The Value News

NIMASA:There is No Perfect Time To Invest In A National Carrier Than Now

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.

Amaechi: Minister of Transportation, Set The State For Establishment Of A Nation Carrier

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.

Jamoh, DG, nimasa and Bello, Chairman National Fleet Implementation Committeee And ES, NSC, during A vISIT

 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.  

Jamoh: DG, NIMASA

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’’. 

Stephen Ubanna

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