Akinsoji led Committee that was set up by Rotimi Amaechi, a former governor of Rivers state and now minister of Transportation in 2016, to look into the viability of a new National Carrier, submitted its reported in June 2017, the minister had assured industry stakeholders that the President Muhammadu Buhari led All Progressive Congress, APC, government,’’ has the political will at ensuring that the national carrier gets enough cargo to carry , stating that he was determined to ensure that it succeeds.
The minister was said to have promised to use part of the $200 million from the Cabotage Finance Fund, CVFF, in creating the Framework for the project. Insider information said the ministerial plan for the new National Carrier was anchored on the private sector which would own 60% shareholding while their Foreign Counterparts are expected to hold 40% stake.
The Akinsoji report may have informed why the minister at the instance of Presidnt Muhammadu Buhari Constituted a National Fleet Implementation Committee headed by Hassan Bello, a Lawyer and Executive Secretary, Nigerian Shippers Council, NSC, believed by many would be the pioneer Chief Executive Officer, CEO, of the National Carrier if it comes on stream.
The good news was that the former Rivers state governor had said that the new National Carrier would have enough cargo to carry in order to remain in the business. This is because of past attempts to have a Functional National Carrier which failed because the Nigerian National Petroleum Corporation, NNPC, the country’s Oil Conglomerate particular,, failed to patronise, NNSL, the defunct National carrier, to carry their on generated cargoes
Take for instance in the absence of a viable National Shipping Line, NNPC alone, was said to have spent $6.16 billion in 2015, by engaging Foreign Ocean going vessels to take its cargo into the International oil market. The Corporation could make such huge payment to the Foreign Shippng Companies because it transacts its Crude Oil lifting with them on the basis of Free on Board , FOB, which allows the buyer to choose who carries the wet cargo .
Bello, the NSC, Executive Secretary, and Chairman of the National Implementation Committee, may have given an insight to the huge financial loss to the nation in the absence of a National Carrier when he revealed that each year the country paid about $9.1 billion in freight of cargoes to Foreign shipping Companies.
He gave instance of the number of ships that had called at the nation’s ports and offshore Terminals freight and discharge cargoes between 2004 and 2017. According to him, the country recorded a total vessels traffic of 25,256 with gross freight of $39 billion while NIMASA, a government Maritime Regulatory earned a mere one million dollars from its 3% levy.
This may not have been the case with Cost, Insurance and Freight , CIF, policy that allows the seller, to decide who carries the cargo. This may have informed why the Bello led Committee had come to the conclusion that here is need ‘’for a Comprehensive reforms in the nation’s shipping sector to make it more attractive and Competitive for the players. The Committee members were said to have made it clear to those that cares to listen that ’’there are lots of reform that needed to be made in the country’s ship Registry in line with international standard in order to attract Foreign shipping Companies to come and register their vessels in the country. The Committee suggestions that the country needed ship building and repair yards also in order to discourage shipping Companies taking their vessels to Nigerian ports from taking it to Ghana and other neighbouring countries in the West African Sub-region or abroad for repairs.
Recall that the defunct NNSL, which was set up in 1959, was liquidated by late General Sani Abacha in 1995 when it could no longer stay afloat in the face of poor Management, Corruption and mounting debts. The situation as so bad that Foreign Creditors were seizing the country’s vessels to recover their debts. Another attempt that was said to have been made at having a national fleet was the establishment of the National Unity Line, NUL, which also turned out to be a failure.
Ever since the liquidation of NNSL, 1995, and the Collapse of NUL, which was established to replace it, past and present governments have been looking for avenues to float a Functional National Carrier, through private sector participation but no head way.
. But Bello, may have gladdened the heart of Nigerians when he said that the Committee was already at a ‘’critical stage of the national fleet implementation process’’, stressing that ‘’Capital injection is what is required now to actualize the project’’.
Appealing to Nigerian investors, the NSC, Executive Secretary declared, ‘’ ‘’this is a perfect time to invest in the country’s national fleet, as the global dependency on fossil fuels is projected ‘’to dwindle considerably by 2030’’, thus making the search for an alternative power sources of replacing oil which is the mainstay of the economy necessary.
He insists that the government must diversify the economy into other Foreign exchange revenue sources , by opening up the maritime sector for investors to come in. He noted that the objective of the national fleet implementation Committee were to create job opportunities for the teeming unemployed in the country, reposition the nation’s maritime sector and enhance the revenue generation of the country through the maritime sector. This is in addition to ensuring its economic benefits to businesses ancillary to the sector in logistics and services.
He may have dashed the hope of dubious investors who are waiting in the wings to exploit the new national fleet to make cheap money when he said that the government is determined ‘’ to create a national fleet that will work and not the one that will go the same way of the NNSL or NUL.
He is right. The Bello led National Implementation Committee were said to have impressed it upon the government that it must be ready to clean up the country’s shipping sector which is murky and encumbered with lots of obstacles in a bid to making more attractive to Foreign investors, who were said to have declared their interest to participate in the project.
Already, the Committee had enjoined the government to ensure provision of adequate incentives for the potential Foreign investors and to ensure that the country’s infrastructural facilities are working without any cause to worry. It further stated that the government must look at the area of support of the private sector to invest in the project.
It is on records that the Bello led Committee, had signed a Memorandum of Understanding , MoU, with a Singaporean shipping Company, Pacific International Limited, PIL, to invest in the project about two years ago, in order to attract other Foreign investors.
The Singaporean firm may have backed out of the project at the last minute, in what Bello, the NSC, boss, had attributed to ‘’to the unfavourable business Climate in the country’s shipping sector’’. This may have forced the Committee, to go back to the drawing board in order to come out with something that would be meaningful and acceptable to industry operators.
The recent visit of the new National Fleet Implementation Cmmittee members, to Bashir Jamoh, Director General, Nigerian Shippers Council, NIMASA, who many believe , has the expertise and knowledge, to actualise the project speaks volume. Jamoh had made it clear to those that cares to listen that ‘’the desire for a new Nigerian National Carrier is gradually being achieved with the level of work that had been done by the Implementation Committee.
The NIMASA, Director General, who could not hide his feelings had said that ‘’there is no better time to have a national Carrier and develop the nation’s maritime sector than now, that the International Community are gradually looking for alternative sources of energy to replace fossil fuels, which is the mainstay of the nation’s economy’’.
It is not surprising why the NIMASA boss, who is spearheading the establishment of the new national Carrier had said that’’ the country cannot be caught unawares’’, stressing that the government have no option but’’ to develop the nation’s shipping sector , which from available studies ‘’was capable of earning the country even more than oil revenue annually’’.
According to the NIMASA, Director General, the nation’s maritime sector has the potential to grow the economy between three and five percent annually due’’ to the large size of the local market’’ but regretted that these had remain untapped over the years.
He had repeatedly stated the ‘’the agency’s commitment to fully and actively support the drive for a wholly owned and operated national fleet remained wavering,. ‘’It is the third leg of the tripod driving the development agenda of the current Management of the agency’’, he had said.
A Statement by Philip Kaynet, a Deputy Director and the agency , Head of Corporate Communications, confirmed that Issac Jolapmo and Aminu Umar,described as key actors in the nation’s shipping sector, and who incidentally, were members of the Bello led new National Fleet Implementation Committee gave kudos to the NIMASA, Management, both past and present , for’’ their active role in working towards the realisation of the National Carrier project’’.