06 Jan 2022

The cabotage of things – The magnitude of lost earnings

In the maritime world, a country is measured by the percentage of the world’s total tonnage carried by vessels flying the flag of that country i.e. vessels owned by that country. People speak with nostalgia about the late 1970s and early 1980s when the Nigerian National Shipping Line (NNSL) had about 24 vessels in its fleet. The fact as revealed by the Nigerian Shipping Companies Association (NSCA) is that even in those days of the now defunct NNSL, indigenous shipping companies carried a mere 11 per cent of the total volume of Nigerian traffic and earned less than 9 per cent of the total freight revenue. Now Nigeria does not carry any of its crude oil under international shipping.

However, since 1954 when Nigerian Port Authority (NPA) Act was enacted up to 2006 when the historic merger of National Maritime Authority (NMA) and Joint Maritime Labour Industrial Council (JOMALIC) led to the emergence of NIMASA and later to the Cabotage Act of 2003 (and the landmark amendments in 2006), the Nigerian maritime sector has continued to evolve steadily. Alongside these milestones were giant strides of International Maritime Organization (IMO), International Labour Organization (ILO) conventions, Abuja Memorandum of Understanding (MOU) and other strategic alliances like membership of Associations of African Maritime Administration (AAMA) that greatly improved collaboration among the maritime players in the African sub-region.

Historically the maritime industry has been a harbinger of fortunes and an enabler of capacities for development and growth. The little beginnings of the maritime industry in the hands of the imperial and exploitative colonial administration has turned out to become a veritable source of massive revenue, industrial growth, manpower development and the door for Nigeria to benefit from global trade and bilateral relationships.

Even though it has been observed that about 85 per cent of marine vessels operating within Nigerian domestic waters i.e. Cabotage, are owned by foreign shipping operators; only about 5per cent of product tankers presently engaged by the PPMC (NNPC) in coastal lifting of petroleum products are owned by Nigerians. Such vessels earn about US$3,000 to US$8,000 a day, which amounts to about US$2.88 million for the 12 vessels monthly. The PPMC is reputed to spend about US$34.56million annually on coastal lifting out of which about US$32.67 million is repatriated out of the country annually. For instance in 2017/ 2018, the oil producing companies may have spent about US$20 billion to work their various offshore fields for the year under consideration, however, the estimated budget of the maritime (shipping) component of this expenditure is about 10 per cent which is about US$2 billion a year. Over 75per cent (US$1.5 billion) of this revenue is repatriated offshore annually because Nigerians do not own, operate and man the offshore vessels and services supporting offshore oil operations. This represents what Nigerians stand to earn if our Cabotage Act is effectively enforced.

In my book, Harnessing Nigeria’s Maritime Assets (2018), an appraisal of the indigenous participation in the Nigerian maritime sector by way of a comparative analysis of ship traffic volume from the year 2004 – 2013, showcased the foreign domination of Nigeria maritime trade which calls for strong maritime policy and appreciable strategies to compete favourably with the foreign operators’ monopoly. This domination is traceable to several reasons, which are militating against Nigerians in their quest to participate and compete with their foreign counterparts within the maritime industry.

The literature also revealed that the maritime traffic analysis between the year 2004 to 2017, there were a total number of 58,600 vessels calling at Nigerian ports and only 2,465 vessels were handled by indigenous operators through chartered mode and other forms which represented only 4.21 per cent of the total performance, while the foreigners had 95.79 per cent of the total volume.

The magnitude of revenue losses in freight earnings and the Nigerian economy have been dutifully documented by various maritime industry institutions, experts and stakeholders over the years. From available Agency (NIMASA) statistics and field work evidence, there were indications that between the year 2004 and 2017, the cargo throughput into Nigerian ports stood at 1,596,021,821.25 metric tons but only 66,413,462.54 metric tons were handled by indigenous operators which represented about 4.16% of the total tonnage. Foreign operators still dominated the trade with 1,529,608,358.71 metric tons representing about 95.84% of the trade between the years under review. This trend has remained worryingly consistent, making the realization of our Cabotage regime a high national imperative for regulators, advocators, legislators and operators.

• Dr. Jamoh, Director-General and Chief Executive Officer of the Nigerian Maritime Administration and Safety Agency, writes exclusively for The Guardian

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