After years of loss of seafarers’ jobs and businesses by indigenous Nigerian owned vessels to foreign vessels, the Nigerian Maritime Administration and Safety Agency (NIMASA) has finally rolled out plans to enable it put an end to granting of waivers to foreign owned, manned, built and flagged vessels participating in Cabotage trade, which is solely reserved for Nigerians.
Coastal and Inland Shipping Act (Cabotage), which became an Act in 2003, was enacted to ensure that more Nigerian ship operators become involved in the nation’s shipping business that have been dominated by foreigners.
The Act, however, reserved coastal trade exclusively to vessels owned by Nigerians, manned by Nigerians, built in Nigeria and registered in Nigeria to fly Nigerian flag.
Unfortunately, the Act has not been able to achieve its purpose largely due to the inability of Nigerians to acquire standard vessels and trained qualified seafarers to take Cabotage jobs.
As result, Federal Ministry of Transportation started granting waivers to foreign owned to either use vessels built abroad because Nigeria is yet to develop her shipping building capacity or to use foreigners to crew Cabotage vessels. This for years has created more opportunity and job losses for indigenous Nigerian players.
To reduce waiver granting, NIMASA recently said that it wants to grow capacity in ship building by encouraging establishment of shipyards; creating affordable credit facilities to enable Nigerians acquire vessels; creating tax incentives for importing built vessels and building of qualified Nigerian seafarers.
Speaking at a 2-day Stakeholders’ Consultative Meeting for the Cessation of Cabotage Waivers organised by NIMASA in Lagos recently, Dakuku Peterside, director general of NIMASA, said the agency is engaging with the Federal Ministry of Finance and the Nigeria Customs Service (NCS) to create a special tax incentive for Nigerians bringing vessels into the country.
The plan, he noted, will also involve creating special incentives that can enable ship building yards to bring in components for building vessels in-country.
He added that the government is also determined to ensure that Ajaokuta Steel Mill and Aluminum Steel Company in Akwa Ibom State come on stream to provide the needed raw materials for ship building yards.
“The current tax regime makes it impossible for Nigerian ship owners to compete with their foreign counterparts. For instance, foreigners bring in vessels for a short period and they have special tax regime that enable them pay little to nothing for their vessels to work and live in Nigeria. Whereas, a Nigerian is charged a full range of all tax applicable (14 percent), making it near impossible for their Nigerian vessels to compete,” Peterside explained.
According to him, NIMASA is determined to ensure that in the next five years, certain categories of vessels (yet to be listed) are built in-country. This, he said, will put an end to issues around bringing in all kinds of vessels from outside the country and its attendant capital flight and job losses.
“NIMASA is engaging with the office of the Vice President on the possibility of creating incentives for shipyards. We believe it will encourage a lot of entrepreneurs to invest in ship building. We are also working in partnership with the Nigerian Content Development Monitoring Board (NCMB) and have commissioned an audit of all shipyards in order to identify a level support that will help revive shipyards in Nigeria,” he said.
Greg Ogbeifun, former president, Ship owners Association of Nigeria (SOAN), expressed concern that NIMASA might not be able to achieve it desire to put an end to granting of waiver for ship built abroad, because Nigeria’s ship building industry is nowhere.
He said it was unlikely for Nigeria to develop capacity to bracket waiver in the next five years especially in the area of using ships built in Nigeria for Cabotage trade.
Margret Orakwusi, a ship operator advised NIMASA to ensure that Ajaokuta Steel industry come on stream and also ensure that Nigerians are enabled to obtain loans at single digit interest rate.
Amaka Anagor-Ewuzie
