Attaining Sustainable Growth in Nigeria’s Maritime Sector

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Executive Vice Chairman of SIFAX Group, Dr. Taiwo Afolabi

The Nigeria Maritime sector recorded tremendous improvement after introduction in 2006 of the Nigerian Port Reform Policy. Yet, with the potential to become one of the nation’s cash cows the sector is still largely underperforming. Bamidele Famoofo reports

The academia, practitioners and stakeholders in the Nigeria Maritime industry gathered on the JF Ade Ajayi Auditorium, University of Lagos, recently, for the 4th Annual Maritime Conference organised by the Maritime Forum of the University in honour of the Group Executive Vice Chairman, SIFAX Group, Dr. Taiwo Afolabi.

The primary objective of the conference titled: “Innovations and Practical Reforms Towards Sustainable Growth in the Maritime Sector,” was for participants to come up with innovative ideas that would sustain growth in Nigeria’s maritime sector.

Afolabi set the pace for the conference with his welcome address, which challenged operators, regulators and the academic community to come up with practical recommendations that will unleash the huge potentials of the industry.

He said: “The nation’s maritime industry has overtime seen various policies such as the port concessioning reforms, truck standardisation policies, cabotage law, maritime safety laws and several others with the sole aim of eliciting growth in the sector. But, may l say that while some of these policies have catapulted the industry to its next level growth, more policies/reforms and most importantly a strong implementation mechanism is still being desired.”

Whilst the SIFAX helmsman did not fail to acknowledge the achievements of port reforms introduced by government some 13 years ago, which include among others, shorter turn-around time for vessels at berth, shorter cargo dwell time, improved safety of cargoes at berth and at terminals as well as less human interface and contact, he said the reforms ought to be all encompassing as the port alone does not represent the maritime industry.

“For the Nigerian maritime sector to witness exponential growth, its drivers must aim at sustainability of the policies that will drive the industry,” he opined.

The challenge to chart a course for sustainable growth for the industry was given the first shot by students of law from the University of Lagos and their counterparts from Lagos State University in a debate. They suggested the Nigerian economy will find its bearing only if the economy becomes blue. They argued that embracing ‘Blue Economy’ is the best way to unleash the hidden potentials in the maritime industry in Nigeria. Blue Economy is making sustainable use of ocean economy for economic growth. Blue economy, they argued, was the way to achieve a true economic diversification given its potential to deliver nothing less than N7trillion revenue to the nation annually.

The students revealed that there were at least four other sectors within the maritime industry besides ports, yet to be fully explored for revenue generation in Nigeria. The sectors include among others marine transportation, fisheries and marine tourism.

The leaders of tomorrow proposed a national blue economic policy by government to kick-start the process. They asked government to set a target of at most 10 years for it to be able to vigorously pursue the implementation of the policy, while addressing the necessary legislative gaps that might hinder the implementation of the policy. Effective maritime governance is another critical issue they believe government must take seriously if the maritime industry in Nigeria must effectively contribute its quota to economic growth.

Government was advised to go into active partnership with the private sector and other stakeholders in the country to make headway in driving the blue economy. “For the economy to go green, it must first go blue,” they concluded.

Besides the debate session by some selected Nigerian Universities, a plenary session, which addressed the theme of the conference, had key operators in the industry discussing cogent issues that must be given priority for their industry to be able operate at the level required to help economic growth and development in Africa’s largest economy.

Panelists who include Chairman Nigerian Ports Consultative Council, Chief Kunle Folarin, unanimously decried the prevailing law in the industry, which makes room for liberal participation of foreigners to the detriment of indigenous investors. They called for policies that will develop indigenous capacity and allow local investors to move into investing in vessels and also be assured patronage by the international oil companies (IOCs) just like their foreign counterparts.

Executive Vice Chairman, ENL Consortium and Chairman, Seaport Terminal Operators Association of Nigeria, Princess Vicky Haastrup, lamented, saying “The current policies in the industry do not encourage local investors to invest in vessels as the IOCs favour their foreign counterparts when it comes to patronage. But we fail to realise that these foreigners take the money away from our economy as against their local counterparts who will keep the money in the economy if given the same opportunity.”

Another panelist, Mrs. Adetola Bucknor-Taiwo, Partner, Paul Usoro & Co, said the weak links between policy formulation and implementation must be strengthened. “Some laws guiding operations in the industry are not implemented as required,” she alleged.

Bucknor-Taiwo called on government to encourage participation of indigenous shippers through engagement and provision of funding. She urged Association of Shipowners to constitute themselves into a pressure group to compel IOCs to patronise them. Meanwhile, she called on local shipowners to also ascertain that they do the needful to earn the trust and patronage of the IOCs, just like their foreign counterparts.

Folarin decried what he described as ‘the dependency syndrome’ on the part of indigenous investors, which is limiting them from excelling in the industry. “Indigenous investors must seek alternative ways to tackle the challenges hindering them from competing in the industry.

The abundance of opportunities in the sector must be explored by local investors,” he stated.

Folarin, like his other colleagues called for more local inclusion in the industry, arguing that the near monopoly situation in the banking industry in Nigeria should be replicated in the maritime industry.

Bucknor-Taiwo said the Cabotage law must be strengthened if Nigerians must enjoy a bigger share in the industry. She called on the federal legislative arm of government to help secure the rights of Nigerians operating in the industry by enacting enabling laws. “The government of Nigeria is the one responsible for the killing of Nigerian businesses in this industry as they allow foreign companies to flourish at the detriment of local businesses,” she alleged.

Executive Director, Operations, Oceandeep Services, Mrs. Rollens McFoy, claimed that weak implementation of the cabotage law was responsible for inadequate job opportunities in the maritime sector. She argued that with proper implementation of the cabotage law, 70 percent jobs could be ascertained in the industry.

Chief Executive Officer of Skelas Limited and Immediate past Chairman, Association of Nigeria Licensed Customs Agents, Prince Olayiwola Shittu, rounded off the session in a comical manner when he described Nigeria as a funny experiment. His words: “Our laws are crafted to fail from the onset because of rooms created for political patronages.”