The Cabotage Act has always been a subject of interest to many stakeholders in the Nigerian maritime sector, as it seeks to ensure indigenous participation in all forms of maritime trade. The Act, which rests on four major pillars, seeks to ensure that vessels are built in Nigeria, registered in Nigeria, owned by Nigerians, and manned/crewed by Nigerians.
A critical look at the guidelines shows that it also seeks to facilitate the establishment and development of national capacities to implement, manage, monitor, establish adequate information systems, develop expert human resources in Cabotage administration and enforcement, and generally promote the efficient operation of the Cabotage regime.
Before now, foreigners had dominated the Nigerian Cabotage space due to inadequate facilities and shortage of manpower to help actualise the provisions of the Act. This gave rise to waiver clauses to ensure the maritime business does not suffer setbacks.
These clauses involve manning requirements, ownership requirements, and building requirements. Only the Minister of Transportation can grant such waivers when it has been proven that no Nigerian has the capacity to do the jobs.
Today, the story is different, as many Nigerians have taken their rightful place in the maritime space, hence the new move by the Nigerian Maritime Administration and Safety Agency (NIMASA), in conjunction with maritime stakeholders, to commence the cessation of waiver under a five-year strategic plan. Many have welcomed the move as apt and necessary.
In order to achieve this laudable initiative, in 2017, NIMASA, being the Federal Government’s parastatal in charge of the implementation and enforcement of the Act, issued a Marine Notice on the New Cabotage Compliance Strategy (NCCS), titled, “Temporary Suspension of Issuance of Waiver on Manning Requirement under the Coastal and Inland Shipping (Cabotage) Act 2003.”
It states that the Agency shall no longer consider applications for waiver on manning for prescribed categories of officers in vessels engaged in coastal trade. They include Second Officer, Second Engineer, Second Mate, able seamen, ratings, and stewards.
There are few exceptions in the cases of ship captain, chief engineer, chief officer or first mate, as the Act says they shall be considered on merit on application to the Minister of Transportation or Director-General of NIMASA. But there is a rider that such waiver application “must be accompanied by a training programme/transition plan to handover that role to a Nigerian within 6-12 months.”
This move by NIMASA has been widely hailed as a step in the right direction to make the Cabotage regime actualise its essence. Today, there are many more Nigerians participating actively in Cabotage trade, which is in line with the efforts NIMASA to ensure more local participation in the sector.
Further to the determination of the Agency to ensure the era of Cabotage waiver had ended in Nigeria, NIMASA recently organised a meeting with key industry players and stakeholders to discuss and map out a five-year strategic plan on the cessation of the waiver clause. This was in a bid to fully set in motion the actual plan of the Act solely designed to suit indigenous operators and also encourage more participation by Nigerians.
At the meeting, the NIMASA Director-General, Dakuku Peterside, reiterated the Agency’s determination to stop the cabotage waiver regime in the next five years.
NIMASA’s mandate is promoting and regulating shipping in Nigeria. The Agency is committed to promoting, protecting and providing the enabling environment for local ship-owners to grow and compete with their international counterparts. Obviously, these can only be achieved with concerted efforts by the Agency and the indigenous operators.
Part of the strategy for bringing to an end the issuance of waivers is the development of infrastructural capacity and human capital with respect to training of seafarers to attain global standards, among other initiatives.
The Cabotage law is patterned after the Jones Act of 1938 in the United States of America, which has helped develop that country’s indigenous capacity in shipping. This can also be replicated in Nigeria if NIMASA gets all the necessary support from the stakeholders.
Another important component of the Cabotage Act is the Cabotage Vessel Financing Fund (CVFF), which is derived from the two percent deductions from all contracts awarded under the Cabotage regime. It is designed to enable indigenous shipping companies acquire adequate tonnage to be able to participate in coastal and inland trade to avoid dominance by foreigners.
Over the years, NIMASA has accumulated huge sums of money through the CVFF, which cannot be accessed unless there is approval from the Honourable Minister of Transportation. NIMASA is working hard to ensure that the fund does not get into wrong hands, hence the delay in the disbursement of the fund.
One of the critical strategies for actualising the cessation of the Cabotage waiver regime is training. This is an area NIMASA has really excelled, especially through the Nigerian Seafarers Development Programme (NSDP). The programme is aimed at ensuring that Nigeria does not get caught in the global challenge on dearth of seafarers. This scheme has seen over 2,000 Nigerian youths sent to various maritime institutions abroad to study maritime-related courses. The Agency has also partnered with some institutions abroad to ensure the beneficiaries gets the mandatory sea-time training that will qualify them to be seafarers.
Currently, out of over 2,000 beneficiaries of the scheme, 340 cadets have already completed their sea-time training. In addition to this, 150 Cadets are undergoing the sea-time in Egypt and another 89 others are in the United Kingdom. This signals that through the intervention of NIMASA and the cooperation of stakeholders in the sector, the Nigerian maritime sector will soon experience a boom, as the cadets on sea-time training return to take their rightful place in the maritime space.
With the Cabotage Act enforcement, the issue of foreign dominance of the country’s maritime space will soon be a thing of the past.
NIMASA is adopting different strategies to encourage indigenous participation in the maritime sector, as it acknowledges that the CVFF will not be enough to meet the requirements of the sector, even when it is disbursed. The Dakuku has assured stakeholders that the Agency is negotiating with the Central Bank of Nigeria (CBN) for possible ways of granting a single-digit interest rate to indigenous ship operators so that they can easily assess funds at cheaper rates. This would help to boost their capacity and give them the opportunity to compete favourably with their counterparts in the global maritime space.
The NCCS, which is already yielding results, if fully implemented and enforced by NIMASA, alongside the five-year cessation plan, will help to set a new tone of prosperity in the Nigerian maritime industry. There will be more businesses for qualified operators, more job opportunities, and more revenue for the Federal Government, with the maritime sector contributing substantially to the Gross Domestic Product (GDP).
Part III, section 9-11 of the Coastal and Inland Shipping (Cabotage) Act, 2003 provides for waiver on the requirements for ownership and manning of Cabotage vessels by Nigerians and also building of such vessels in Nigeria, where capacity is lacking. In order to encourage more indigenous participation, which is the essence of the Act, NIMASA is desirous of stopping these waivers and has put in place a strategic plan in that regard.
Kumuyi Oluwafemi
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