The federal government’s move to re-establish a national shipping line has elicited divergent views, with some stakeholders describing it as a welcome initiative while others say the government should focus on encouraging private investments.
Adegboyega Oyetola, minister of marine and blue economy, had last month said the federal government was working towards the re-establishment of a national shipping line through a strategic public-private partnership (PPP) arrangement.
Adetokunbo Kayode, a former president of the Abuja Chamber of Commerce and Industry, told BusinessDay that Nigeria has a unique opportunity to establish a national shipping line that can catalyse economic growth and development.
“However, it is crucial to avoid the pitfalls of past ventures and embrace a commercially-driven approach that prioritises expertise and efficiency,” he said.
Kayode expressed support for the Federal Government’s intention to explore a PPP option for the national shipping line, describing it as the only model that can provide the necessary resources, expertise, and market discipline to ensure the success of the endeavour.
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“A PPP model can bring together the best of both worlds. The government can provide the necessary regulatory framework and support infrastructure, while the private sector can contribute its expertise in operations, management, and financial discipline but the rules of operation must be clearly stated,” he said.
Others who spoke to BusinessDay urged the government to prioritise commercial expertise in the establishment of the shipping line.
While stressing the importance of adopting a business-driven approach that would ensure its success and long-term viability, they cautioned against potential government interference and mismanagement and stressed the need for a clear delineation of roles and responsibilities between the public and private sectors.
Johnson Chukwu, managing director of Cowry Asset Management Limited, said the federal government has not proven historically to be able to run a business, adding that it should provide the needed support for business operators who will be interested in vessels.
He said: “We can have Nigerian vessel owners who are providing services for both little and bulk cargo. You don’t need to have a government to run it; it can comfortably be done by private-sector operators
“The Nigerian government has consistently not proven over time to have the capacity to run business effectively. We had the Nigerian shipping line which went underground; we had airlines; we have several transport companies, so I don’t think it’s really good trying to do the things that we have failed to do and hoping that we can do it better now.”
Samuel Nzekwe, a financial expert and former president of the Association of National Accountants of Nigeria, said Nigeria needs a national shipping line as long as it will generate revenue, create employment and make it easier to do business in that area.
He advised the government to create an enabling environment so that the private sector can thrive.
He said: “Nigeria needs a shipping line but the question is whether the country is mature for that? Would they handle it the way they have been handling others? That is the fear of everybody. When we are talking about diversification, the government should create an enabling environment so that the private sector can thrive.
“The government should take the initiative, because the private sector may be scared initially but when the required enabling environment is created, the government can then withdraw so that the private sector will now key into the project.”
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According to him, the benefits of establishing a national shipping line include creating job opportunities for the unemployed, reducing the dependency on foreign shipping, boosting domestic trade, ensuring reliable transportation of goods, potentially exerting greater control over the transportation of critical goods, promoting economic self-sufficiency, providing livelihood for families and growing the economy in multiple sectors.
Oyetola, minister of marine and blue economy, has said the project will fuel economic growth and unleash opportunities for local players in the marine sector through the collaborative synergy between the private sector’s efficiency and the public sector’s oversight.
According to him, the additional value for local players includes ship construction, maintenance, and repairs and this would enable local businesses to better leverage the Cabotage Act, which gives Nigerians the exclusive right to control locally generated seaborne trade.
“The ministry’s decision to consider the re-establishment of a National Shipping Line, through a strategic PPP arrangement, is borne out of our desire to capture a substantial share of the estimated $10 billion annual ship charter market within the country. The initiative will not seek to impede the growth of local players but rather to provide an avenue for them to create and extract more value from the sector, especially through ship construction, maintenance, and repairs,” he said.
