”Nigeria’s is a maritime goldmine, which if properly harnessed has enormous potential. The very nature of the Nigerian economy, which is import-dependent, as well as oil, boosts her export cargo and is an indication that the maritime industry will continue to be critical to the growth of the nation’s economy. The industry is viable to the government’s quest to diversify the economy. It is capable of overtaking oil and gas contribution to the GDP of the country. To achieve that, a practical and holistic plan is required to address the issues challenging the industry…”
That is how Greg Ogbeifun concludes the third chapter of his seminal book on Nigeria’s maritime life, ‘Potentials of Nigeria’s Maritime Economy’. Noteworthy is the fact that Ogbeifun is a trained and seasoned practising maritime operator and so what he says carry with it weight of knowledge and experience. He is not some starry-eyed academic pontificating on some theoretical construct.
Ogbeifun’s book and the constructive axis on which he bases it are not new to many Nigerians. The maritime sector, like so many other sectors of the economy, suffer similar if not worse neglect, poor regulation and support mandate required to drive them to success.
In other words, potentiality abounds in all aspects of Nigerian life, but translating such latent potential to actual benefits is the bane of most things in Nigeria. That is to say, ‘potential merely remains potential’ that even governments that ought to implement policies to translate such potential to actual opportunities also lament abundance of potentiality that merely remains ‘potential’ ad infinitum.
While the government keeps lamenting its single source of income – oil and gas – a sector like maritime that ought to help in diversifying the economy is left untapped, such that foreign players dominate it, with local operators struggling at the margin. Of course, it is not surprising that the government neglected maritime; a government that could allow its national flag carrier, Nigerian National Shipping Line (NNSL) to go under, is capable of the sort of monumental neglect the sector is currently witnessing. The upside of diversifying the economy that a properly managed maritime life could achieve is job creation and robust GDP. But with the abysmal neglect of that sector, both its potential to create jobs and contribute to the country’s GDP are lost, just as foreign operators smile home with billions of dollars yearly that could have accrued to local operators and government coffers.
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Reading Ogbeifun’s book is akin to the story of the man who built his house on a goldmine. But while the man may not know his foundation is built upon such a huge treasure, the Nigerian government knows the goldmine inherent in maritime business, but chose not to mine it. The current woe of the country’s maritime sector is an avoidable economic tragedy that is allowed to happen from one government to another.
In chapter three, Ogbeifun outlines the vast coastal reach of Nigeria’s maritime and how it could have far-reaching implications for maritime and tourism businesses. Sadly, this is largely unharnessed. According to Ogbeifun, ”The maritime industry is Nigeria’s economic centre of gravity, with 80 percent of the national budget based on revenues from crude oil and gas exports, taxes and royalties. It is composed of shipping and ancillary services, offshore services, shipbuilding and repairs, and marine and ports services. Indeed, the Nigerian maritime industry offers vast investment opportunities. Sadly, we are yet to harness its potentials (sic), especially in areas such as: medium of transportation, resource exploitation, tourism and recreation, aquaculture, and commerce.”
Being a capital intensive business coupled with the difficulty of securing funding in Nigeria’s double digit lending rates, Ogbeifun argues that the government has a large role to play to assist local investors in the maritime business, so they can compete with foreign operators. He canvasses increased stakeholder engagement during government’s policy formulation, so government is properly advised what path to follow, backed up with appropriate legal framework that drives the business, developing the nation’s steel industry as key to shipbuilding and repairs and provide electric power as well as guarantee fiscal incentives like tax holidays, avoid multiple taxation and extortionist policies that hurt operators in the sector.
Ogbeifun, who has successfully operated Starz Shipyard, says there is a dearth of skilled manpower in the maritime sector because the available training institutions in the country are poorly equipped and that the few trainees lack ships to help them get required seatime to train and perfect their training. The situation, he states, has resulted in an influx of foreign seamen from Asia who man ships owned by the few local investors in the sector. With increasing sophistication in technology, he advises that training institutions need to step up their equipment for trainees to get the best.
Ogbeifun also states that while there are some shipyards or dockyards in the country operating, they are limited in scope and so ships go to neighbouring West African countries, Europe or Asia for repairs and shipbuilding. He estimates losses to Nigeria at US$500 million annually and laments that this is also another huge economic opportunity being lost to foreigners, because of the inability of Nigeria to tap into ship repairs. He blames some of the inadequacies on lack of funding that operators in the sector face, and urges government to make the Cabotage Vessel Financing Fund as established by the Cabotage Act of 2003 operational for local ship owners to draw funds from to expand their maritime business, since they have also contributed to the funds domiciled in the fund.
Perhaps, the best and practical way Ogbeifun drives home the huge revenue the country is losing to foreign ship owners is in the freighting of crude oil that the country exports. According to him, Nigeria produces 2.2 million barrels of crude oil daily. “Average freight rate is $US2.5 per barrel. At 2.2 million barrels, average freight per day is $US2.5 x 22 million barrels to give $US5.5 million. In a month, the average freight rate for shipping Nigeria’s crude will amount to $US5.5 million x 30 days = US$165 million per month = N56.1 billion @$1 = N340.”
If this huge but avoidable loss of revenue to foreigners is not a tragedy, perhaps the term needs to be redefined.
Ogbeifun has served Nigerians a meal that is hard to digest. If ever a book is timely, it is ‘Potentials of Nigerian Maritime Economy’. Happily, Ogbeifun has not only highlighted what the problems are, he has painstakingly outlined the best strategy to bridge the gaps both in the short and long term. As in all big businesses requiring huge investment, Ogbeifun lays the guilt charges at the doorstep of government, because while the Nigerian government leaves its citizens to fend for themselves, the foreign operators they are in competition with have the strong backing of their governments in the juicy incentives they enjoy back home to out-compete their Nigerian counterparts. It is Ogbeifun’s desire that this sad narrative for the maritime sector will change in no distant time. Indeed, the time for the government to act fast is now.
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