I have decided to write something again on the Cabotage law that came into being more than two decades ago but has remained dwarfed and almost impotent.
This is to conclude that this benevolent cabotage policy has failed woefully to achieve its primary objectives in the last two decades.
Let’s remind our policy makers about the nightmares faced by industry players as a result of the inherent ” waiver clause” in the cabotage law that has created ambiguity around its implementation.
We can recall that the former president, Chief Olusegun Obasanjo,was the brain behind this well thought out law, which Nigerians, especially industry players, applauded as a welcome development then. Of course, Nigerians anticipated exponential growth of the industry due to the introduction of the law, drawing inspirations from what happened to maritime nations around the globe with similar laws.
The cabotage law was intended to serve as a catalyst to the growth of our maritime industry in Nigeria. It should be noted that this law is a form of economic protection and it’s virtually applicable across maritime nations around the globe like in Malaysia Singapore, Australia, Philippine, Greece, Japan, Nigeria and other maritime nations.
In Nigeria, the intendments of cabotage law were shipbuilding, manning, ownershi and registration solely by Nigerians. It was also meant to promote coastal trade within our country and prevent foreign competition against our domestic shipping activities, in addition to security of our territorial waters against external attacks.
Honestly, when the news broke out about this cabotage law two decades ago, everyone in the industry was excited, and Nigerians generally were particularly happy because of the great optimism of employment generation and massive business opportunities for industry players and auxiliary businesses including improving the GDP of Nigeria, would definitely be achieved.
Regrettably, more than two decades after the law came to existence, the much anticipated exponential growth by policy makers and industry players has continued to remain an illusion and endless nightmares. In my view, the ambiguity clause inherent in the law called ‘waiver clause” and deliberate decision by workers of iniquities to frustrate the best of public policy are the greatest albatross against the full implementation of the law in Nigeria
It’s therefore imperative for the appropriate agency of the government to ensure that this waiver clause and other impurity forces against the full implementation of the law are exterminated to allow the much touted exponential growth of the industry. We can’t continue to tolerate the excesses of workers of iniquities in public institutions who are hell-bent in sabotaging the best public policy because of their selfish interests. They keep issuing waivers to foreign Ships indiscriminately that have since taken over our coastal trade at the expense of indigenous shipping activities.
Nigeria is a giant maritime nation. It’s the 6th largest producers of hydrocarbon in the world, and also home to one of the largest refineries in the world (Refinery),with four public refineries (currently undergoing turn-around) and some modular refineries. Nigeria’s population currently stands at over 200m .It’s a known fact that for every 20 ships that are West Africa bound (WAF), not less than 17 are designated for Nigeria. Nigeria is a maritime hub in West Africa any day if we truly want to maximise its potential.
While Nigeria has been faced with all kinds of social problems, especially unemployment, it’s quite absurd that we deliberately ceded the multi-billion dollars Ship to Ship operations (STS) which has been going on Offshore Lagos for ages to Lome and Cotonou that are non-oil producing countries. What this simply means is that we have been promoting foreign economies at our own expense for years. Can’t we imagine the unquantifiable job losses and businesses running into billions of dollars that should have been the exclusive rights of Nigerians that we have ceded to foreign citizens while Nigerians are facing acute unemployment and lack of business opportunities?
All the agency jobs, chandelling, and other auxiliary business opportunities have been regrettably moved to Lome and Cotonou at the expense of Nigerians. What kind of wicked contradictions is this? Yet Nigerians are all over the place, looking for employment while some of the industry players have been frustrated out of marine business because of poor government policy. I can say without mincing word that Nigeria must have lost several billions of dollars in the last 20 years because of this ill-advised and disingenuous ceding of STS operations from Nigeria (offshore Lagos) to Lome and Cotonou that are non-oil producing countries.
This decision is certainly disingenuous and injurious to our national economy. Like I said earlier, for every 20 ships coming to WAF, 17 of them should be heading to Nigeria. You can guess the quantum of logistics and chandelling activities on 17 ships and what will be accruable to Nigerians in terms of naira and kobo all year round. Regrettably, these STS operations are done in Lome and Cotonou, while Nigeria, which is the receiving country of whatever cargo, is left out . This unproductive system has been on for over 20 years, and The Federal Ministry of Marine and Blue Economy with NIMASA that are supposed to address the problems frontally have continued to look elsewhere, claiming ignorance of what to do.
Have we taken time to evaluate how much Nigeria and Nigerians have been losing to foreign economies ( Lome and Cotonou) as a result of our decision to move the STS operations to these countries in the last 20 to 25 years? Why should a vessel, designated for Nigeria, be allowed to anchor offshore Lome while a daughter vessel has to be procured at prohibitive cost to bring the product to Nigeria when the mother vessel can easily sail to offshore Lagos like what we used to do in the past? Can’t we see the additional cost implications? Can’t we see the quantum of job losses and unquantifiable business opportunities that we have lost to non oil producing countries in the last 20 years? Yet our citizens are facing acute unemployment problems, and industry players are also faced with a lack of business opportunities. Can’t we see this as part of the international conspiracy against Nigeria because of the cabotage law? Why should Nigeria be subjected to a war risk zone with attendant high cost of insurance when there has never been any war in Nigeria in the last 5 decades? Why do we need to provide escorts in our coastal trade at prohibitive costs when Nigerian Navy and Marine police are statutory empowered to provide security in our waterways?
In all of this, what has been the role of NNPCL, the oil giant in charge of the management of oil in Nigeria? In my view, NNPCL has continued to offer lip service to the success of the cabotage law. The corporation is part of the problems of cabotage law because several efforts by indigenous Shipowners to convince NNPCL of patronage have proved abortive. NNPCL prefers dealing with foreign ships rather than indigenous ships because of corruption. This has continued to cause capital flight and promotion of foreign economies in a country where every business opportunity matters to us
A situation where public officials have suddenly turned themselves to ship brokers are clear case of conflicts of interest, and this is a breach of our constitution. The idea of clearing our inland waterways of wrecks is a welcome development. This will ultimately promote coastal trade like shipping activities, water transportation, auxiliary services, and enhance safety. But the idea of commercializing the process rather than outright award of the contract to prospective Nigerian may delay the project.
Finally, this celebrated cabotage law must be allowed to breathe so that the fundamental objective of the policy could be achieved. We should ensure that the waiver clause and other inhibiting forces against the full implementation of the law are expunged. This multi-million dollar STS operation that has been the exclusive rights of Nigeria as a maritime hub in WAF should be brought back to Nigeria (offshore Lagos) from Lome and Cotonou without further delay. We can’t be living in water and be thirsty. Our neighbours can’t be feeding fat from our sweat while we are faced with anguish and deprivation.
.Otunba Sola Olatunji, MD/ CEO Victory Energy Resources Ltd, is a member Nigerian Shipowners Association (NISA)
