GREG OGBEIFUN: Nigeria’s Tax Regime Hindering Shipping Industry Growth

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BUSINESS PERSONALITY

With a career spanning over 50 years, shipping mogul and Chairman/CEO of Starzs Investments Company Limited, Engr. Greg Utomwen Ogbeifun, knows the length and breadth of the Nigerian maritime industry. Ogbeifun, who turns 70 years in five days started like any other entrepreneur in Nigeria, but has today built a multi-million dollar shipping empire. His business establishments have provided employment to over 1,000 Nigerians. The billionaire-shipping magnate is a qualified Marine Engineer with First Class (Combined) Certificate of Competency, a member of the British Society of Marine Consultants and Ship Surveyors, the American Society of Naval Architects and Marine Engineers, the Institute of Directors as well as the Pioneer President of the Shipowners Association of Nigeria (SOAN). He also sits as a member of the Advisory Board of the Commonwealth Enterprise and Investment Council (CWEIC). He is the Chairman of the Technical Committee to build the Benin City River Port in Edo State. Ogbeifun’s in-depth professional experience and clarity of vision has made leaders in the maritime industry and even the federal government seek his counsel severally and he has served in different Shipping and Maritime related Ministerial and Presidential committees. He speaks with Eromosele Abiodun about his company’s succession plan, his life and career as well as his legacy projects as he addresses pertinent issues in the maritime and oil and gas sectors

Arrival to the World

I was born in Benin City in the then Western Region on February 11th, 1951. My parents were living in Aba at the time. My father was working in the Ministry of Commerce and Industry and was posted to Aba. In those days, if you were in the federal service, you were posted to any part of the country to work and that is why he was in Aba at the time. When my mother was ready to give birth to me, my father then sent her home to Benin. However, after I was born, my mother took me back to Aba. So originally and presently and in the future I am from Benin, I am a Benin man and my late parents hailed from that famous town.

Early Years

Well, the symbolic thing I remember when I was growing up in Aba and about Nigeria at the time is that Nigeria was so united and devoid of ethnic and religious sentiments such that you would not know that we were not Ibos or from that part of the country. My siblings and I didn’t know much about Benin because we didn’t live there. All we knew was that we were Nigerians and everybody related with one another as one. I remember that it was such a beautiful experience growing up in the Eastern part of Nigeria, that is, until the civil war broke out in 1966. At the start of the war, the then Military Governor of the Eastern States asked all the non-easterners to leave the East. This was our first encounter with ethnic division and it was when we had the rudest shock as a family to know that we didn’t really belong. For the first time, we began to feel that we were truly not one as Nigerians.

Embracing Humble Beginning

I am not from a middle-class family because my father was not educated. He was a carpenter in the Ministry of Commerce and Industry. That was his profession. It was a very humble beginning for me in life. At a very early age I realized that I needed to get out of that near poverty situation. And that helped me stay focused on anything I did in terms of my education, my behaviour and my character as a child and as a young adult. As said earlier, my father was a carpenter in the Federal Civil Service where he served in the Woodworks Section. Having said that, by the grace of God and because of his character, diligence and proficiency in his job over time, he rose to become an Assistant Technical Officer until he retired in Benin in the 70’s. My parents had 12 children; 6 boys and 6 girls. They had one set of twins but one passed away. Out of their 12 children, my parents lost 2 girls, leaving them with 6 boys and 4 girls. My father passed away over a decade ago at the age of 98 years while my mother passed away at the age of 100 years in 2019.

Turning 70

I feel very grateful to God for preserving my life to see the 11th of February 2021 when I turn 70. I am grateful to God for his faithfulness in my life, more importantly I am in sound health, and I mean sound health. This means a lot at a time in our nation where life expectancy is low and when you are lucky to be alive at this age. I am very healthy, I don’t have any iota of sickness in my body, no iota of blood pressure, no diabetes, nothing. So that is the first thing I am grateful to God for. The second thing is the great opportunity I have had over time to give back to my industry from what I do as a marine engineer. I am an entrepreneur; it has helped me to touch lives, to impact lives. And right now, all I am doing is finding a way to leave a legacy behind for the younger generation to benefit from.

Fire of Intellectualism

I started my early education at age of 3 in Aba. It was an era where you had to carry your slate on your head with your chalk in your hand. Then you would cry about going to school because you didn’t want to go, and your parents would beat you and insist that you go to school. It was a nomadic kind of education because I had my primary school in a couple of schools. I eventually finished at St. Patrick Primary School Ekulu in 1964. I later gained admission to Edo College, Benin City in 1965 and that was where I did my secondary school and Higher Secondary (HSC). In 1971, I got a scholarship from Shell BP to go to Europe to study Marine Engineering. I didn’t go to a conventional university. It was a specialized training where we were trained as professionals. The program was structured for both theory and practical. We would spend some time in college then we would go to sea on a ship for some time, then you would go back to college again.

Shell Scholarship & Career Path

That is a very good question. Let me start by correcting the impression again. Marine Engineering was popular in the country even at that time. Don’t forget that Nigeria had a flourishing national shipping line and these ships were handled by engineers. I was a science student but I knew that I didn’t want to be a conventional engineer. I didn’t know what I wanted to be until I saw an advert in the newspaper. I always read newspapers. My father used to buy newspapers for his pool business and I would pick up and read the newspapers after he had cut out the pool section. Back then, there was a Nigerian publication called the Nigerian Outlook, which always advertised for scholarships and things like that. In those days, almost every day there was one scholarship or the other in the papers. So that was how I came across an advert by Shell BP that they were recruiting to train young Nigerians in Marine Engineering and Navigation.

However, Marine Engineering caught my attention and I applied. It was destiny and providence because out of about 4,000 applicants who applied in 1971 only four of us were selected. Two to study Marine Engineering and two to study Navigation. Even though we were literally assigned to the courses but in my own case, I believe it was destiny because at the final panel interview, where they allocated which course people were to do, they told me that ‘in your own case we see you are interested in Marine Engineering.’ They (the Shell Panel) had noticed that I had also received a federal government scholarship to do Marine Engineering in the Guildford University in the UK. Here I am in the middle of two UK scholarships: One to study a degree in Marine Engineering and the second one to do professional Marine Engineering.

To have an insight into what the Shell BP scholarship entailed, I started going to the British Council to read about Marine Engineering. I went further and made enquiries and found out Shell had operations in Warri and that there were some Marine Engineers there. So curiously I decided to go to Warri to go and look for any of the Marine Engineers who could speak to me about the difference between the Shell scholarship and the federal government’s scholarship. So the moment they told me that Shell from day one would put me on salary, I accepted it. Considering my background, knowing how my parents were struggling to pay the fees of my siblings, I just decided to embrace the Shell offer in 1972 and I travelled to England for training.

Grace of God & Destiny

Well, I must say that first of all you used the word luck, but I will say instead the grace of God and destiny. Now, I believe that every time a child is born, God already has set out a path for him/her. Sometimes out of our own will we deviate from that path because all sorts of things happen! But my parents were not believers or what it is known today as ‘born again’. They were Christians though. So, I would not say it was because of plenty vibrant spiritual prayers or anything like that, not at all. I believe that It was the grace of God. God had already destined that I would be who I am today. And so I will continue to walk in line with his will. But going back to your question… being diligent is very important because that is what attracts more favour to you. Honesty and integrity in your work must be intact no matter the circumstance or the situation.

So, if you add the aforementioned to your skill, you will definitely soar high. But regrettably what I see these days is that diligence is lacking in a lot of our young people. Integrity is nowhere to be found and honour is gone. I am coming, knowing that they are actually going. In fact, that has become our life style. That has translated most times in the things we do to the extent that when people tell you this is white, you better start looking for black. So, this is not helping the young generation who will need all the support and assistance that they can get to survive in these very harsh economic realities that we find ourselves as a nation.

Therefore, the few opportunities that are available, the few who have honor, integrity, and diligence in what they are doing are inevitably also making it even in these difficult times. In addition, till today, these remain my watch words, they remain the watch words that I can give to my children. Those three things are very key and when you do that, you are walking in line with the will of God and God will definitely help you.

Life Lesson

I have four companies, the very first one is Starzs Investments Company limited. That is the very first I company I started on the 1st of July 1986 and that is the Company that has grown to own and operate 12 ships today. And that is the Company I have just retired from and my daughter Iroghama has stepped in as the Managing Director/Chief Executive Officer. I own about 96% of that company.

In 1996, I established Starzs Marine and Engineering Limited, which is the ship-repair company. So Starzs marine is the ship dockyard company known as the Starzs shipyard in Onne. So those two companies are two different legal entities. Now, Starzs marine, which is the ship repair company, started operations in the year 2000, that is about 21 years ago. And I do not wholly own that company, I have other investors but I am the pioneer and the highest shareholder but I have other investors there. I also have Eaglewatch Security Limited that provides private security guards within Rivers and Edo State and we have almost 600 guards.

And I did that as a means of creating jobs for young people. It is a means of taking young people off the streets, putting them in uniforms, training them to protect life and property. This is a contribution I am making. Now, my latest company, which is Diverse Engineering Supply Limited is my personal birthday present. On February 11th when I turn 70, I will be dedicating an Autocare Center of international standard which I have just built in Benin. It is going to be a workshop for maintenance of high end and middle end cars. For me it is like a hobby that will again create jobs, and of course provide quality services. It is a state-of-the-art center which will be properly commissioned after the pandemic, because then I will be able to invite a lot of stakeholders to come and tour the facility.

Loyal and Dedicated Staff

My loyal and dedicated staff, there are staff members, who have been with me for more than 20 years in Starzs Investment. Everybody in that company is family and whatever that company has become just like all my other companies, I attribute it to all these people present, and past who have gone through the system and helped to build it up.

Change of Baton

Let me correct that impression. Iroghama coming into the company as Managing Director/CEO of Starzs Investments Company Limited is not an automatic succession. Consultants who I contracted from London about six years ago to come and look at my business, restructure it to outlive me brought her in. Iro was already running her own business here in Lagos. So, the consultants from London recommended in their reports that they wanted her in the management of the company. I was surprised because two of my children are marine professionals. One of my sons, Osasu, is a Professional Marine Engineer and another one, Efosa, is a trained Naval Architect currently working in Canada. And my mind then was that the Marine Engineer will probably take over Starzs Investments Company Limited. They insisted that they wanted my daughter to be involved. It was a case of getting me to be convinced because Iro had and still has her own vision and dream.

But when they recommended that she should come in as a Chief Operating Officer I said no, that she had to come in as an Executive Director. I also mandated that we would give her one-year of induction after which we would evaluate if she was capable of the responsibilities. I then passed the matter to the Board to handle because in all the companies I have always made sure that I had a Board that is stronger than me. That was how Iro became part of the team. But guess what, in six months, Iro was leading all of us, I mean practically all of us. She had built bridges between us and clients that we were struggling with. She changed things around and brought in modern technology. Subsequently, after two Board Meetings and Management Reports, which she presented, the Board said why are we wasting our time that they wanted to confirm her as COO so she could have the authority to do more of what she was doing. That was how Iro became the COO five years ago. It was based on the Board’s recommendation. Obviously, over time she has grown the company, at the time she came in we only had three ships, now we have 12 ships.

Belief in Competence

I am very concerned about that because I have seen so many family businesses that did not outlive the owner. My business is definitely not structured on the family. Any family member, who deserves to work in the businesses will come in. But even though the businesses are not family businesses, the family owns the businesses. But the family does not have to run the business. I think I need to drive this on because a lot us entrepreneurs make that mistake. Your children don’t have to run your business. So, let the business be run well by professionals rather than saying my child automatically takes over. I need to clarify this.

Milestones to Conquer and Legacy to Outlive Him

As long as we live there will always be ideas to accomplish, you may call them milestones to conquer. I can wake up in the middle of the night develop any idea that God put in my heart. In terms of milestones I will tell you three major things. Number one we are expanding Starzs Marine and Engineering Limited Shipyard from a capacity of 500 tons floating dock to a capacity of 7500 tons capacity with ability to dock ships up to 100 meters long and ability to dock between 6 and 10 ships and repair them simultaneously. More importantly, we are incorporating new ship building capacity for ships up to 70 meters long. Now for me this is the biggest thing God will help me actualize in my life time.

The next phase we are going into we are signing a contract agreement with the consortium of Transaction Advisers based in Canada and in Holland, who are going to take over this expansion project. They will develop the feasibility from now up to commissioning. And this will take about twenty -four to thirty months by the grace of God. That project, there will be none like it in the Gulf of Guinea, even in the entire West Africa. And that project will turn around the fortune of the Nigerian Maritime Industry. Because most companies operating in this country were going outside. With that project established, virtually all those ships will be built in this country.

As at now, between 80% and 85% of ships operating in Nigeria, are leaving this country to go for repair opportunities outside this country. With that project established that will no longer happen in this country. Instead ships outside this country will be coming to Nigeria for repairs. Now this is not about Starzs, this is about the Nigerian Maritime Industry and this is about our Nigerian economy. And this is about job creation for the teeming youths. So that is the major thing I am putting right now and I need prayer, I need encouragement from Nigerians. Now the second one, you may be aware that my state governor, His Excellency, Governor Obaseki appointed me to be the Chairman of the Committee to build the port which is now called Benin River port in Edo State. So that in itself is a major project we are also working on. It is already ongoing and if I am able to actualize that, that is another huge legacy by the grace of God, that I will be leaving for my home state and for the future generation.

And then of course more recently is my automobile workshop, which is more of a hobby for me. I want to establish a workshop that is of international standard. What do I mean by that? The processes are going to be totally ICT driven. Another key driver is the training of the people and the skill I want to give to them. It is important to note that there is a Technical training College in this town (Benin) which I want to link to the workshop so that they can use the workshop as their training center for the industrial training of the children in that school. All the three projects are legacy projects.

Family Inspiration

The name of the floating dock is actually a combination of the name of my ex-wife “Christie” and “Barbara” the wife of a very dear friend John Lester who was instrumental to the establishment of the shipyard. This story is told in detail in my autobiography. Family inspiration, yes, in every marriage I share in details everything I do in my life. And my spouse or my partners have been very supportive, either with their prayers or making the home for me to be able to actualise my programmes and dreams. I can say that they have always been supportive. Even with the children, there might be some occasions, which one does not expect it to be but that is not enough to completely undermine the contributions that my families have made to the success I enjoy today.

Favourite Past Time

Number one is my relationship with God, I try to spend as much time as I can with God, by fellowshipping, I must remember to study the word and pray. Number two, is dancing and third one is touching lives by making opportunities today for the young people. Every day, I get numerous phones calls, text messages, WhatsApp messages, emails of young people who are struggling or looking for a lifeline to become relevant in life. So, I spend a lot of time doing what I can, listening to them, it is not all about money. Sometimes these young people just need counsel, they just need advice, they just need somebody to just give them a listening ear. And then you find out after all of that, that all they need is just a little bit of financial support. I receive a lot of that, unfortunately we do not have a system that makes that opportunity for a lot of young people, not in our schools. My hobby is work. I can sit on my computer for 24 hours and I enjoy myself.

Good Governance, Good Leadership

The answer is very simple and I will bare my mind. If anything is going wrong in the Starzs group of companies, who takes the blame? So as far as the country is concerned anything that is going wrong, the head is to take responsibility for it. The President of the country takes responsibility for it, irrespective of who is actually responsible. Until the head rises up to the occasion, to say whatever is happening I take responsibility, What can I do? We are going nowhere. As long as the head is indifferent, we are going nowhere. Because the authority, power, God has vested it on the head. Look at what is happening in America now, the head in the last administration was responsible for all the things that have happened in America.

There is a new administration there now, he is already reeling out things to change the destiny of the people down to the man on the streets. So, we don’t go too far. The appointments you make, the people you put in sensitive positions, the accountability that you don’t check and you leave like that, you are destroying the Nation. We can’t run away from it. So, until we get it right from the top, until we get our process of choosing our leadership right, until we put the right people in the right positions, we will continue to wallow in the wilderness. I was watching Okoya’s 81st birthday on television, I admired that man. He was saying the same thing, that we should give opportunity to the youths.

Create opportunities for the youths, support the youths, encourage the youths. It is not what you say by mouth. In his own case you can see the multitude of people his life has affected. In my own case today, at least I empower and I employ over a 1000 people. So, if there are 100 of such people who are not selfish, who are not spending the billions they have on private jets, and the limousine they have, who are more interested in giving access to the less privileged that come near them and impact them. If we have all these people who are so privileged doing a little here, 500 here or 1000 there, life will become meaningful. Let us do our own little bit. Yes, it is difficult, it is challenging, if I remove my shirt and you see the scars on my back, you will read my book and you will find that I didn’t drop from heaven. I paid my dues, and so I have every reason to be selfish. But I said no because we are in transit. If you don’t do something good or leave it better than you met it, then you have failed in your sojourn.

Moving Nigerian Maritime Forward

The answer is very, very simple, number one, you cannot talk about maritime, you cannot talk about shipping, without a ship. Everything in maritime has to do with ship. So if as a country, shamelessly, with over 200 million people, with all our import and export, dry and wet cargo we do not own a single national ship that is plying the oceans, that is flying the Nigerian flag whether it is privately owned, or publicly owned or public private partnership owned. Nothing. This country, as at the time Obasanjo left office as a military head of state in 1979, had 29 ships owned by Nigeria National Shipping Line (NNSL) trading worldwide, bringing in our imports and taking out our commodities. Can you imagine the number of people that fleet was employing? We had the operational head office in Liverpool in England then the administrative office in Wharf Road in Apapa.

It was National Pride that our flag was all over the world. When Obasanjo came back as a civilian president in 1999, there was not one ship left. Nigerian National Shipping Line with all those ships was liquidated in 1995 due to bad management and a series of other issues. That platform that created jobs for Nigerians, trained Nigerian mariners, seafarers, provided opportunities for maritime lawyers who signed the contracts, for maritime insurance firms which insured the ships, and everything associated with maritime and shipping, once that platform disappeared, everything disappeared. And that is where we are from 1995 till date. That is why you find that even though we have the Maritime Academy of Nigeria (MAN) Oron, training people there, when they come out, they have no ships for trainees to get their sea-time on. That is almost similar to what is happening in our aviation industry. In our aviation industry it is even better, private entities have been able to float airlines. So, those who train in aviation school, they have these private airlines to do their practical. In the case of our shipping industry, when you leave the maritime institutions there is no place for them to go and train.

Advice to Stakeholders

When Rotimi Amaechi became the Minister of Transportation, in his first term within a couple of months of becoming a Minister, he decided to take the bull by the horn. What did he do? He said we must re-establish a Nigerian fleet trading globally. He gathered a few professionals and set up a committee to carry out a study on how to re-establish a Nigerian fleet, whether it is private or not. Then he also set up a committee to restructure the Nigerian Shipping register in NIMASA. So, these two committees went to work. I was in the Fleet Committee. We finished our report, we came up with a recommendation, he now turned our committee into an Implementation Committee under the Chairmanship of the Nigerian Shippers Council. We went around the world to find out what did other nations do to be able to have their fleet.

We did that survey and came back with the recommendations. It is hinged on one thing. Our tax regime in this country makes it difficult for anybody, public, private or public private partnership to be able to successfully operate a shipping line. Our tax regime makes it difficult. In the countries where they are successful in their shipping business, if you are a national or if your company is registered in that country, and you are buying or bringing in a ship, when you bring it in, you bring it in at zero duty. Importation duty is zero, they are giving you 5-year tax holiday, they are giving you concession of tax percentage, they are giving you concession of storage tax, they are giving you all of these because they recognize that the business is highly capital intensive. And therefore, they need to give you an enabling condition that encourages you to at least operate until such a time that you have recovered your investment and you can begin to thrive.

In our own case, the reverse is the case. I will give you a living example, two to three years ago, we commissioned our latest and newest ship. I brought that ship in from China. I insisted that, that ship must be registered in Nigeria. I insisted that the crew on that ship must be Nigerians, so I took my crew from here to Shanghai to go and sail that ship, bearing the Nigerian flag, back to Nigeria. Then when the ship arrived here, the total cost of importing that ship into Nigeria, duty and everything, it was 14% of the cost price of building that ship. It cost me $18 million to build that ship, so I had to pay 14% in total to bring it in. Even though that ship was coming to work for one of the international oil companies (IOCs). But now if my foreign counterpart who is bringing in a similar ship into the country to execute the same contract, he comes to Nigeria, with a foreign ship and all he does is to pay 1% custom bond. One percent of the value of his ship, just a bond. He pays that and he comes into the country.

And he and I are supposed to bid for the same contract. So, for being a Nigerian I am already disadvantaged commercially in that bid. Foreigners have an upper hand in winning that contract. Why? In that foreigner’s country, he doesn’t have to pay that sort of duty that I have to pay. And then when he even comes here, the conditions for him to come into this country is easier than me. What happens? You now have foreign companies taking over our businesses because the Nigerians cannot compete. Our tax regime is even against us to be able to survive. The few of us who are there, we are there at the skin of our teeth, and one of the things that is keeping the company and myself going is the professionalism, which I have infused into the system.

This is what some IOCs find too tempting to let go. So, you find that even when you want to provide the service it is at your cost. After our due diligence as a Committee, we presented our report to the government on what needs to be done, we went to The Presidency to make this presentation. We met with the National Planning Minister then Senator Udo Udoma, We went up and down, presented to the Vice President, up till today nothing. That is why it is difficult for people to build ships, from Nigeria to trade globally. You look at the Apapa Port, all the ships you see there are all foreign ships. You can imagine the job creation in that sector, you can imagine the loss in freight. All the insurances, all the legal work, everything foreign.

Commitment to Shipping & Nigerian Ownership

From Nigerian Maritime Authority we moved to Maritime Labour Council, which later merged to form Nigerian Maritime Administration and Safety Agency (NIMASA). An act was also established called the Cabotage Act. Now the Cabotage Act was predicated on four pillars: That any ship that will operate in Nigeria will be built in Nigeria, must be manned by Nigerians, must be owned by Nigerian companies and must be registered in the Nigerian Ship Registry. There was a plan that a certain percentage of funds from contract earning should be earmarked to assist Nigerian shipowners that want to go into the shipping business or expand their fleet. I have contributed a substantial amount to that fund but up till today nothing has happened and the funds have not been disbursed.

Satisfied with Contribution

Absolutely, absolutely satisfying! Very grateful to God for giving me the opportunity to be able to do the little I have done for the maritime industry.

No Regret

Yes, I wish I was as less than lucky as some men being married to only one wife in my life time, but I wasn’t that lucky. But thankfully, God has blessed me with 8 lovely children and I am grateful to God for that.

Love for Sky Blue

Sky Blue is my best colour. When you are on that ship in the middle of nowhere and you look to the right and left, to the east to the south, to the north all you see is the thick blue ocean. Beautiful. Sometimes rough, sometimes calm. But it reminds you of the awesomeness of God. Sky Blue is my best colour.

Hobby

Before the COVID-19 Pandemic, I have always liked to go on cruises with my family. My wife and I were actually looking forward to going on a cruise last year before the Pandemic. That used to be a beautiful outlet for me, otherwise I am a homeboy.

Greatest Lesson

The greatest lesson is that this world is not our home, we are only passing through. And the biggest lesson is to endeavor to leave good footprints on the sands of time as you pass through this world.