The Value News

NIMASA: Hope Brightens For Increase In The National Fleet

By Stephen Ubanna

 With barely 15 years  after  the suspension  of the  Ship Acquisition and Ship Building Fund, SASBF, by late Sani Abacha, an Army General  and  former Head of State, indigeneous Shipping owners can now heave a sigh of relief.

 This is because  Rotimi Amaechi , a former governor  of Rivers state and now minister of Transportation, who  has Presidential mandate  to go ahead with the disbursement of the $ 200million or  N72 billion    Cabotage Vessels Financing Fund, CVFF, to the indigenous Ship Owners who need  it to increase the national fleet, has set up a Committee  to develop a working guideline for  it.

    Given the Presidential nod, Amaechi had named  Dakuku Peterside , Director General,  Nigerian Maritime Administration and Safety Agency, NIMASA,  as a the Chairman of  Committee, which also has Temisan Omatseye,   a former Director General of the agency  as  member.

Amaechi was said to  have  broken the cheery news about the disbursement of the CVFF  to the Industry  stakeholders  at a recent meeting  in Lagos.. He disclosed that the proposed guideline that will be developed by the Peterside led Committee will be  submitted to his office  and  which in turn, will  be  sent  to the National Assembly as a Bill for approval and  then, final  accent by President Muhammadu Buhari, to give it a legal backing  .

The minister may have   alluded to the fact  that this is the first time since the establishment of the CVFF, in 2003, by former President Olusegun Obasanjo,,  that the money that had had accumulated in the Fund,  will be given to  ship owners  directly. He was said to have  also alluded to the fact that the  past Administration of  former  President Goodluck Jonathan of  then   ruling  People’s Democratic Party, PDP, had diverted the money   from the Fund to the  building  a Maritime University  at Okekerenko,  in Delta state  and setting up of  Faculties of Maritime  in other Universities across the country.

 The minister may have dampened the enthusiasm  of the ship owners   who had been  clamouring for the disbursement of the CVFF, over the years, when he declared     that ‘’as part of efforts  to mitigate  the risk involved  in the disbursement , Financial Institutions  would be involved  as the Financial risk would be borne  by the banks  that would be involved.

He appears to have  learnt from the mistakes of the past Management of  the then Nigerian Maritime Administration, now baptized NIMASA, in  the management   of the suspended  SASBF, in by the late Abacha administration1995.

 Until the suspension of the Fund in 1995, 11 Shipping Companies, two government owned and nine  indigeneous  shipping Companies  were said to have  been given  the multi-million naira loan  to acquire  ships in order to increase the national fleet to keep to the UNCTAD Code of Conduct of Liner Conferences of 40:40: 20.

 Among the shipping  Companies  that were said to have benefited from the suspended SASBF,  were the defunct Nigerian National shipping Line, NNSL, and the Nigeria  Unity Line, NUL,  both government owned shipping Companies. The indigeneous shipping Companies, which had  benefited from the Funds included  Faget  Nigeria Ltd,  East West Coast Marine Services Ltd,  Genesis World Wide shipping Ltd,  Cibra Marine Services Ltd and Skolar Nigeria Ltd. And  Taboraz Fisheries Ltd. Also, on the debtor list of the suspended SASBF, debtors   were  Bull Tankers Ltd,  and  Bilkship Nigeria Ltd,  including  A and  C Engineering and Marine Services Ltd.

A NIMASA source told The Value News  that the  suspension of the SASB, in 1995 by Abacha, was borne  out of the fact  that  some of the beneficiaries ,  who were mostly  former  master mariners, in the employ of the defunct, NNSL, who were ship owners , had refused  to honour  the terms  of  the loan agreement anymore.

The source disclosed  that less than  50 percent  of the beneficiaries  actually  acquired vessels     while some of the  vessels that   were said to have been acquired   constituted more  problems  to the shipping Companies as they incurred heavy maintenance Costs. There were  also  reported cases of diversion of the Funds to other businesses .

Given that there was no other sources of free funds  for them  to run their shipping Companies , many of the indigeneous   shipping Companies  were forced to have  Collapsed.    The Coast  was left clear  for the multi-national Shipping Companies  which have  the financial muscle  to take over the            industry  by  lifting all the cargoes generated by the government ,  businessmen and Compnaies operating in Nigeria. The case of the indigeneous shipping Companies were  made worse as they were schemed out from the  lifting of  the country’s Crude Oil.  Maiknta Baru, a one –time Group Managing of Nigerian National Petroleum Corporation, NNPC, may have  hit the nail on the head when  he said  that’’ Nigeria  shipping Companies   do not have  capacity  to participate  in the affreightment  of the nation’s Crude Oil’’.

Note that NNPC,  had adopted  Free- on-  Board, FOB,  as against  Cost, Insurance and Freight, CIF, demanded by  the indigeneous shipping Companies   in the sale of the nation’s Crude Oil.   Ibe Kachukwua , former minister of state, Petroleum Resources , had said   that NNPC, preference  for  FOB to sell  the country’s Crude  was informed by the prevailing security  challenges in the Niger Delta  and the need to guarantee  steady  oil revenue into the Federation  Account.

He noted that under the CIF arrangement,   petroleum cargoes  are legally  the property of the government  which  could pose a threat   to the country’s  oil revenue earnings as foreign  creditors  could easily  secure Court order s to confiscate  the crude oil cargoes as a means of repayment  of the country’s  indebtedness .

He had cited   the experiences of the defunct NNSL  which had its vessels/crafts confiscated  on Court orders obtained   by creditors. The former minister of state, had said that  the state oil Company, NNPC, found it   most appropriate  to transfer  the potential  risks  associated  with the ownership  of the cargo   to the buyer  at the load port in Nigeria which the FOB sales  agreement  allows.

According to him, the government and NNPC liability ends  as the crude oil  passes from the loading hose  at the vessels manifold  to the loading vessel.  The buyer, according to the  NNPC, sources  pays for the freight , marine insurance , unloading and transportation  from the load port in Nigeria to the destination in Europe, North America or the Asia country of China.

 But the Ship owners of Association of Nigeria, SOAN, and the  Nigeria Ship Owners Association, NISA, may  not have  agree with the arguments of the former minister   as  they were said to have  put   the loss  to the nation  at N2 trillion annually to the  foreign countries that own vessels  to  lift the  150 tons cargoes  from the  Nigeria oil terminals. This is an indication that the country had lost over N100 trillion to  foreign  countries which own Crude Oil  Tankers   sail into  the country Oil terminals to lift Oil and Other products over the last 50 years.

 SOAN and NISA, officials, were said to have made it clear severally  to NNPC,  officials , that under the FOB, which gave the buyer the freedom to  nominate the vessel to  carry their cargo to the international Oil market, they would  continue  prefer to use the services of the foreign shipping Companies .

Dakuku Peterside: DG, NIMASA

Peterside, the NIMASA , Director General, appears to be on the  same page with the SOAN and NISA, by insisting that there is need for  NNPC , to adopt the CIF, crude Oil sales   arrangement  for the country.   The NIMASA  Director General   was  said to have  spoken his mind at various meetings with  officials on the  need for transition from FOB to CIF , Crude oIl  sales arrangement , that’’ if implemented,  it  will encourage  indigenous  fleet expansion , that  could lead to  massive job creation  for qualified  Nigeria seafarers,  create opportunities  for the country’s  Cadets  and build the expertise  and Competence  in international shipping trade’’.

The NIMASA  boss worry,  according to insiders  is  that Nigeria is one of the major  exporters  of oil and gas  resource in the world   , with a daily average output of  about N1.92  million barrels  which generates huge freight for carriers but the Nigerian shipping Companies had been excluded from the business over the years.

Note  that most of   the  Organisation of Petroleum Exporting  Countries, OPEC, members,  such as Iran, Indonesia,  Algeria,  Kuwait,  Venezuela, United Arab Emirate, popular, UAE,  and Libya,  allow their  indigenous  Operators to participate  actively  in the shipment of crude oil but this could not be said of Nigeria , which gave room to the Oil producing and Exploration Companies  to favour  the use of Foreign Shipping Companies. 

Energy analysts  are optimistic that if the  right policies are  put in place , Nigeria   could build its  own  capacity , that could result in the change  of terms of   trade  that would benefit  the  country on the long run.

Value News

Add comment

Categories

Subscribe to Blog via Email

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Follow Me

ADVERTISEMENT

http://www.ubagroup.com/
NIMASA
NPA
September 2021
M T W T F S S
 12345
6789101112
13141516171819
20212223242526
27282930  

Subscribe to Blog via Email

Enter your email address to subscribe to this blog and receive notifications of new posts by email.