Nigeria requires a practical and holistic plan to
address myriad of challenges facing her maritime industry and to
harness the potentials for the benefit of the nation. The sector is
vast and highly untapped despite years of persistence and several
proposals to revamp it.
It is an employment-driven industry and can overrun oil and gas
contributions to domestic product of this country. These
opportunities are wasting. The challenges are enormous and
multifaceted. They relate to Access to Credit, Financing, Obsolete
or ineffective Laws, Poor Infrastructure, Human capacity, Lack of
political will to engineer fundamental reforms.
Cabotage And Local Content
In the last 10 years, there has been new laws introduced to
develop capacity and maximize the potentials of the Maritime
sector; Cabotage Act 2003, NIMASA Amendment Act 2007, Nigerian
Content Development and Monitoring Board etc.
The general opinion of industry stakeholders is that the laws
are just good on paper because the infrastructure to make the laws
work is not there. There is also lack of finance to make the
infrastructure available.
So, what needs to be done to address this issue in the industry
where majority of Nigerians are still not participating.
The Cabotage and local content regime are landmark legal
developments and have been recognized as a fundamental tool in
restricting coastal trading to the citizens of Nigeria. Without
disregarding the concerted efforts of the regulators such as
NIMASA, the current capacity is below average.
How can we translate the objectives of the law to implementable
framework, How can we improve the operational environment for local
operators to enhance their participation and businesses? What about
the fiscal regimes that affect indigenous operators within the
current implementation framework. Many operators still rely on
foreign partners to execute simplest of tasks.
The leakages in the rules which favour foreign enterprise should
be critically assessed and blocked. Why is it easy to use foreign
owned or registered vessel to execute contracts while the
acquisition framework for such types of vessels by indigenous are
constrained by tax, import duties, tariffs, concessions, interest
rate on borrowed finance inflicted by national agencies, financial
institutions etc. What about Fair Trade and Competitiveness?
Maritime Financing
Shipping Sector requires long term funding. Credit financing is
shrinking. The CVFF cannot fund all projects. This is where the
active role of financial institutions has become utterly necessary.
But it will require developing confidence in the sector to attract
the lenders and investors. The financial system must be
strengthened to encourage long term financing.
The idea of Maritime Development Bank was mooted sometime ago?
Should it be revisited? What is the applicable interest rate, what
are banking framework for credit financing in the maritime sector.
What are the possible palliatives? We need urgent solutions.
Shipping, Oil And Gas, Ocean Policy
It is obvious from the work of the various government committees
and legislative inquiries so far, that the Oil & Gas industry
is in a complete mess; no accountability, no transparency,
governance failure, etc. Can one talk about Shipping, Oil and Gas
Transport, which thrives on maritime sector without recourse to
government interventions.
It is expected that Nigeria government will have to construct an
entirely new and institutional framework for oil and gas regulation
and transportation. The need for Ocean Policy and Regulations for
Nigeria cannot be overlooked particularly with the current trend
internationally among coastal states and all the increasing focus
and attention on the oceans.
Our deep-sea exploration activities (for oil and natural gas)
and generally transport and fishing are a pointer in that
direction. The enactment of the requisite Ocean Policy Law in
Nigeria has become necessary to harness the potentials.
Cabotage Vessel Financing Fund (CVFF)
These ancillary rules to the NIMASA Act brought so much hope
when it was introduced. The implementation is not working. Several
Models have been contemplated yet the goal is farfetched. Why is
this so? What are the constraints? Why are the companies not
accessing the funds? The rules have been reviewed a couple of times
still no feasible implementation.
Why is there contribution of 2 % to the fund without value? Are
there constraints with the Banks which now serve as the WAREHOUSE
For the funds? The Stakeholders need to discuss this. Corruption is
an issue but something has to be done. There must be the political
will to ensure strict adherence. What possible innovations can be
introduced? The funding is required to help the industry to grow
and workable ideas are required to boost local content and cabotage
administration.
Investment Issues
Shipping requires long term funding hence government
intervention is required to boost investors understanding of the
market, the potentials, concessions, incentives etc. The stock
exchange has an advocacy role here prospective indigenous
investors.
The capital flight occasioned by pull of capital by foreign
investors from local maritime businesses interest dealt a serious
blow to growth seen by emerging local brands such as Japaul etc.
Foreign and local Investments are also dwindling. The IOCs are
divesting. The delayed passage of the Petroleum Industry Bill,
affects investment decisions of the international oil
companies.
TO BE CONTINUED
Dr. Olisa Agbakoba (SAN) is a seasoned maritime law practitioner
and former president of the Nigerian Bar Association (NBA).
Reforms Without Actions!
Volumes of reports from several committee works are hardly
implemented and often times are incoherent and haphazard.
The most recent is the Presidential Committee on Maritime Sector
reforms inaugurated by the President in 2012. The recurring lack of
commitment and discipline of execution in government reform
initiatives has affected development efforts. The recommendation of
the cabotage subcommittee has laudable themes. It touched on
critical areas of shipping, shortage of qualified and competent
manpower to run vessels, significant discrimination on the
employment of Nigeria indigenous vessels, paucity of shipyard
operators, non-accessibility to funds etc.
On Human Capital, the committee observed that most graduates of
Maritime Training Institutions in Nigeria are half baked and lack
sea time experience, the Academy is faced with the challenges of
inadequate professional teaching staff, Poor remuneration of Staff.
There is even lack of training vessels. These are pertinent issues
which need to have been resolved through policy formulation and
strict implementation or directives.
Had proactive actions on some of the key recommendations been
taken, the maritime sector would have become adjusted to providing
the required economic support in the wake of the current challenges
in the Oil and Gas Sector.
Value Proposition Of Maritime Action Plan
It is realistic for the maritime industry to contribute
significantly to nation’s GDP. USA, Germany, Canada, Netherlands,
other coastal countries maximize their maritime potentials. Reforms
and policy formulation are usually associated with the basic
objective of making positive impacts and this is the way to go.
These expected impacts will only be realizable if the entire
actors; operators, legal, regulatory, institutional have the basic
appreciation and respond strategically to the emerging situations.
This is desirable and very much needed in Nigeria and those who are
adequately equipped will maximize the opportunities that the
changes will offer. This is the goal of Maritime Action Plan. The
MARITIME ACTION PLAN (MAP) will entail drawing up an implementation
plan around 2 core areas or more; (i) Executive and Administrative
– such as strategies for inter-agency cooperation and institutional
framework reforms, (ii) Legal and Legislative Activities – such as
drafting legislation and engagement of legislature.
An expedited action is required on the Legal and Legislative
Activities, particularly the review of Critical Bills for
transformation of the maritime sector. This will include but not
limited to Review of Maritime Operations Coordination Act of 1992
to stop crude theft, Review of Ports and Harbour Bill to attract
investors, Review/Drafting Cabotage Amendment Bill to enforce local
content, review and passage of the Petroleum Industry Bill as well
as the necessary advocacy to highlight the Petroleum Industry
Bill.
These and other matters form the basis of MAP initiative which
will be launched during our upcoming Policy Dialogue on Maritime
Sector scheduled to hold in Lagos.
Nigeria requires a practical and holistic plan to
address myriad of challenges facing her maritime industry and to
harness the potentials for the benefit of the nation. The sector is
vast and highly untapped despite years of persistence and several
proposals to revamp it.
It is an employment-driven industry and can overrun oil and gas
contributions to domestic product of this country. These
opportunities are wasting. The challenges are enormous and
multifaceted. They relate to Access to Credit, Financing, Obsolete
or ineffective Laws, Poor Infrastructure, Human capacity, Lack of
political will to engineer fundamental reforms.
Cabotage And Local Content
In the last 10 years, there has been new laws introduced to
develop capacity and maximize the potentials of the Maritime
sector; Cabotage Act 2003, NIMASA Amendment Act 2007, Nigerian
Content Development and Monitoring Board etc.
The general opinion of industry stakeholders is that the laws
are just good on paper because the infrastructure to make the laws
work is not there. There is also lack of finance to make the
infrastructure available.
So, what needs to be done to address this issue in the industry
where majority of Nigerians are still not participating.
The Cabotage and local content regime are landmark legal
developments and have been recognized as a fundamental tool in
restricting coastal trading to the citizens of Nigeria. Without
disregarding the concerted efforts of the regulators such as
NIMASA, the current capacity is below average.
How can we translate the objectives of the law to implementable
framework, How can we improve the operational environment for local
operators to enhance their participation and businesses? What about
the fiscal regimes that affect indigenous operators within the
current implementation framework. Many operators still rely on
foreign partners to execute simplest of tasks.
The leakages in the rules which favour foreign enterprise should
be critically assessed and blocked. Why is it easy to use foreign
owned or registered vessel to execute contracts while the
acquisition framework for such types of vessels by indigenous are
constrained by tax, import duties, tariffs, concessions, interest
rate on borrowed finance inflicted by national agencies, financial
institutions etc. What about Fair Trade and Competitiveness?
Maritime Financing
Shipping Sector requires long term funding. Credit financing is
shrinking. The CVFF cannot fund all projects. This is where the
active role of financial institutions has become utterly necessary.
But it will require developing confidence in the sector to attract
the lenders and investors. The financial system must be
strengthened to encourage long term financing.
The idea of Maritime Development Bank was mooted sometime ago?
Should it be revisited? What is the applicable interest rate, what
are banking framework for credit financing in the maritime sector.
What are the possible palliatives? We need urgent solutions.
Shipping, Oil And Gas, Ocean Policy
It is obvious from the work of the various government committees
and legislative inquiries so far, that the Oil & Gas industry
is in a complete mess; no accountability, no transparency,
governance failure, etc. Can one talk about Shipping, Oil and Gas
Transport, which thrives on maritime sector without recourse to
government interventions.
It is expected that Nigeria government will have to construct an
entirely new and institutional framework for oil and gas regulation
and transportation. The need for Ocean Policy and Regulations for
Nigeria cannot be overlooked particularly with the current trend
internationally among coastal states and all the increasing focus
and attention on the oceans.
Our deep-sea exploration activities (for oil and natural gas)
and generally transport and fishing are a pointer in that
direction. The enactment of the requisite Ocean Policy Law in
Nigeria has become necessary to harness the potentials.
Cabotage Vessel Financing Fund (CVFF)
These ancillary rules to the NIMASA Act brought so much hope
when it was introduced. The implementation is not working. Several
Models have been contemplated yet the goal is farfetched. Why is
this so? What are the constraints? Why are the companies not
accessing the funds? The rules have been reviewed a couple of times
still no feasible implementation.
Why is there contribution of 2 % to the fund without value? Are
there constraints with the Banks which now serve as the WAREHOUSE
For the funds? The Stakeholders need to discuss this. Corruption is
an issue but something has to be done. There must be the political
will to ensure strict adherence. What possible innovations can be
introduced? The funding is required to help the industry to grow
and workable ideas are required to boost local content and cabotage
administration.
Investment Issues
Shipping requires long term funding hence government
intervention is required to boost investors understanding of the
market, the potentials, concessions, incentives etc. The stock
exchange has an advocacy role here prospective indigenous
investors.
The capital flight occasioned by pull of capital by foreign
investors from local maritime businesses interest dealt a serious
blow to growth seen by emerging local brands such as Japaul etc.
Foreign and local Investments are also dwindling. The IOCs are
divesting. The delayed passage of the Petroleum Industry Bill,
affects investment decisions of the international oil
companies.
TO BE CONTINUED
Dr. Olisa Agbakoba (SAN) is a seasoned maritime law practitioner
and former president of the Nigerian Bar Association (NBA).
Reforms Without Actions!
Volumes of reports from several committee works are hardly
implemented and often times are incoherent and haphazard.
The most recent is the Presidential Committee on Maritime Sector
reforms inaugurated by the President in 2012. The recurring lack of
commitment and discipline of execution in government reform
initiatives has affected development efforts. The recommendation of
the cabotage subcommittee has laudable themes. It touched on
critical areas of shipping, shortage of qualified and competent
manpower to run vessels, significant discrimination on the
employment of Nigeria indigenous vessels, paucity of shipyard
operators, non-accessibility to funds etc.
On Human Capital, the committee observed that most graduates of
Maritime Training Institutions in Nigeria are half baked and lack
sea time experience, the Academy is faced with the challenges of
inadequate professional teaching staff, Poor remuneration of Staff.
There is even lack of training vessels. These are pertinent issues
which need to have been resolved through policy formulation and
strict implementation or directives.
Had proactive actions on some of the key recommendations been
taken, the maritime sector would have become adjusted to providing
the required economic support in the wake of the current challenges
in the Oil and Gas Sector.
Value Proposition Of Maritime Action Plan
It is realistic for the maritime industry to contribute
significantly to nation’s GDP. USA, Germany, Canada, Netherlands,
other coastal countries maximize their maritime potentials. Reforms
and policy formulation are usually associated with the basic
objective of making positive impacts and this is the way to go.
These expected impacts will only be realizable if the entire
actors; operators, legal, regulatory, institutional have the basic
appreciation and respond strategically to the emerging situations.
This is desirable and very much needed in Nigeria and those who are
adequately equipped will maximize the opportunities that the
changes will offer. This is the goal of Maritime Action Plan. The
MARITIME ACTION PLAN (MAP) will entail drawing up an implementation
plan around 2 core areas or more; (i) Executive and Administrative
– such as strategies for inter-agency cooperation and institutional
framework reforms, (ii) Legal and Legislative Activities – such as
drafting legislation and engagement of legislature.
An expedited action is required on the Legal and Legislative
Activities, particularly the review of Critical Bills for
transformation of the maritime sector. This will include but not
limited to Review of Maritime Operations Coordination Act of 1992
to stop crude theft, Review of Ports and Harbour Bill to attract
investors, Review/Drafting Cabotage Amendment Bill to enforce local
content, review and passage of the Petroleum Industry Bill as well
as the necessary advocacy to highlight the Petroleum Industry
Bill.
These and other matters form the basis of MAP initiative which
will be launched during our upcoming Policy Dialogue on Maritime
Sector scheduled to hold in Lagos.