Capacity building and professionalism: Ingredients to growth of Nigeria’s maritime industry

Shipping is the heart of global economy andthe maritime industry which is a sub-sector of the transport sector, accounts for nearly 90 percent of transport requirement of the world. In West Africa,seaborne trade accounts for over 60 percent of the total GDP of the countries in the region. Over the years, Nigeria’s maritime industry has not attractedconsiderably the required local and foreign investment inflow that is proportionate to its contribution both to the Nigerian and West African economy despite its great potential and enormous investment opportunities.Some experts in Nigeria adduced lack of knowledge about the maritime sector and technical capacity as the basis for the very poor response that it hasgenerated from investing public.Regardless, there are new indices and opportunities that portend the ability of Nigeria to develop the maritime industry through capacity building and professionalism.

Capacity building also referred to as capacity development is a conceptual approach to development that focuses on understanding the obstacles that inhibit people, governments, international organizations and non-governmental organizations from realizing their developmental goals. It equally enhances abilities that will allow organizations to achieve measurable and sustainable results. Capacity building often refers to strengthening of skills, competencies and abilities of people including provision of infrastructure within an industry so that they can have competitive advantage in a global landscape.  Capacity building can be attained at individual, institution and societal levels to:

a.‘’Build and enhance existing knowledge and skill.

b.Modernize institutional structures and supporting them to form sound policies including effective management.

c.Promote public administration that is responsive to the demands of the industry and accountable to stakeholders’’.

Professionalism is the knowledge that an individual carries about a certain field. It requires individuals to be sincere, maintain professional etiquette and ethics in an organization. According to Frank Tyger, professionalism is ‘’knowing how to do it, when to do it, and doing it’’. Professionalism is the axis around which any organization revolves. Without professionalism, anorganization will be lost in the galaxy of politics, mind games and blame games. Professionalism is strategic to the survival of individuals and organizations in the maritime industry. Professionalism and capacity building are factors depending on themselves and mutually reinforcing each other. The chances of sustaining growth in Nigeria’s maritime industry will increase if professionalism and capacity building are married together with the precision of a good orchestra.

NIGERIA’S MARITIME INDUSTRY

Nigeria with a coast line of 420nm, has an approximate sea acreage of 84,000 sq nm (287,4790sq km) almost equal to one-third the total land area over which it has sovereign rights to all living and non-living resources therein. ThusNigeria with a homogenous interconnection of rivers and estuaries into its heartland is suitably poised to desire innovative ways to boost the maritime industry. Albeit, challenges of good governance, decay in national infrastructure and inappropriate allocation of resources stand as a detour to this lofty aspiration. 

In broadest terms, Nigeria’s maritime industry includes all organizations involved in designing, constructing, manufacturing, acquiring, operating, supplying, repairing or maintaining ships and ship borne equipment. It also include those enterprises engaged in operating and managing shipping lines, stevedoring and brokerage services, shipyards, dry docks, marine repair shops, shipping and freight forwarding services amongst others. 

The maritime industry in Nigeria is a very critical sector of the economy, because Nigeria is a major oil and gas producer, with an estimated population of 160 million people. Shipping is at the core of activities within Nigeria’s maritime industry. It is also a major consuming nation with the implication of huge seaborne trade. Statistics indicate that average cargo traffic of 152 million metric tons worth over $5 billion that is, (about N800 billion Naira) in freight earnings are generated in the country annually. The Nigerian oil and gas sector which is the main stay of the economy requires huge shipping and logistics services for its operations. However, this sub-sector of the marine industry is also dominated by foreigners and the nation has been losing about $4 billion dollars to foreign ship owners yearly due to lack of indigenous capacity in local maritime transportation.

Indigenous shipping operators could not compete with their foreign counterparts because of poor level of manpower infrastructural development in the country. The huge revenue loses annually to foreign ship owners who deny the nation’s seafarers employment opportunities, coupled with their reluctance to invest in local maritime infrastructure development amongst other reasons were responsible for the Federal Government’s intervention in the maritime industry. The intervention was to enable accelerated economic development through increased local content in the nation’s maritime sector. The first intervention was the UNCTAD 40:40:20 introduced by Decree 10 of 1987, while the second was the Nigerian Cabotage Act (Coastal and Inland Shipping Act 2003).

The objectives of the Nigerian Cabotage Act includes: building indigenous capacity in maritime tonnage, shipbuilding and seafarer: acquire technical know-how in ship management, shipbuilding and ship manning. It is to conserve and generate foreign exchange for the nation, engender economic prosperity and create employment in the maritime industry. Business opportunities have increased with the Cabotage regime due to the effort of the Nigerian Maritime Administration and Shipping Agency (NIMASA) which is the regulatory body. However, the participation of indigenous ships in the carriage of crude oil and other forms of cargo is below par. Available records show that out of the 42,276 ships that entered the Nigerian Port between 1997 and 2006, only 3549 (8.39%) were Nigerian ships while 38,727 (91.61%) were foreign ships. Also, out of a total of 1,236,986,185 GRT, only 16,297,759 (1.0%) were shipped by indigenous ships while 1,220,690,426 (99%) were shipped by foreign vessels.

Although the Cabotage Act was promulgated to support indigenous participation,some experts in the marine industry believes amongst other reasons that inadequate technical capacity of Nigerians has enabledsignificant foreign presence in the inland and coastal trading activities. Others have argued that the state of affairs currently experienced in the nation’s maritime industry is due to lack of funds by indigenous operators to invest in developing more capacity in shipbuilding and repair facilities. Available datain 2012 shows that Nigeria has about 19 ship repair yards with 85% of these yards underutilized. The entry barrier is high for any organization that is to operate in the maritime industry because of the huge financial capital required for operations. This has posed serious challenges to indigenous ship owners as most individuals cannot provide the required capital to procure various vessels.  The shipbuilding capacity of the nation is weak coupled with poor institutional linkages within the maritime industry. The Cabotage Act needs a lot of indigenous capacity building to thrive in the face of these challenges. If the objective of the Cabotage Act is to be realized, the country must invest significantly in ship building, encourage capacity building and professionalism in the maritime industry. 

Manpower shortage in the nation’s maritime industry is exacerbated by inadequate training facilities and ocean-going vessels for sea time amongst other deficits. The de-establishment of the Nigerian National Shipping Line (NNSL), and the suspension of the Ship Acquisition and Ship Building Fund, have not boosted indigenous participation in domestic carriage of goods and passengers in Nigeria’s coastal and inland waters. The participation of foreigners in the nation’s maritime industry is inevitable because, the supply of technical capacity by their Nigerian counterparts cannot match the demands of the maritime industry in provision of maritime tonnage, manpower and infrastructure. The government needs to ensure that enabling environment is provided to enable Nigerians build capacity and encourage professionalism in order to sustain coastal and inland shipping. According to Akpobolokemi, ‘’the laws on ground notwithstanding, the maritime industry needs presidential backing to effectively implement cabotage. The full implementation of cabotage can generate employment and create wealth………’’

TRANSFORMATION OF THE MARITIME INDUSTRY

In order to transform the fortunes of the maritime industry, there is need for cooperation and synergy among the various government agencies and stakeholders. This will enable capacity building and thus, stimulate professionalism. Perhaps, it is time for Nigeria to have a maritime strategy to advance security and most importantly economic prosperity of the nation. This is because the demands of an uncertain world and the enduring interest of Nigerians require nothing less. 

The IMO as an organ of the UN is charged with the regulation and administration of international shipping globally. To this end, all member states including Nigeria as signatories to various conventions, protocols and codes have a responsibility to domesticate these maritime instruments. The ability to claim sovereignty rights has jurisdictional responsibilities under the provisions of UNCLOS III, which is a further domestication of IMO conventions. Inability to secure areas contiguous to Nigeria’s territorial waters has not created a friendly investor climate. It would be imperative for stakeholders in Nigeria’s maritime industry to ensure not only domestication of these conventions but also implementation of the provisions contained therein.

The demise of the Nigerian National shipping Line (NNSL) from Nigeria’s maritime landscape has some lessons to be taken onboard for future development. At the peak of its glory, the NNSL had a fleet of 27 cargo ships voyaging through the oceans of the world laden with mainly agricultural produce and raw materials. Specifically, the principal business case for NNSL ships was the existence of a thriving demand and supply trading chain. However, Nigeria has since shifted its main export and indeed imports to hydrocarbon extracts and derivatives. Expectedly, any stride to resuscitate a national shipping carrier in Nigeria could premise its business case upon a sustainable and thriving demand and supply chain in this direction. Crude oil, Liquified Natural Gas (LNG), Low Pour Fuel Oil (LPFO), High Pour Fuel Oil (HPFO) amongst others provide a huge shipping traffic between Nigeria and other major hubs. If a conservative 50-60% of this shipping could be strategically infused into a home grown shipping carrier, then we would be addressing not only infrastructure but also capacity building in Nigeria.

Nigeria has always counted its human capital as one of its strategic assets and as such evolved various funding mechanisms for professional training. However, a gap analysis of the dearth of professionalism in the maritime industry has been attributed to lack of an integrated training with prerequisite sea time in line with the Standards for Certification of Seafarers and Watch keeping (STWC 95). In the past, NNSL provided the needed sea time for all cadre of mariners and this was periodically infused to shore training. Maritime related courses have a huge training cost and must thus be supported by various organizations in Nigeria namely Petroleum Technology Development Fund (PTDF), and NIMASA Training Fund. These scholarship programs must create special funding mechanism for the maritime industry with internship periods. Internships could be tied into the Local Content initiative of the Federal Government and projected into feeding the professional shortfall in the marine industry.

The Maritime Organization of West and Central Africa (MOWCA) in 2006 set up the structures for a West African Maritime Bank to be located in Abuja. The Abuja MOU for Flag States in the Sub region was further charged with the mandate to facilitate the response towards a percentage ship tonnage contribution by member states. This initiative was aimed at providing the needed impetus to stimulate the growth of the maritime industry in the West African Sub region. This project has not taken off due to several reasons. However, a maritime bank with the prerequisite structures would serve a large number of indigenous companies. This is because maritime infrastructure and associated support structures often need huge capital outlays that have to be benchmarked against dynamic and diverse global trends. Consequently, it would be worthwhile to ensure that the foundational blocks for any reforms in the maritime financial sector be keyed into global best practices. Nigeria has the trade volumes and needs sustainable capacity in investment to ensure traction is kept in the growth of the maritime industry.

M.A. Johnson