Nigerian ship owners have lost over $25.3 billion paid to foreign ship owners by importers and exporters as freight charges on goods imported and exported out of the country.
This massive loss can be blamed on the failure of Nigerian ship owners to acquire standard oceangoing vessels in order to have the needed capacity to compete with their foreign counterparts.
According to statistics from the Nigerian Maritime Administration and Safety Agency (NIMASA), Nigerian shippers paid a total sum of $9,087,585,117.5 as freight for dry and wet cargo to foreign ship owners in 2015.
In 2016, Nigerians also paid a total of $7,551,304,167.12 to foreign owned ships while a total of $8,601,881,176.08 fright charges were lost to foreign vessels in 2017.
On the number of vessel call, the NIMASA data shows that in 2016, a total of 2,047 vessels brought in dry cargo import; 987 vessels lifted dry cargo export while a total of 2,468 vessels lifted wet cargo import and export cargoes.
In 2017, a total of 1,967 vessels of dry cargo import were received at the port; 1,145 vessels of dry cargo export while a total of 2,294 vessels of wet cargo import and export were handled in Nigerian ports.
Speaking on the implications of the data, Hassan Bello, executive secretary/CEO of the Nigerian Shippers’ Council (NSC), who presented a paper titled ‘Indigenous Fleet Development: What Options?,’ at the 20th anniversary lecture/awards & patrons’ investiture ceremony of the League of Maritime Editors, said that the above scenario has led to a situation where for instance, a total sum of $9,087,585,117.5 was paid as freight for dry and wet cargo to foreign ship owners by Nigeria in 2015 alone due to absence of Nigerian owned fleet plying international trade.
According to him, Nigeria has not been able to reap immense potential and economic benefits of being a littoral state, due to the fact that all Nigerian exports are shipped “Free on Board” (FOB), while its imports are shipped ‘Cost Insurance Freight’ (CIF).
Bello said that the above statistics buttresses the point that there has been the recurring trend of economic losses in Nigeria over the years till date.
“The maritime sector is bedeviled by several constraints, mainly due to the financial crisis facing ships owners and maritime operators. In spite of the fact that the industry in Nigeria is endowed with enormous prospects that are waiting to be maximised, the difficulty in accessing funds by indigenous ship owners has posed a huge threat to the sector,” Bello said.
Bello, who pointed to the fact that oil rigs in Nigerian waters and the vessels which service them are owned and controlled by foreigners, said that even the vessels involved in coastal trade and inland waterways covered by the Coastal and Inland Shipping (Cabotage) Act are mostly controlled by foreign ship owners.
Stating that Customs duties for vessel importation are considered by the shipping business community as prohibitive, Bello said that Nigeria ship owners pay to the tune of 14 percent of the total cost of a vessel to the Federal Government as import duty on vessels and their spare parts.
“As a result of this, even Nigerians vessel owners prefer foreign registry that enables them to bring in their vessels under temporary importation permit (TIP), which only demands 1 percent of the total cost and is renewable every year,” Bello disclosed.
He listed other financial challenges facing the nation’s shipping sector to include absence of adequate tax relief period; lack of investment capital; absence of long-term concessional funding; withholding tax on interest, dividends, dollar accounting etc; uncertainties; lack of guarantees and assurances on investment, which had in the past resulted in the high debt profile of maritime industry in the financial sector of the economy.
Continuing, Bello pointed at absence of exemption from Customs duties and absence of benchmarking with other progressive maritime states as challenges facing the nation’s maritime sector.
Uzoamaka Anagor-Ewuzie
