FG Predicts Robust Outlook for Maritime Sector

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Dakuku Peterside

Eromosele Abiodun and Ugo Aliogo

Despite the impact the likely outcome of the 2019 general election and global economic headwinds will have on the Nigerian economy, the federal government has projected a positive outlook for the maritime sector.

Specifically, it predicted growth of the total fleet size in 2019 over 2018, to be 10.33 per cent, easing to 8.75 per cent for 2020.

However, the government predicted that oil tanker fleet size would decrease by 11.2 per cent for and recover to a positive growth of 0.11 per cent by 2020.

The Director General of the Nigerian Maritime Administration and Safety Agency (NIMASA), Dr. Dakuku Peterside, who disclosed this in Lagos yesterday, while unveiling Nigeria’s Maritime Industry Forecast 2019-2020, said non-oil tanker fleet size is estimated to increase by 14.3 per cent in 2019 and 10.2 per cent in 2020, while oil rig count is projected to increase by 6.98 per cent and 6.5 per cent for 2019 and 2020 respectively.

According to him, “the major drivers of total fleets calling at Nigeria Ports are Foreign Reserves and Total Trade from our Empirical Estimates. The Baseline forecast is based on the 2018 outcome and 2019 Economic Recovery and Growth Plan (ERGP) forecast for total trade and foreign reserve.

“The pessimistic forecast is based on the assumption that total trade declines to N25.42 trillion in 2019 and N26.8 trillion in 2020, while foreign reserves is $43billion in 2019 and $59.3billion in 2020. “The optimistic forecast is based on the assumption that total trade will increase to N28.55 trillion in 2019 and N30.11 trillion in 2020, while foreign reserves is $44.7 billion in 2019 and $61.7 billion in 2020.

“The major drivers of Oil Tanker Fleets from our empirical estimates are Oil price and Foreign Reserves.

The baseline forecast was based on the 2018 outcome and 2019 expected for oil price and ERGP forecast for foreign reserve. However, the pessimistic forecast was centred on the assumption that oil price would rise to $69.6 per barrel in 2019 and $72.6 per barrel in 2020, while the country’s foreign reserves would be $40.57 billion and $55.94 billion in 2019 and 2020, respectively.

Optimistic forecast assumed an oil price of $76.67 per barrel in 2019 and $80.02 per barrel in 2020, with Foreign Reserves of $50.11 billion in 2019 and $69.36 billion in 2020.”

He added, “Also, the major drivers of non-oil tanker fleets are total trade and foreign reserves .The baseline forecast is based on the 2018 outcome and 2019 ERGP forecast for total trade and foreign reserve. Pessimistic assumes that total trade declined by to N25.42 trillion in 2019 and N26.81trillion in 2020 whilst we anticipate a foreign reserve of $43billion in 2019 and $59.3billion in 2020.

“Optimistic forecast assumes that total trade increases to N28.55trillion in 2019 and N30.11trn in 2020 with a foreign reserve of $44.69 billion in 2019 and $61.74billion in 2020.

“Oil price and oil production is assumed to be the major drivers of oil rigs (land and offshore) in Nigeria. The Baseline forecast assumes that 2.3mbd (million barrel per day) and 2.4mbd of oil will be produced in 2019 and 2020 whereas Oil price will be $71.9 per barrel in 2019 and $75 per barrel in 2020. On the other hand, the pessimistic forecast assumes Oil production of 2.25mbd for 2019 and 2.35mbd 2020 and Oil Price of $67.44/brl and $70.3/brl in 2019 and 2020 respectively. Our Optimistic scenario assumes 2.40mbd 2019 and 2.51mbd 2020 with an Oil price of $81.75/brl in 2019 and $85.37/brl in 2020.”

He added that the Nigerian Maritime Industry forecast 2018 – 2019 predicted an 8.15 per cent to 8.72 per cent growth in demand for non-oil tankers and an upward increase in demand for container vessels simultaneously.

Nigeria, he stated, was going to export more non-oil-and-gas-based cargoes over the next three years and with the expected completion of NLNG Train 7, which would be done in country by mostly Nigerian
companies.

“It will also export more liquefied gas within the period in context. The Maritime Sector holds a lot of promise for Nigeria and Nigerians, “he stated.