Ex-Raying Shipowners’ Strategies for 2017

As stakeholders in the maritime sector takes steps to overcome some of the challenges of 2016, Eromosele Abiodun ex-rays the Shipowners Association of Nigeria’s plans for 2017

If there is a year all stakeholders in the Nigerian maritime sector would never want to see again, that year is certainly 2016. Everything that had to go wrong went wrong in the sector with even the biggest players laying off over 50 per cent of their staff members.

The year started with the foreign exchange crisis and the hangover from the ban on 41 items from the official foreign exchange window. While importers, shipping companies and terminal operators waited endlessly for things to improve, it never did.

As a matter of fact they went downhill. The situation would have been better if the federal government had an idea how important the port is for the nation’s economy. However, it was not all bad news. On July 13 this year, President Muhammadu Buhari appointed the former Chief of Staff to the Kaduna State Governor, Malam Nasir el-Rufai, Ms HAdiza Bala-Usman as the Managing Director of the Nigerian Ports Authority (NPA). Her appointment brought respite to the industry following her effort to carry out the needed reforms in both the NPA and the industry as a whole. Her efforts could, however, not undo years of bad trade policies.

During the year under review, seaport operations in Nigeria was badly hit by some ill-conceived trade policies including the hike in the import duties of vehicles and rice as well as the introduction of a fish quota system by the administration of former President Goodluck Jonathan. The ports also suffered from the restriction of 41 items from accessing the official foreign exchange window by the Central Bank of Nigeria (CBN).

Indications that Nigeria was on a journey to recession came early in 2016 when the National Bureau of Statistics (NBS) announced that the country recorded a decline of N793.5 billion in the first quarter merchandise trade to close at N2.72 trillion from N3.51trillion in the fourth quarter of 2015, the first time in the last seven years. The bureau attributed the decline in the first quarter activity to a sharp drop in both import and export trade.

Also, data at the NPA showed that 341 vessels entered Nigeria in September 2016, the lowest in nine months and a fall from 400 recorded in August 2016. Cargo throughput also dropped from 6.3 million metric tonnes in January this year to 5.6 million in September, which is also the lowest in the year.

The statistics also showed that a total of 3,347 ocean-going vessels called Nigeria as at the end of third quarter so far this year, estimated at about 100,152,274 metric tons. The breakdown showed that the Lagos Port Complex Apapa received 318 vessels in the third quarter as against 301 in the second quarter. Tin Can Island Ports received 406 vessels in third quarter, against 368 in the last quarter; Rivers Ports, 80 ships against 84 in the previous quarter; Onne received 152 vessels against 163; Calabar Port, 51 against 52; while Delta Port received 132 against 109.

Forging ahead
Meanwhile, in a bid to overcome the setbacks of 2016 as a result of the economic meltdown, the Shipowners Association of Nigeria (SOAN) has outlined some strategies that it hopes will help its members stay afloat in 2017.
President of SOAN, Greg Ogbeifun in a goodwill message to members at a meeting in Lagos, said the association witnessed tremendous growth and achievements in 2016, “Which has impacted positively on our industry as evident by the show of support and attendance by distinguished key industry and government leaders/chieftains at our end of year dinner/ gala event.”

“This would not have been possible without your moral, financial and numerous other supports. I have always said that my tenure as president of the association will primarily focus on bringing industry, national and international recognition and acclaim to SOAN. To the glory of God, and working with the support/cooperation from my exco and our esteemed members we have achieved this goal. The success of this goal naturally has opened up new and numerous opportunities and of course challenges for the association and the members.”

However, he said the dramatic fall in crude oil price which has gravely affected businesses in the Oil and Gas sector, has taken its toll on the business of its members.
According to him, “Most of our vessels are now laid up without jobs and the few vessels still engaged are working for such low charter rates that many owners can barely break even. It is necessary for us to look for avenues to diversify our business interests.

“It is my belief that collectively we have gained substantial knowledge, experience and expertise in ship ownership, management and operations such that we can explore how to deploy these expertise in participating in the Crude Oil Tanker Fleet being encouraged by the industry and government as strongly highlighted in the paper presented by the Group Managing Director of Nigerian National Petroleum Corporation (NNPC) at our gala night.”

Cadetship training berths scheme
Ogbeifun stated that the impact of the inauguration of the Cadetship Training Berths scheme has generated a lot of interest such that SOAN is now being approached by various organisations and individuals requesting for their candidates to be given a place in this scheme for sea time training.

These, applicants he added, have expressed their willingness to pay for such opportunities on our vessels.
“As we know, the importance of training these cadets cannot be over emphasised, as we are the ultimate beneficiaries from this scheme since they would end up as well-trained officers to provide the much needed personnel to man our vessels.

“Even vessels that are not working but are manned whilst waiting for job opportunities can have cadets on board and their time on such vessels will still count towards their Sea Time eligibility. This scheme can be co-ordinated in a way that there will be no cost to the vessel owner and in fact owners can be paid for providing their vessels for the scheme,”he said.

He disclosed that one of the international oil companies (IOCs) has indicated their willingness and desire to work with SOAN, to support vessel owners in the training of our Tug Masters and Chief Officers in institution that carryout Simulation Trainings such as Charkin Maritime and Offshore Training Centre and PEM Offshore.
The IOCs, he added, have also indicated that some of the trainings could be carried out in Holland and would be sponsored by the IOC, “They are waiting on us to develop this initiative further.”

Nigerdock approaches SOAN
He disclosed that the management of Nigerdock has approached SOAN that they would like to meet with it to explore areas of mutual benefits in the New Year.
He added: “This opportunity may enable us negotiate a special discount for our members who may wish to patronize Nigerdock for dry dock and repair jobs on our members’ vessels.

“As you know, during the gala event, in my welcome address I made a request to the Lagos State government for land to be allocated to SOAN to build the SOAN Centre. The representative of the governor in his response advised that we send a formal letter requesting for the land allocation. We have already submitted the request letter to him and this would need to be followed up.

“There is now a need for us to organise workshops to address issues affecting members and their business. There are a lot of statutory requirements by various authorities and agencies which such workshops will assist members in complying with the following: MLC Act and Seafarers Condition of Service and requirements of the Financial Reporting Council (FRC).”

IOCs and stakeholder engagements
Ogbeifun disclosed that the stage is now set for SOAN to engage the IOCs and other critical stakeholders to deliberate on matters that affect its members going forward.

“Members would be required to come up with issues affecting us and our businesses so we can engage appropriately in the interest of Members. From the foregoing, it will be necessary for us to establish committees that will develop the various issues identified above and provide solutions to them. All members of the association should be encouraged to belong to one committee or the other.

All members by now must have received an electronic copy of the Audited Financial report for 2015/2016 Financial Year. This is in fulfilment of my pledge at our inauguration to exercise the highest standard of financial discipline and accountability as we owe you the members this.

“Discussions are currently ongoing with the auditors in setting up proper accounting procedure within the Secretariat. This you will agree with me is required of an association such as SOAN. In addition, they are also to advise us of the statutory requirements expected of us as regards compliance with annual returns, FRC registration among others,”he said.

Membership regularisation
He said there is need for all SOAN members to regularise their membership yearly by paying the annual dues as soon as practicable to keep the association running.
He said: “Membership cards will be issued to financial members. We intend to identify and discuss with critical service providers in various areas such as hotels, airlines, shops and other market outlets with a view to negotiating discounts for SOAN card carrying members.

“As you are aware, the tenure of the present Exco for which I am President ends on the 31st of March 2017, by which time our Constitution requires that a general elections be held and a new Exco formed.”

“In view of this, a returning officer will need to be appointed at the next general meeting expected to hold in the last week of January 2017 to co-ordinate the election which I suggest should hold in the last week of February 2017. It will be necessary to review the current offices constituting the Exco, learning from the experiences in the last couple of years, to more effectively run the association.

“From our experience there is need to restructure the Exco to better position the Association to manage the inevitable growth opportunities facing SOAN. Before the general meeting in January, we hope to circulate more information on the proposals we have on some of the points raised above for your consideration,”he stated.