Ogbeifun: Ban on Cabotage Vessel Will Transform Nigeria’s Economy

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Managing Director/CEO of Starzs Marine and Engineering Limited, Mr Greg Ogbeifun

Recently, the federal government through the Nigerian Maritime Administration and Safety Agency proposed a phased ban on Cabotage vessel importation. The Immediate past president of Ship-owners Association of Nigeria and Managing Director/CEO of Starzs Marine and Engineering Limited, Mr Greg Ogbeifun, in this interview, told Eromosele Abiodun, that the policy will benefit government and the economy if implemented. Excerpts:

Recently, the Nigerian Maritime Administration and Safety Agency (NIMASA) set up a 15- man committee whose members include the President, Ship Owners Association of Nigeria (SOAN), President, Association of Manning and Crewing Agents of Nigeria (AMCAN) and African Ship Owners Association and was also given the mandate to source, facilitate foreign direct investment (FDI) into Nigeria for ship building and repairs by foreign ship building, repair yards. This we understand will lead to phase ban on Cabotage vessel importation, how do you respond to this development?

I was away from the country when I heard of the federal government’s announcement through the NIMASA of the phased plan to gradually stop importation of foreign built vessels into the country. For me, it is probably the boldest policy statement that has been made in the industry with respect to genuinely wanting to grow in-country capacity in the area of shipbuilding.

The statement is very commendable but we have to understand that it behoves on every one of us to make that happen. Primarily, it behoves on the people who acquire ships from abroad to see this as a positive step towards investing in this country, for this country, for the people of this country, and for our economy. And when you talk about this, everybody wants to think of the ship owners. Who are the ship owners? You can think of companies like Starzs, Marine Platform and many others. But don’t forget that NIMASA is a ship owner; Nigerian Ports Authority (NPA) is a ship owner. So, the ship owners we are talking about are both public and private. Therefore, we have to come together to understand that this policy that the government has come out with, laudable as it is, will affect even the government, because the government through the NPA, is one of the biggest buyers or builders of ships imported into the country. Government cannot come out with that policy and tomorrow you hear that NIMASA is now ordering for security patrol vessels from Damen Shipyard or wherever, or NPA, who as you know, a few months ago brought in new tugboats built by Damen, will also go back to Damen to say build us a ship from abroad when government has made such a policy statement. When I read it, I said this is great, because initially everybody will look at the international oil companies (IOCs), who are the main employers of vessels, particularly upstream and be thinking, what are the Total, Shell, and the Chevrons, going to do now that this policy has come out? But in the same vein, what is NPA, NIMASA going to do now? I hear about security contracts to police our waters. We can’t police our waters without using boats. So the boats they are going to use, are they going to be built in this country or will they be built outside the country? It is a laudable policy but the implementation is what all of us have to be ready to contribute to. It is not to be left for government or the IOCs or the ship owners.

President Muhammadu Buhari recently assented to the anti-piracy bill. Do you think the enactment of the law will make any significant impact in addressing cases of pirate attacks and other maritime related crimes on our waters?
You and I know that the country is not short of beautiful acts, laws and bills, but the problem is always implementation. I don’t understand how the anti-piracy act, now enacted, is going to solve the piracy problem. Maybe when they print it out, laminate it and put it inside the water, it will stop the piracy. For me, that’s an exercise on paper. What does it mean in terms of actually addressing the issue? Is it because there was no anti-piracy Act that piracy has been going on)? Or is it because platforms that had been put in place or that should be in place to address it are either missing, or not being funded, or not being properly managed to address the issue? I don’t know. That’s not my area of strength, to be honest with you. But, I think an issue like piracy, hostage taking, kidnapping, and what have you on our waters is directly related to unemployment. We have to find something for the people to do. If we mobilise platoons and military installations all over the place, you are only putting temporary pressure on the problem. You still have a whole army of people who have no job, whose environment is degraded and who have no hope to contend with. So, whilst we are putting an anti-piracy law and other laws in place, can we also on the other hand, look at what we can do to address the social issues? Can we enable companies like Starzs, for instance, to make their shipyard expansion project possible, so that 1,000 Nigerian youths can be employed? Can we make Nigerdock start building ships so that those youths, say from the Niger Delta, who were sent out for different trainings under the amnesty programmes can now be absorbed into productive ventures and thereby, be able to remit money to their families back home? That is the way we can fight piracy.

If we are not addressing these issues and you are enacting laws and building armies and setting up security platforms and all of that, and you think that is the solution, let us wait and see. If you are coming out with an anti-piracy act, you must also come out with a programme to create opportunities that will gradually reduce what we are trying to fight. If you don’t do that and you focus on fighting piracy, you are wasting your time. If more ships are going to the eastern ports, more stevedores, seafarers will be employed. That will at least reduce the number of teeming youths who are currently engaging in maritime crimes.

With the moribund state of the steel industry, which is a crucial aspect in shipbuilding and repair, how successful will this policy be?
The steel industry has to be active. We may initially start by importing steel. If you don’t also look at that sector in-country to become functional, then, you are weakening the implementability of this very nice policy. So, it is beyond just looking at boats. We need to develop the steel sector to be able to complement this policy. The policy statement is enough to reactivate the steel industry. The few ship repair companies in-country have some level of skilled labour, but for the human resources to build ships, we can start with international skilled personnel and gradually build in-country manpower capacities. So, that is not a challenge. Nigerdock is a case in question. When Nigerdock was built in the ‘80s and commissioned, the Polish people were the real skilled ship repairers who operated that yard. But today, you will agree with me that a large number of the workforce there are Nigerians. The biggest single element that is critical to the actualisation of this policy is the maritime infrastructure, the shipbuilding yards. We have a few shipbuilding yards that can do shipbuilding and ship repairs. West Atlantic Shipyard that started with building aluminium crew boats a few years back used to pre-fabricate the components outside the country, bring them to Onne in Rivers State, and assemble them. They were launching crew boats built in-country, but they had to stop after a while because it was40 per cent more expensive to build those boats in-country by that method than to bring them from outside the country because of our tax policies. So, they migrated from building boats to repairing ships. That has to be revisited. Why did they stop? It is because of our tax policies. So, that has to be reviewed. It is the same thing that is dogging the emergence of another national fleet. Our tax policies, our tax incentives have to be looked at to make it competitive to build boats in-country than to build outside the country.

How feasible is the 2020 deadline for implementation of the policy?
Looking at the timeline set, I said to myself, anybody who expects that we must achieve this 100 percent is being unfair. Let us start first and if at the timeline, we have only achieved 10 per cent, we have started something; we would have set infrastructures, systems in place that we could build on. Let us not wait after two years and start blaming NIMASA that the policy did not work, which is a Nigerian thing. After two years, we can then review what we need to do to take it to the next level. It may not all happen in our lifetime. But let it be that after our lifetime, it is on record that we did what we could do and left something for the next generation. That is my position on that because all I am hearing is that the policy timeline can never be achieved.
You don’t defeat yourself before the matter starts. If all we are able to achieve within that timeline is to put necessary infrastructure in place and produce one ship in each category; that is an achievement because the next one is just to repeat what you have done and we can develop from there

It has been over three years of talk with no action on the issue of Nigeria acquiring a national fleet. As a ship-owner, do you see any hope in this project?
I read severally, the immediate past Minister of Transportation, Rotimi Ameachi, kept saying that the reason the idea of national fleet failed was because ship owners were not able to bring 60 per cent of the required amount, which amount nobody knows, and the Executive Secretary, Nigeria Shippers’ Council (NSC), Hassan Bello, is saying that there are issues being addressed by the government. Issues relating to fiscal incentives and tax policies, to create the enabling environment for the emergence of the national fleet. And these are issues which the fleet implementation committee, of which I am a member incidentally, is engaging the Ministry of Budget and Planning and the Presidency on. We may, however, not make any headway and will be deceiving ourselves unless there is a convergence between the positions of the former minister, who is critical to what we are talking about and the position of the committee he set up. The assignment of our committee did not even get to any point where any ship owner was asked to bring any amount. I was involved in the committee that went to Singapore with the former minister to talk about the fleet implementation with Pacific International Limited (PIL). PIL came back and pulled out of the whole discussion because they said our tax regime does not favour such an arrangement, and that is what indigenous ship owners are suffering today. If you as a Nigerian bring a ship into the country, you pay full import duty of about fourteen per cent of the value of the vessel, but if you are a foreigner; and you bring the same ship into the country you will post only one percent custom bond for temporary importation.