The shipping industry has always been global and trade remains the foundation of sea power. African nations just signed the AfCFTA and you may wonder how they intend to transport their cargoes through the sea. Africa, for many years, has sought to participate more in the supply of shipping services. This remains an unfulfilled dream as the continent’s share of the ownership of global fleet is dismal -no African country was among the top 35 ship-owning nations in 2017, according to a 2019 report by UNCTAD on “Maritime Trade in Africa”.
The same report had other interesting revelations: Africa-owned shipping accounts for only about 1.2 percent of world’s and about 0.9 percent of gross tonnage; 2.7 percent of global seaborne trade; and 7 percent of maritime exports and only 5 percent of imports by volume within the period under review.
Although one-third of African countries are landlocked, shipping remains the main gateway to global market. The African Continental Free Trade Agreement (AfCFTA)- a trade agreement among AU member states, with the objective of creating a single market – is about to commence. The major challenge African countries will face is how to transport cargoes and provide maritime security, from one country to the other, within the continent.
Shipping is the weakest component of Africa’s sea power status, no thanks to the budget cuts that have hit most navies over the past few years. Implementation of AfCFTA, therefore, presents an opportunity for African countries to participate effectively in the huge global sea trade and commerce and improve maritime security by curbing sea robbery and piracy, a phenomenon which continues to make trade and investment in Africa riskier and expensive.
There are serious concerns about Nigeria’s maritime industry. How prepared is Nigeria’s maritime sector for AfCFTA? Nigeria’s shipbuilding industry is still in its infancy. This is also true for many African countries. Shipbuilding and repair yards which are vital components of the maritime sector have largely suffered neglect since Nigeria’s independence. While assessing the state of our shipbuilding facilities in 2012, a research paper revealed that Nigeria had about nineteen ship-repair yards, but 85 percent of these facilities were underutilized and neglected. By 2016, there were about ten ship-repair yards in the country, with only six of them operational.
Nigeria’s 2016 economic recession affected businesses in the shipbuilding and ship-repair industry. The available maximum capacity for ship repairs in Nigeria is 25,000 tons. This can be found at the graven dock of Niger Dock Plc, located in Snake Island, Lagos. This is closely followed by the graven dock of the Naval Dockyard Limited, Lagos which has a capacity of 10,000 tons. The remaining operational shipyards in the country are in Rivers State, with a combined capacity below 8,000 tons.
So, with low capacity of docking facilities in Nigeria, ships go to neighboring countries to dock their vessels. Most indigenous ship owners often set sail for Ghana and Cameroon when they need to dry-dock their vessels, and this, experts say, costs Nigeria up to US$100 million annually.
To cater for shortfall in docking capacity in the country, Nigerian Maritime Administration and Safety Agency (NIMASA) has therefore procured a floating dock. Perhaps with an increase in tonnage and docking facilities, the Nigerian shipbuilding industry will find relevance in the marine environment despite the number of vessels operating within the nation’s territorial waters. We should not think that shipbuilding does not contribute to the nation’s Gross Domestic Product (GDP).
Shipbuilding and ship repair contribute about 5.6 per cent to Nigeria’s GDP, according to industry experts. The few number of shipyards with their low capacity and poor state of facilities cannot repair over a thousand vessels operating within Nigerian waters. This is responsible for the poor performance of the shipbuilding industry within the economy.
Besides, most of the shipyards lack skilled workers to handle most aspects of maintenance required by ship owners. This calls for greater commitments by all stakeholders to reposition the shipbuilding industry for it contribute significantly to the national economy through job creation and revenue generation.
Although shipbuilding has remained an attractive industry in Nigeria, supporting industries such as steel mills, railroads and engine manufacturing are lacking. All these inadequacies affect the shipbuilding industry in Nigeria. Experts also argue that these inadequacies are further aggravated by the lack of an appropriate shipbuilding master plan, coupled with the absence of a relevant industry standard.
The development of shipping is capital intensive and in Nigeria, it may not be built through regular budgetary allocations without disrupting other sectors of the economy. The federal government should workout modalities for a public-private partnership in order to strengthen shipping in the country. Nigeria needs a viable merchant fleet to sustain her economic activities. It is not only in the acquisition of ships that shipping is enhanced.
Support facilities for shipping must be operationally effective and backed-up with sustainable policies. Some harbor entrances like Calabar, Port Harcourt and Warri must be dredged to maintain passage by deep-draught vessels. It is imperative that Apapa ports’ gridlock must be cleared to enhance economic growth.
For some time, experts in the maritime business have observed that, apart from petroleum resources, maritime affairs are not drawing deserving attention at the Federal Executive Council. It is observed that shipping and maritime affairs are too vast and complex to be handled as part of the Transport Ministry.
As a new federal cabinet is about to be formed, may I humbly suggest that a Ministry of Maritime Affairs should be established to oversee shipping, shipbuilding, inland waters, harbor and port development and maintenance, fishing and other related maritime activities -but excluding oil and gas exploration. This is vital for any maritime nation intending to evolve capacity to draw value from the blue economy.
This suggestion may be considered in the light of the large workforce in the nation’s maritime sector and the benefits of rapid development it portents. If the maritime sector is not repositioned for effectiveness in preparation of the commencement of AfCFTA, the trade agreement may likely not promote the much-desired economic growth in Nigeria. Thank you!
