• Monday, March 04, 2024
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Nigerian shippers shut down as foreign players control 90% of business


Nigerian ship owners have lost over 90 percent market share of the nation’s estimated N2 trillion shipping business to vessels owned and crewed by foreign players, leaving locals to handle less than 10 percent share of the business, BusinessDay has learnt.

Industry watchers say this results in huge revenue losses to the economy as well the erosion of hundreds jobs that would have fed the sprawling labour market.

Over 50 percent of Nigerian-owned shipping companies have been thrown out  of business such that most of the few remaining companies are trapped in repayment of bank loans worth over $3 billion (N480 billion), according to statistics from the Nigerian Ship owners Association (NISA).

A recent survey  by the Ships and Ports Communications Limited, shows that out of every 12 indigenous shipping companies, only two are in viable business, while the other 10, (representing 83 percent of the companies surveyed) are either completely dead or comatose.

Indigenous Nigerian shipping firms include Equitorial Energy, Oceanic Energy, Morlap Shipping, Peacegate, Pokat Nigeria Limited, Al-Dawood Shipping, Potram Nigeria Limited, Joseph Sammy, Genesis Worldwide Shipping and Multi-trade Group, all in Lagos.

Others include Niger-Delta Shipping in Warri, Delta State; and Starzs Investment Group in Port-Harcourt, Rivers State.

Ships and Ports survey also revealed that Genesis Worldwide Shipping, which used to operate over six ships four years ago, has completely gone under, with not a single ship to operate. Joseph Sammy Nigeria Limited was described by one of its staff as “almost dead”. The only vessel left in the company’s fleet, MT Kemepade, was stolen recently and taken to a ship breaking yard in Ghana before the owners found out, while companies like Equitorial Energy, Oceanic Energy, Morlap Shipping, Peacegate, Pokat Nigeria Limited, Al-Dawood Shipping, Potram Nigeria Limited are struggling to survive

Nigeria is an import-based economy and 100 percent of the 877,737 twenty-foot equivalent units (TEUs) of containers and 100 million metric tonnes of cargoes imported annually were handled by oceangoing container carriers owned by the world’s top players such as Maersk; Mediterranean Shipping Companies; CMA CGM Group; Evergreen Line; COSCO Container; and Hapag-Lloyd, among others, with Nigerian firms being almost completely left out.

Also, indigenous ship owners have over 200 oceangoing vessels and 700 offshore supply vessels, and about 90 percent of these vessels are lying idle, while the remaining 10 percent usually secure contracts on short-term basis. This makes it difficult for indigenous ship investors to recoup their investment.

“Nigeria is an oil producing country that does an average of 2.2 million barrels per day, amounting to over 60 million barrels per month, yet indigenous ship owners handle less than 20 percent of the oil lifting jobs”, Isaac Jolapamo, chairman of NISA said.

Jolapamo, who confirmed that not less than 50 percent of Nigerian shipping companies have been thrown out of business due to poor implementation of the Coastal and Inland Shipping Act (Cabotage Law) of 2003, also warned that the constant granting of ministerial waivers to foreign vessels to participate in domestic shipping, reserved solely for local firms is a major reason why their businesses are dying.

Further checks revealed that lack of quality vessels and shortage of skilled crew for Nigerian owned vessels, as stipulated by the Cabotage Act, are among reasons why indigenous shipping firms are not competing favourably with their foreign counterparts.

“Things are not well at all with indigenous shipping business in Nigeria. This sector of business is dying gradually. The Nigerian National Petroleum Corporation (NNPC) including the nation’s oil majors like Shell, Oando, Total and others, still engage the services of foreign vessels to lift crude oil in the country”, said Adewale Ishola, an indigenous ship operator.

Ishola, who is also the former president of the Association of Master Mariners, observed that Nigeria is the only member of the Organisation of Petroleum Exporting Countries (OPEC) that does not lift her own crude oil, and that the nation is losing lots of revenue in capital flight to due to this.

 He suggested that government could support local shipping business to grow by empowering companies to participate in lifting crude oil.

He urged the Federal Government to implement the recommendations of the maritime committee that was set-up in 2012 by President Goodluck Jonathan, adding that the government should go ahead to disburse the available N40 million Cabotage Vessel Financing Fund (CVFF) to the six listed companies.

“NIMASA needs to release funds for the 21 shipping companies that were shortlisted for repair and that will go a long way in reviving the industry, such that the fleet of seafarers, which the agency is currently training overseas would be gainfully employed”, he said.