A maritime expert formerly with Lloyds, Engr. Emmanuel Ilori, is unhappy that more than 10 years after the enactment of Coastal and Inland Shipping (Cabotage) Act 2003, there is little to show for it in terms of technical development.
He said in a paper delivered at World Maritime Day 2013 in Calabar, Cross River State, that the Cabotage Act is the most important legislation that would have transformed Nigerian maritime technical development. It makes provision for indigenisation of ship building, ship repairs, ship ownership and human capacity development. “Whilst vast resources have been expended on its implementation, all above goals are yet to be realised,” he lamented.
In the paper titled, “Development of Sustainable Maritime Industry- Challenges and Opportunities,” Ilori said that the use of statutory instruments to protect the development of national maritime industry is not peculiar to Nigeria. In the UK it is called the Home Trade, where it addresses trade, technical and human capacity development. In the USA, the Jones Act was designed to protect the established maritime industry and prepare it for growth.
“These instruments are essentially maritime technical development regulations that require technical development expertise for their effective implementation. Nigeria has the benefit of two excellent instruments in the form of Local Content Act and the Caboage Act.”
The Local Content Act was derived from internal technical local content gaps identified within the Oil and Gas industry. According to Ilori, its present positive impact is largely due to its implementation by technical experts with thorough understanding of that industry.
The Act also has a major and very important provision that it has independent fund for maritime development in the form of the Cabotage Vessel Finance Fund (CVFF). “Therefore this Act has all it takes for the establishment of a sustainable maritime development given the key goals of its establishment.”
He said that the disbursement of the CVFF, which has been delayed since 2008 in controversial circumstances, should be such that it will enable ship building in Nigeria, allow for enhanced ship repair in the country, procure new ships that are cabotage specific, enable many companies to benefit and transform the Nigerian maritime industry.
“An initial $150 million can achieve all the above it depends on the funding and investment model adopted. The realisation of the goals stated above can contribute to job creation, poverty eradication and address the special needs of Africa. The Cabotage Act, if properly implemented, can help the national transformation agenda and meet the Maritime dimensions of the MDG and the SDG goals of Rio +20,” Ilori noted.
He said Nigeria occupies a near central geographical location on the African Atlantic coast. This provides the opportunity to be the central trade distributor for short sea trade as the maritime hub. He noted that the international maritime transportation has shifted to movement of goods via very large vessels that call in few but very large ports from where smaller feeder vessels distribute the goods to local trade regions. “Examples of such centres are Dubai, Europort, etc and the host countries have benefitted economically from such enterprise.”
While noting that the achievement of Cabotage goals provide hope for a sustainable maritime industry capable of reducing Nigeria’s dependence on Oil and Gas revenue, he, however, urged government to consider the threats to that development. This includes: security, integrated technical coordination, trade and operational control, and maritime control. He added that investment confidence is enhanced in a secured environment and the maritime industry is very sensitive to insecure environment.
He stated that the Nigerian maritime industry is not immune from the global maritime effects, but there is a peculiarity to the industry at the national level. According to him, before now, the foundation of a virile maritime industry modelled after solid and sustainable trending best practice and traditional maritime nations was laid.
This was replete with such elements as a national shipping line for general cargo, national tanker company for our oil, national shipyard with ship repairs and ship building potentials, attendant quality human capacity technical development program, port and dockyard facilities comparable with prevailing global best practice.
He further lamented that experience has shown only remnants of this visionary foundation remain today and less developing nations that copied Nigeria’s model are now the masters that Nigeria looks up to for expertise.
Ilori added that efforts by indigenous ship owners to sustain ship ownership and operation elements of the industry have failed. Most of their vessels are inoperable or have physically broken down and are now environmental disasters lying on their bottom on the beach aground due to discriminatory and uncompromising business practices.
“The domination of the maritime business environment by foreign operators with cheap access to funding and collaboration with their international masters crippled the indigenous operators. Financial institutions that funded these vessels lacked the technical savvy to ensure that the vessels will remain fit for purpose. Whilst sound technical management practices remain a mirage, the return on the investments became negative. It is estimated that in excess of $2 billion are tied up in un-performing local maritime assets,” he noted.
He maintained that new entrants into the industry are equally following the path of quick gain devoid of sound technical management, noting that there is evidence of sharp practices aided and abetted by foreign unscrupulous partners.
Information from Daily Independent was used in this report.