Cabotage Law: Which Way Forward
It is lamentable that in the almost seven years of the cabotage law in Nigeria, the nation and indigenous ship owners are still deprived of the needed revenue from haulage of petroleum products which ordinarily should help drive the country’s economy forward.
The cabotage Act was passed into law on April 30, 2003 with the release of guidelines for the implementation of the provisions on June 7, 2004. However, the inability of Federal Government to implement the Act gives foreigners the leeway to invade the country’s waterways to carry out all sorts of illegal shipping activities, which have in turn impoverished Nigerian ship owners.
Vessels owned by indigenous ship operators are considered substandard with poorly trained crew. This provides the ready-made excuse for the oil majors to ignore indigenous operators. In the past when the cargo allocation and reservation principle worked well, a lot of indigenous operators could charter vessels to carry petroleum cargo, but now, most of them simply serve as agents or representatives to foreign shipping companies in Nigeria.
The foreign shipping lines carry petroleum products while the indigenous shippers beg to be given the crumbs. Indigenous operators account for less than 10 percent of the total domestic crude cargo moved through the nation’s coastline of more than 2,000 km, dotted with eight ports.
The discrimination has placed the indigenous shippers at a massive disadvantage to every other flag in the world. Although the indigenous shippers are being over-taken by the better capitalized foreign shipping companies, the contention is that the cabotage laws reserve the haulage of crude oil within the nation’s territorial waterways to indigenous operators.
According to the Act, foreign vessels are not allowed to partake in any domestic coastal trade as obtainable in other developed countries of the world, while it will at the same time, promote the development of indigenous tonnage and establish a Cabotage Vessel Financing Fund (CVFF) and for related matters.
However the Temisan Omatseye led management, which assumed office in July 10,2009, after one year recorded a significant increase of the CVFF from less than seven million dollars in July 2009 to over 55 million dollars in June 2010, representing an increase of 685.7 per cent.
The Nigerian Maritime Administration and Safety Agency (Nimasa) management led by Omatseye as director general and chief executive officer, in one year recorded increase of 685.7 per cent increase in the CVFF.
The law stipulates that Nigerians should carry goods, passengers by vessel, or any other mode of transport, from one place to the other, either directly or via a place outside the country. It further stipulates that only vessels wholly owned, manned, built and registered by Nigerian citizens, shall be engaged in the domestic coastal carriage of cargo and passengers within the coastal territorial inland waters or any point within the waters of the exclusive economic zone of Nigeria; except a foreign vessel is given waiver by the Minister of Transport to carry out such job.
But seven years after the law was enacted, none of the provisions of the Law has been fully implemented by the supervising agency. Rather, waivers have been granted to foreign shipping companies to do jobs which Nigerians could do.
This has resulted in the influx of foreign vessels into the country, which needs to be stopped. In order to stop the influx of foreign vessels into the country, The Indigenous Ship Owners Association of Nigeria (ISAN) embarked on appeals and negotiation.
Since the prospect of achieving result through appeals and negotiations failed, the association resorted to using the power granted it under the Cabotage Laws to fight its cause. Consequently, the association and an indigenous company, Pokat Nigeria, not long ago sued a foreign tanker vessel MT Makhambe, from St Vincent and The Grenades, over illegal coastal trading within the Nigerian territorial waters.
The vessels with International Maritime Organisation (IMO) number 9334612, with 7224 registered gross tonnage was impounded while delivering 10,000 metric tons of petroleum products at Ibafon Jetty 1 in Apapa.
Meanwhile, the case was struck out by the Federal High Court sitting in Lagos in favour of the shipping company.
A lot of maritime experts however insisted that in order to rescue the indigenous shippers, there is the need for the Cabotage Enforcement Unit of Nimasa to wake up to their responsibilities because there is an influx of foreign vessels into the country and this should be stopped.
From available statistics, foreign vessels are scattered everywhere in the country doing illegal businesses because their activities are not effectively monitored and regulated. It is therefore advisable that thorough overhaul of the country’s flag administration should be carried out, and that the Cabotage Act should be revisited and simplified for proper interpretation by the court of law.
The Nimasa management is advised on the need to begin to also take critical look at shipping development to see how they could increase Nigerian fleet because without owning ships, the existence of the organization is meaningless.
Furthermore, the CVFF as provided by the law is the only support from the government that would give intending investors the needed leverage in the sector, otherwise Nigerians would continue to play the second fiddle as far as shipping business is concerned.
As a result of high cost of vessels, some banks find it difficult to sponsor shipping acquisition, a situation which is hampering the development of the expansion of fleets in the country.
According to ship owners, cabotage regime was already failing because interested Nigerians do not have the fund to acquire vessels.
For as long as foreign vessels are doing jobs meant for Nigerians ships, most Nigerians that have ships would certainly no longer be able to maintain them, implying that they would rather have to abandon them so that they would be sold as scraps instead of paying their crew members because they have become redundant, observed a maritime source.
He added that,it is lamentable that the Nigerian National Petroleum Corporation (NNPC) is paying huge amounts as demurrage to the foreign vessels everyday because most of the indigenous ships are not in good shape due to their inability to obtain loan or any support from the financial institutions and maritime regulatory body, regretting that the Very Large Crude Carriers which bring in petroleum products into the country do not allow Nigerian ships to come near their vessels.
The Very Large Crude Carriers according to information available to Nigeria CommunicationsWeek bring the refined products and also use their smaller vessels to distribute the petroleum products to the tanks and to the Nigerian National Petroleum Corporation facilities, which is supposed to be done by indigenous vessels operating under the Cabotage regime.
We regret that because Nigerians do not have good vessels, these foreign ships would stay for two to three months, while Nigeria pays as much as $30,000 to $40,000 daily until they finish discharging their contents.
This would have ended long ago if the Cabotage law was working. Most of the time, the regulatory agencies come up with so many excuses, such as; Nigerian vessels do not have Protection and Indemnity (P&I) insurance, observes another maritime inside source who stressed that it costs about $10 million to get such certificate, which most indigenous shipping companies in Nigeria could not afford.
However, Omatseye, has promised to do everything humanly possible to ensure vessel expansion in the country is given proper attention, by making the process of CVFF simpler to enable indigenous operators secure loans from the apex maritime body as well as increase local participation in coastal shipping.
According to him, the Agency would make Nigeria’s maritime industry the safest and most secure in Africa, further stressing that the management would equally make Cabotage a reality.
Even as operators and stakeholders continue to applaud the words of Omatseye, they however confess to being skeptical whether it will be another sweet talk as usual, like one of those often rehashed comments of newly appointed chief executives and political office holders as is the tradition in the country. They moreover call on the Federal Government to give the present chief executive officer of NIMASA the freedom to implement his good ideas, which should help move the maritime industry to another level.
Bismarck Rewane, managing director/chief executive officer, Financial Derivatives Company Limited has backed telecommunication companies’ move to increase tariffs.
Recall that telecom companies recently reiterated calls for an increase in prices of calls, data, and other services.
They argue that current prices are insufficient to maintain their business operations.
This request is contained in a communique signed by the Association of Licensed Telecom Operators of Nigeria (ALTON) and the Association of Telecommunication Companies of Nigeria (ATCON).
The telecom providers are advocating for cost-reflective tariffs, claiming that adverse economic headwinds are threatening their financial viability.
The operators stated that its general service pricing framework has not been reviewed upward in the last 11 years because of regulatory constraints.
“For a fully liberalised and deregulated sector, the current price control mechanism, which is not aligned with economic realities, threatens the industry’s sustainability and can erode investors’ confidence,” the telcos said.
The telcos called on the government to facilitate a constructive dialogue with its industry stakeholders to address pricing challenges and establish a framework that balances consumers’ affordability with their financial viability.
This push for higher prices coincides with MTN Nigeria reporting a loss due to foreign exchange losses in 2023 and Airtel experiencing declining profits amid an economic downturn in the country.
While the development has triggered a backlash in some quarters, Rewane said telco pricing needs to reflect current realities.
He was a guest on weekend’s edition of Channels Television’s Politics Today
Mrs. Jane Egerton-Idehen, managing director, Nigerian Satellite Communications Limited (NIGCOMSAT), has said that the time has come to unlock Nigeria’s true potential, by embracing digital transformation and fostering a culture of innovation as a way to further enhance other sectors like Financial and Insurance (Financial Institutions); Trade; Agriculture (Crop production); Manufacturing (Food, Beverage & Tobacco); Construction; and Real Estate, among others.
She said that over-reliance on the oil sector has created a vulnerable economy in Nigeria.
Egerton-Idehen said this in Nsukka on Saturday while delivering the 20th Herbert Macaulay Memorial Lecture themed, “Harnessing Practical Engineering Solutions for Sustainable Economic Development” held at the Princess Alexandra Auditorium Hall, University of Nigeria Nsukka (UNN).
Egerton-Idehen who spoke on the topic “Championing Innovation: Digital Transformation and Economic Diversification in Nigeria,” said that Nigeria has heavily relied on oil production for many years which has not augured well for the country’s economy.
She said that digital transformation is the process of using digital technologies like Robotics, Mobile Internet, Artificial Internet, to radically transform existing traditional and non-digital business processes and services.
According to her “The largest contributor to the nation’s GDP post-1970s was crude oil. With the oil boom in 1973-74, it was in the double digits at its highest; it was 40% of GDP until post-2010 when sectors like Agriculture and ICT started to redistribute that balance.
“Currently, oil contribution to GDP has returned to a single digit — pre-1970 figures, it sits at 6% of GDP today. The oil sector still provides for 95% of Nigeria’s foreign exchange earnings and 80% of its budgetary revenues.
“Nigeria, as we know, is a nation brimming with talent and potential, stands at a crossroads. While blessed with abundant natural resources, particularly oil, our economy remained heavily reliant on a single sector for over five decades.
“The price per barrel of oil needed for Nigeria to balance our budgets is– $139, Saudi Arabia $83.8, and UAE $67 (Kullab & Abdul-Zahra, 2020). Current global conditions make this untenable. Oil prices have crashed due to the COVID-19 pandemic, among other reasons (Alia Alzubair, 2021),” she said.
NIGCOMSAT Boss said further that the vulnerability to fluctuating oil prices exposes Nigeria to external shocks and hinders sustainable growth.
“There are many ways we can frame our road to diversification and non-dependence in the oil sector.
“With our experience with ICT, we can safely assume we could reform, and impact various sectors driving economic growth through digital transformation.
“This could be done by addressing the challenges and harnessing the opportunities, Nigeria can leverage digital transformation as a powerful tool for economic diversification, job creation, and shared prosperity.
In a remark, Prof Charles Igwe, vice-chancellor of UNN said that was one of the first Nigerian nationalists and his opposition to many colonial policies paved the way for the Independence of Nigeria
“Together with Nnamdi Azikiwe he co-founded the National Council of Nigeria and the Cameroon (NCNC) and became its president.
The VC noted that the Faculty of Engineering initiated the biennial lecture series in order to achieve the following goals; Highlight the faces of a man who has been described as the father of Nigerian Nationalism, Encourage present da engineers, surveyors, architects, and other professional to learn from his professional lifestyles and make every effort to leave good footprints on the sand of time.
Other targets of the HMML series are; To map out strategies and mobilize resources to improve the teaching, learning, and research environment within the Faculty of Engineering and the university at large,, and to identify major National issues of engineering importance, and through the learned discourse proffer engineering solutions to them.
“The theme of this HMML, ‘ Harnessing Practical Engineering Solutions doe Sustainable Economic Development’ is very apt for Nigeria and the world over where sustainability is the current jingle for every developmental solution, and I am happy that very distinguished professionals have gathered here for the discourse,” he said.
Igwe challenged the Dean of the Faculty of Engineering and other staff of the faculty to proffer immediate solutions to the energy crisis in the University and its environs.
Also in a remark, Prof. Emenike Ejiogu, dean, Faculty of Engineering, UNN said that the HMML series is one of the longest-running academic lecture series in any Nigeria university, noting that the faculty had instituted the lecture series in honour of Herbert Heelas Macaulay.
“The Faculty of Engineering Board resolved on October 5, 1978, to establish a Memorial Lecture series to be known as HMML, to honour Macaulay; the father of Nigerian nationalism, who trained and practiced as an engineer, architect, and surveyor.
“The first lecture was held in 1980 and has since continued every two years with many distinguished lecturers doing justice to the selected theme that the faculty board carefully selected according to the needs of time.
“This year’s (20th edition) HMML lecturer, Mrs. Egerton-Idehen is the first ever female to feature as an HMML lecturer, and she has chosen a very timely and appealing title for her lecture,” he said.
Ejiogu, who is also director, Africa Centre of Excellence for Sustainable Power and Energy Development (ACE-SPED) UNN, commended Prof. Igwe, UNN- VC and his management team for their support and encouragement in all the endeavours of the faculty.
He also commended other lead paper presenters, relevant stakeholders and the general public who attended and contributed the the success of the 20th HMML.
The occasion was chaired by Prof. Paul Eke, a professor of Digital Technology and System Engineering, Royal Academy of Engineering, University of Leeds, United Kingdom.
The highlights of the 20th HMML include; Gown Meets Town, a Technical Exhibition of practical projects of staff and students of the faculty of Engineering and interested private and public sector companies and organizations, with products and services relevant to sustainable economic growth, Technical Symposium and Panel Discussion, Alumni Homecoming Events, Unveiling and Handover of Agbebi Alumni Class of ’85 Building, among others.
Integrated System and Devices Limited (ISDL), a major provider of electronic security solutions, is delighted to announce the successful attainment of ISO 14001:2015 and ISO 45001:2018 certifications following a rigorous audit process conducted by Bureau Veritas Certification Holdings SAS-UK Branch.
In 2021, ISDL bagged the Quality management systems ISO 9001:2015, and now in 2024, with unwavering dedication to customer satisfaction, the occupational Health and Safety system ISO 45001:2018 and the Environmental management system ISO 14001:2015 have been consolidated to form an Integrated Management System.
These certifications, covering ISDL’s headquarters and branches, signify the company’s unwavering commitment to upholding the highest standards of quality management across all facets of its operations.
According to Oluseun Mabogunje, managing director of ISDL, the scope of the certifications encompasses the design, procurement, supply, installation, integration, maintenance, and after-sales support of various electronic security and Extra Low Voltage (ELV) equipment.
Mabogunje expressed his elation at receiving the IMS certifications, emphasizing ISDL’s dedication to delivering exceptional quality and service to its clientele. He emphasized that this achievement underscores the company’s ongoing pursuit of continuous improvement and customer satisfaction.
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