Bello: Poor Policy Framework Obstacle to Nigeria’s Fleet Development

Hassan Bello
Executive Secretary, Nigerian Shippers Council (NSC), Hassan Bello

Eromosele Abiodun

The Executive Secretary of the Nigerian Shippers Council (NSC) Mr Hassan Bello has blamed poor policy framework and inconsistency, paucity of funds, lack of technical and human capacity and imbalance in trade terms as obstacles to the development of an indigenous fleet.

Bello who stated this at the 20th anniversary lecture, award and investiture of patrons organised by maritime journalists in Lagos, expressed regrets that the inability of many of the promoters of indigenous shipping companies to acquire the needed technical capacity to own and manage ocean going vessels has helped to worsen the situation.

More than 5,000 vessels call at Nigeria’s seaports annually, all of which are foreign-owned due to the absence of a vessel on the nation’s fleet. This development has given rise to huge capital flight and contributing to the growing youth unemployment rate with the attendant rise in crime rates.

According to him, “In 2015 alone, Nigeria spent over $9.1billion on the payment of freight charges for dry and wet cargo to foreign ship owners due to the absence indigenously owned vessels that ply the international trade routes.”

Bello, who is a member of the Nigeria Fleet Expansion Committee put in place by the Minister of Transport, Mr. Rotimi Amaechi, also decried the imbalance trade policy where Nigeria’s crude oil and other non-oil exports are carried on Free On Board (FOB), while her imports are carried on Cost, Insurance and Freight CIF, both of which exclude Nigerians from determining the vessels for the shipments.

Reacting to some of the federal government’s policies, he said: “Customs import duty/tariff on vessel, which currently stands at 14 per cent of the ship value has been described as prohibitive. This accounts for why vessel owners, including Nigerians prefer foreign registry, thus they bring in their vessels under Temporary Importation Permit TIP, which attracts only one per cent tariff of the total cost of acquiring the ship, which is renewable annually.

“Similarly, for Nigeria to reap the benefits of the huge maritime potential available to her as a littoral state, she has to urgently address the trade imbalance under which Nigeria’s exports are shipped on the basis of FOB, while her imports are lifted on CIF basis.”

He regretted that given these and many other policies, the oil rigs used on Nigeria’s waters as well as other vessels that service them are owned and controlled by foreigners.

According to him, the situation is even made worse by the fact vessels used under the Coastal trade and Inland Shipping Cabotage regime, which are supposed to be exclusive preserve for Nigerians under the Cabotage Act 2003 are also mostly owned and managed by foreigners.

He however noted that all hopes are not lost, proposing a well-thought out indigenous fleet development programme by the government, which will not involve government ownership and funding of vessel acquisition rather creating the necessary atmosphere that would encourage local and private investors to invest in vessel acquisition with the assistance and cooperation of the Nigerian National Petroleum Corporation (NNPC).

The Director General of the Nigerian Maritime Administration and Safety Agency (NIMASA), Dr Dakuku Peterside, had 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 N28.55trillion in 2019 and N30.11trillion in 2020, while foreign reserves is $44.7billion in 2019 and $61.7billion in 2020.”