FG expects Nigeria’s maritime industry to grow by 10% in 2019

The Nigerian maritime industry has been predicted to grow by 10 percent in terms of volume in 2019, on the back of six major drivers, according to industry forecast by the Nigerian Maritime Administration and Safety Agency (NIMASA).

The growth will be driven largely by macroeconomic indicators from both the international and domestic economics, even as the shipping, coastal and maritime regulator rolls out plans to ward off challenges in the sector.

On the positive side, the report predicted increased opportunities for tanker vessels, container vessels, offshore support vessels and Cabotage operations especially on possible signing into law, the much awaited Anti-Piracy Bill and Petroleum Industry Governance Bill (PIGB).

Other drivers of this growth includes general global economic conditions, global trade conditions and developments in crude oil market, while availability of and access to foreign exchange, domestic economic growth and associated growth in trade as well as developments in the domestic maritime regulations will drive growth from the domestic market perspective.

In 2018, the Nigerian maritime industry was projected to grow by 2.5 – 5 percent with a projected increase in demand for maritime services during the period. However, Nigeria failed to achieve the 5 percent as predicted but according to NIMASA, maritime industry was closer to achieving the 5 percent target.

“From our forecast, we expect demand for maritime infrastructure to increase simply because we expect to see a 10 percent more tonnage coming through Nigeria’s port, meaning that everybody in the industry will have to up their games not just in terms of infrastructure but also in services to meet the demand that we expect,” Doyin Salami of Kainosedge Consulting Ltd, said while presenting the 2019 forecast in Lagos, Tuesday.

The Nigerian economy is still at its fragile state since exiting recession in the second quarter of 2017, with growth in Q3 2018 at 1.8 percent year-on-year, according to NBS data.

Presently, growth in Africa’s largest economy for full year 2018 has been projected at an average 2 percent. However, the country is faced with major threat arising from the build-up of the 2019 elections that has put several domestic and foreign investments on hold.

According to the report, growth in the maritime industry has not recovered to its pre-recession levels of competitiveness and activity, but expected to in tandem with growth in the economy.

“We expect growth in the sector to kick off based on assumptions from the Federal Government’s Economic Recovery and Growth Plan (ERGP),” Salami says.

Data from the forecast showed that the industry recorded a decline in both the number of registered tonnage and number of vessels from about 140 million tonnages and over 5000 vessels in 2014 to 120 million and 4000 respectively.

Also, total fleets including oil tankers and non-oil tankers are improving but are well below their 2014 figure. This trend is also the same for total cargo throughput at the Ports (excluding crude oil terminals) in 2018 at 30million is still at a far decline from the over 80million recorded before the global crash in oil prices in 2014.

Dakuku Peterside, director general of NIMASA, who said that the forecast dealt on two key issues including the review of the past trend in the maritime industry and the opportunities available for prospective investors as regards to acquisition of asset, expansion of asset base as well as growing human capacity.

Continuing, he said: “If elections end in favour of the ruling All Progressive Congress (APC), it will mean continuity on the existing policies but if it ends in favour of the opposition People’s Democratic Party (PDP), there will be a shift in policies. On the other hand, elections might end in deadlock, and this will pose serious challenge to the local economy including the maritime sector.

Emphasising that growth in the global economy is going to be very slow in 2019 and 2020, with slight affect on Nigeria’s economy, Peterside said that this development will affect the oil and gas industry, and Maritime by extension.

“Demand for finished product will continue to increase, meaning that there will be a lot of import into the country, and there will also be an increase in export of gas cargo especially at the completion of LNG train 7. There will also be an increase in the export of non-oil cargo,” Peterside predicted.

After 2014, the demand for shipping services nosedived but it started rising again in 2018. However, it has become a thing of necessity that if Nigeria fails to address issues around piracy and other criminalities on waters, the nation will find it difficult to achieve its maritime potential,” he added.

AMAKA ANAGOR-EWUZIE & MICHAEL ANI