• Thursday, April 18, 2024
businessday logo


We need container, tanker- vessels to have international trading capacity – Iheanacho

We need container, tanker- vessels to have international trading capacity – Iheanacho

Emmanuel Iheanacho is the chairman of Genesis Worldwide Shipping. In this interview, he spoke on the need to expand the scope of the Cabotage Vessels Financing Fund to enable indigenous players to participate in shipping. He also spoke on other industry issues. Amaka Anagor-Ewuzie brings the report. Excerpts.

What interests you the most about maritime industry development in Nigeria?

I am interested in the proposed $1 billion port upgrading project. We expect that if you are spending $1 billion, it might involve building one new port and spending money on old facilities. Our ports must be able to play host to new and evolving ship types- the size and depth of the vessel have to be taken into account.

What about concerns on the inland waterways transport?

We will talk about all our shipping connections – international trade connection, coastal shipping, regional shipping, and then maybe inland waterways. All these are components of economic artery that if properly harnessed would help our economy grow.

An investor in inland water transport called for a reactivation of the service from CMS Jetty in Lagos to Tema in Ghana. I never heard of that. It would be nice if we had a proper service between the two countries. The only service I knew about was the service that ferried people and goods from Apapa to Lagos Island and vice versa.

The Africa Continental Free Trade Area (AfCFTA) conversation stimulated the mention of the CMS-Tema inland waterways transport service. It would boost trade between the two countries but the problem that would stop that trade from developing would be the lack of effective transport connections to move the goods back and forth.

It is the easiest thing to do because the ships needed would be about 5,000 tons and if they are up to 10,000 tons, then there may be a need to expand the range of travel. We can have a service that goes from Lagos to Ghana and Ghana back or from Lagos to Ghana-Liberia-Freetown- Banjul, the capital of The Gambia. The service can pass to Cameroons through to Gabon on the return journey.

I remember that Bamanga Tukur’s company did propose to establish such a service. But somehow, it didn’t. It was supposed to be a small feeder service that travelled along the coast, feeding cargo and dropping them. That is the real Cabotage.

At such discussions, stakeholders thought some level of government support would make a difference. How do you see this?

There has to be government support because it is not an existing trade route; sacrifices have to be made in the beginning for the trade to become established and somebody has to bear that cost. If the government realises what would be achieved at the end of the exercise, then they would support it and back it up with advertising and publicity. So, people would know that you don’t always have to send goods to Europe because there could be people down in Africa who could need these things.

Who should be at the core of these engagements?

ECOWAS and the African Union are there. ECOWAS can do it within the region. But look at what is going on in ECOWAS now; there is a lot of mistrust between the members of ECOWAS because of recent political upheavals in some of the countries. So, some people might not be interested in working with their erstwhile neighbours. There has to be a central organisation or sovereign that really would stay there and say this is what we are looking for in the long term.

Lately, there hasn’t been any visible development in the shipping sector. Kindly share your thoughts on this.

That is true. One of the biggest problems is that people who run the industry are not necessarily familiar with the potential for shipping. We understand that political considerations will always bear on how people are appointed and where they go.

We need people who have strategic ideas about how to develop the industry, the sort of vessels that you have, the nature of the service that has to be given to come to the top echelon of leadership in the industry or close to the top, so that there is inter- fertilization.

If we have a situation where the industry is too heavy with people who are not maritime or transport professionals, then we will have these issues.

Every day we have conferences where we look at the issue of development that happens elsewhere – developments in terms of ship types, movement away from manned vessels to autonomous vessels, and how through automation you can harvest greater profits from the throughput of cargo that transit the ports.

We need to have people who understand the need for us to catch up in terms of developing a proper fleet. The last time that Nigeria tried to develop a proper fleet was in the late 1970s – when we sailed on ships that were bought.

If we had sustained that, we would have moved up from there to buying new ships and training Nigerians who would own those businesses because it is not just the ships, it is understanding the markets within which those ships operate to create value locally.

What would be top interest for discussion and action for you as a stakeholder in the shipping subsector?

Financing is there. It’s key because ships are highly capital-intensive. People want to have a reasonable guarantee that any money they lend to people to buy ships is not money that would be treated as ‘it’s my turn’ or my share.

We need ships because Nigeria is an international trading nation selling oil and deriving a lot of revenue from selling that oil and spending that money on buying semi-manufactures. Both as imports and exports, those goods are carried by ships, and the huge amount of money in our international trade is domiciled in freight payments.

What about the CVFF?

The Cabotage Vessel Financing Fund (CVFF) was accrued to help indigenous operators scale the hurdle of finding finance for buying ships.

If you asked me ‘Would I make any modifications to the CVFF?’ I would not constrain it to Cabotage vessels alone. I would make it a fund that people can borrow for developing shipping capacity – whether it is for international shipping or shipping in coastal trade. That is what I would do.

Certainly, there is a need to get people with financing skills, who would work out the modalities for lending this money, because in the final analysis, it is a dedicated fund, but it should not be one that must be wasted. It has to be loaned to people with articulate and workable plans so that they don’t borrow the money and tomorrow parked up without jobs. All of these have to come into the decision mix so that we spend the $700 million in a very sensible way.

We need to have international trading capacity and invest in container vessels, and tanker vessels. We need to have a committee that would look at the structure of Nigeria’s international trade, which would reflect the structure of the fleet to serve that trade.

So, how many tankers do we have calling in our ports, where do they sail from and how many of them do we want to replace? How many general cargo and container vessels do we have; so that we have representation in all of the different trade sectors?

Considering the core of shipping and the need for repairs and maintenance, how would you describe Nigeria’s position?

It is a multiplier benefit. Shipping doesn’t exist for shipping’s sake. Shipping generates multipliers in terms of the resources you need to run a ship. You need bunkers to run a ship, you need to repair the vessel and dry dock. All of these, place a call within the economy.

If you have ships that are operating; you will need shipyards to dry dock and from there, you would not be far from having shipyards where the ships can be built locally. If those ships are built locally, there is a steel demand.

You will need to produce a high volume of steel plates and sheets of all kinds for building those ships. So, when we have a steel industry that is not linked to shipbuilding, you wonder what they do with the output of that industry.

How are the ship maintenance yards doing in Nigeria?

The ship repairs and maintenance facilities that we had have gone under. We used to have the Continental shipyard which is affiliated with the Nigerian Ports Authority, and they did the dry dock of certain sizes of vessels; maybe to the size of about 10,000 tons. It was a floating dock that they were using. Then, there was Nigerdock; it was managed in such a way that it was sold away from the government. It is a strategic industry and maybe the idea should have been to have a government presence in it or to have had a mixture of Public-Private Partnerships.