At a time the Federal Government is looking to raise it revenue outside oil and gas and deepen the diversification of the economy, notable maritime expert, Mr. Lucky Amiwero, has tasked the government to direct its attention to the maritime industry, saying it is an untapped goldmine. He told Sunday Telegraph that the shipping sector is one unexplored industry capable of generating more revenue if given the necessary attention in the next few years.
“If government gives the industry the kind of attention it is giving to the oil and gas sector and effectively enforce all extant laws of the industry, the economy will soon witness a boom,” he said.
The Director-General, Nigerian Indigenous Shipowners Association, Mr. Oliver Ogbuagu, said there is no reason why Nigeria cannot survive on shipping alone if advanced nations like Singapore and others with lesser coast territory care doing so. He said if the Cabotage Act is fully enforced and Nigerians allowed to take over the operation of the country’s coastal trade, “over N3.5 trillion will be realized. That is what this government is looking for to restart the economy.”
This is coming as the President of NISA, Capt. Olaniyi Labinjo, told Sunday Telegraph that if Nigerian shipowners are allowed to take over the lighterage of 1.88 million litres of petroleum products imported into the country daily, “it will take off the streets 500,000 Nigerian youths and also recover N5.4 billion monthly earnings.”
He added: “Government gave us the assurance to conduct lighterage operations. That was what informed our going out to secure ships for the lighterage through collaboration with Greeks, Turks and Americans. Our bankers are strongly in support and the ships shall be acquired by Nigerian shipowners after the bareboat charter period.”
Labinjo noted that the Nigerian Content Development Board had put the Marine Vessels Requirements by international oil companies for the period 2015 to 2020 at 900 vessels. “The NCDMB Executive Secretary, Mr. Ernest Nwapa, before he left office served notice to foreign owned, crewed and registered vessels that their contracts would not be renewed on expiration.
“The IOCs are obliged to engage Nigerian vessels in line with the provisions of the Cabotage Act and the NCD Act. We are therefore gearing towards providing the required offshore vessels.
When this is fully operationalised, another 700,000 direct jobs shall be created with an annual spend of $15 billion (about N3 trillion) saved from the capital flight,” he said. He lamented that the Nigerian maritime domain is “infested by foreign ships despite the prohibitions in the Cabotage Act. Worst still, the foreign vessels fail to obtain waivers as required under Section 9-11 of the Cabotage Act.
Those ships are fully manned by Indians Koreans, Philippines, Pakistanis etc onboard product tankers and offshore support vessels engaged in the Nigerian Cabotage trade.” Labinjo faulted a claim by the sacked director- general of NIMASA, Mr. Ziakede Akpobolokemi, that they issued only five waivers to foreign ships trading in Nigerian coastal waters.
He stated that an independent investigation carried out by the association showed that most of the vessels trading in Nigerian coastal waters, do so with receipts which is an evidence of payment of the waiver fees. He said what Nigerian shipowners need are contracts so they can get the ships for the jobs.
This revelation is coming at time the three agencies in the sector, Nigerian Customs Service, Nigeria Ports Authority and NIMASA, are being touted as important points for revenue generation for government.
While NPA and NIMASA have always kept their total annual revenues secret, the NCS’ inflow into the Federation Account in the last three years has hovered around N1 trillion. But a revelation at the National Conference last year that NPA failed to remit over N713 billion to the Federation Account since 2009, gave an insight to the capacity of the organisation in revenue generation.
This statement was made by the committee on public finance of the National Conference in a report submitted to the summit.
According to the report, the non-remittance of the authority’s revenue to the Federation Account is in contravention of Section 162 of the 1999 Constitution (as amended). But the AGM Public Affairs of NPA, Musa Iliya, had in a reaction, said that under the NPA Act, Cap N126 LFN, 2004, the organisation has the power to construct, equip, operate and provide seaport services to the general public.
He said essentially, the authority is supposed to serve as the commercial arm of government. It has to operate almost like any other business and make profit before remitting its operating surplus to the government, being the owner. This is net of all cost of undertaking operations (including development /maintenance of facilities /purchase of equipment) and administrative expenses.
In pursuance of the foregoing, NPA was given financial autonomy under section 13-14 of the Ports Act to apply its revenue to itsoperations, development of ports and purchase of equipment before remitting the surplus to government. Section 14 (1) of the Ports Act allows the authority to maintain a general reserve fund into which it sets aside appropriate amounts for replacement, contingencies and other purposes.
The monies are to be applied for purposes of the authority with the approval of the supervising minister as provided under section 14(2). By virtue of section 81 of the constitution, appropriations in respect of the authority are approved by the National Assembly. Section 15 allows NPA to apply its surplus revenues for its own purposes as it may determine. With the coming into effect of the 1999 Constitution, the surplus revenues of the authority were made subject to the Consolidated Revenue Fund established under section 81(1) of the constitution.
This supersedes section 15 of the Ports Act in order to bring it in line with the constitution. “It should be noted that what is remitted are the revenue surpluses after meeting all operational, maintenance, development and administrative cost as appropriated by the National Assembly under section 81 of the constitution in each year.
The authority therefore deals with the revenues only as appropriated,” he said. NIMASA also claims that it has legal authority to spend from what it generates so far as there is due appropriation by the National Assembly for the projects. It is expected to remit only the surplus to the Federation Account.
But Sunday Telegraph learnt that it is because the management of the agency has access to too much funds outside its appropriation that it allegedly engaged in the financing of hate campaigns against the presidential candidate of the All Progressives Congress in the April election, Muhammadu Buhari. Amiewero said he welcomes the idea that all revenue generated by government agencies must be paid into the Federation Account. He said that from there, they would draw their appropriations like nonrevenue generating agencies.
NCS is permitted by government to reserve seven per cent of the revenue it generates to finance its operations. But the question is: Why has the revenue generated by the agency not been improving in recent years? Amiewero said the failure of all efforts to reduce human contact and totally digitalise the operations of the agency is the root cause of the poor revenue generating capacity of the agency. He said if all leakages are blocked and the agencies’ revenue activities are computerised, corruption would reduce.
Also, he said, “revenue will rise to over N2 trillion next year and will continue to rise in years to come as the Nigerian economy is set to witness a boom after the current crisis.” Amiwero insisted that the country can run on its maritime sector alone if government can give it the right attention.
“If government realises the fact that the oil and gas industry is increasingly becoming maritime-based, and that over 90 per cent of all import and export goods is by sea, then President Buhari should put maritime first before agriculture in his order of priority.
“Ask countries like Singapore, Hong Kong how their access to the sea made them wealthy nations. Even an emerging market like Dubai is booming because it is the hub of maritime business in the Gulf region,” he said.
According to him, with Nigeria’s strategic position in the Gulf of Guinea, over 900 nautical miles of navigable coastal waters, huge cargo and intimidating population, the country is supposed to be an economic super-power.
Amiewero further challenged the Buhari administration to raise its ante in the regulation of the maritime industry, stamp out corruption and entrenched interests in the sector and adequately mobilise Nigerians to invest in the industry. He said if that is done, revenue from the sector will surpass what the country is currently earning from oil.
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