‘National Fleet Committee Hadn’t Mandate To Establish Shipping Line’ Ogbeifun
BY EGUONO ODJEGBA
A member of the defunct National Fleet Committee, who is the Chairman of Starzs Investments Company Limited, Engr, Greg Ogbeifun has described expectations in some quarters that the committee was saddled with the setting up of a shipping line as a misconception.
While lamenting the pathetic situation Nigeria has found itself in view of her inability to participate in global cargo trade for lack of shipping line and the issues of shipping tax regime, the master mariner also blamed a former minister of transportation, Mr. Chibuike Amaechi for frittering away an opportunity in the last administration to re-establish the national carrier.
Ogbeifun who was fielding questions from journalists during a maritime talk show tagged National Discourse organized by publishers of Nigerian Maritime Newspaper at the Rockview Hotel Apapa Lagos Tuesday, November 7, 2023, with the theme ‘New Ships, New Ports, What Infrastructure, Tools and Skills’ explained in detail the factors responsible for the regime of cost insurance freight (CIF) in the movement of her crude export. In an emotion laden voice, he also volunteered suggestion on the way forward.
As a member of the national fleet committee, could you kindly explain why it failed to achieved its mandate and term of reference?
I’ll summarize the question by the MC who want to know what happened to the Nigerian Fleet Project. Number one, lack of political will, which l have just addressing, number two… I’m careful not to use derogatory words like ignorance, and number three, greed and selfishness. Ironically, the person that initiated the re-establishment of a Nigerian fleet, you notice I’m choosing my work carefully, Nigerian fleet, not national fleet, because they are two different things. Nigerian fleet can be private sector driven, can be government driven, which is why national line failed, and it can be public private sector driven… where government which is minority helps to create the enabling environment. We did a good job…the committee as chaired by Hassan Bello. We went around the world to find out what other countries are doing to establish their own fleet. And we engaged, in fact, let me give credit to Rotimi Amaechi, he initiated the process when he came into office and unfortunately he killed it before he left. He’s my friend and brother, if you had followed me when he was minister, I always engaged him on this, that he was responsible by not doing the right thing. What do I mean by that? He took us to Singapore to engage with PIL International with a view to partnering with us or with any Nigerian entity that wants to establish. PIL looked at the MoU with us, refused to sign the MoU until Nigeria reviewed her tax regime. At that time, if Nigeria did not review their tax regime amongst other issues, then any fleet, Nigerian fleets when they are partners, will not be globally competitive. Very important…so we came back and decided to focus on those factors that will enable the Nigeria Fleet initiative, whether it’s private or whatever, to happen. We followed up, we found out that in the compendium of the Nigerian Investment Promotion Council, which details the relevant sectors of the Nigerian economy as far as GDP is concerned; shipping was not there at all. In other words, government did not even recognize shipping.
Aviation was number three, agriculture and many others, so we took all these factors to government…these are the issues, these are the challenges, if you do xyz… and let me tell you this, our study as a committee… people were looking forward to our committee setting up a shipping line, no, that wasn’t our responsibility. Our responsibility was what Nigeria can do to enable you set up your own shipping line, to enable you set up your own shipping line. And in our study, we looked across board…the different major imports that this country is involved in, it could be bulk, it could be container, it could be oil and gas. So in other words, in this hall, different people can come together to do container fleet or bulk or xyz, so it was not the position of the National Fleet Committee to set up a shipping line. So this became another challenge, government needed to understand, and Amaechi, that’s where he got it wrong, he said that ship owners did not have money to start up ship, that was what he was saying everywhere and that was completely wrong.
So we took our recommendations and engaged parliament, we went as far as the presidency where Paul Usoro who most of us know was a spokesperson in making the presentation to Prof, Osinbajo (former Vice President) and his team. First, that the country has to recognize that shipping and maritime is key, and put it in the compendium. Number two, this and this and this are what a government should address. Most countries, because of the capital intensive nature of shipping…if you want to buy a ship or build a ship and register it in their country, number one, import duty is zero. Number two, tax holiday for five years to enable your cash flow amortize your loan. Number three, VAT review and all such things to make it possible for whether you are private, whether you are public, you must address that… for different people here want to set up different types of fleets. So we made all this clear to government…put everything on the table. That was where my friend the minister then, Amaechi would have carried that thing and pushed it through because he had clout even with the President. Unfortunately, at that point he abandoned the project and went for railway.
Why is our CIF tax regime not been implemented?
Now somebody talked about free on board (FOB), l think it was Godfrey, FOB vis-a- viz cost insurance and freight (CIF). At that time, particularly NNPC, they only approved FOB for good reason. FOB means you Godfrey, you want to buy oil in Nigeria and you are in Ukraine. We will give you that oil in Nigeria port, from there on you’re your own, which was good for the country at the time, why? The country does not have one ship, so if you are saying we should do CIF what it means, Godfrey, is you stay in your country, pay for the cost of the cargo, pay for the insurance, pay for the fleet, we will use our ship to bring it to you, where is your ship?
I’m breaking it down so that people can understand what the issues are. So NNPC now set up NIDAS with office in London, ostensibly to carry our products or crude. Sadly too, NIDAS goes to Angola to charter ships from Angola. What have we gained? His Excellency Buhari for whatever anybody feels about him, patriotically….when he came into office, he looked at the terms of contract of afreightment of Nigeria crude, he was angry. He said it was too lopsided in favor of the ship owners and he gave them ultimatum to do xyz or else… But those people called his bluff and refused to come to Nigeria to carry crude, they formed a gang, you know they always gang up, and they refused to come. Buhari after seeing what it was doing to our trade, went back beg them to come. Now if this country has just 10percent of the fleet needed to carry our cargo, he will call their bluff. But we don’t have, it’s pathetic.
We can go on and on, but what is the way forward? Two things, I’ve said it before, go back to national fleet recommendations. Somebody said they needed me in Abuja to say xyz I said, no, I’m not talking anything, there’s nothing more to talk. Please go to the shelf, all the recommendations are there in your office. Go and bring them out and implement. And that is what you people the media should be advocating, p lease. So the issue of CIF is patriotic, but we are not in a position to even implement until you and I think of bringing up a fleet of crude tankers on cargo, we are stuck, we are the mercy of everybody, even Angola, sadly.
So the political will comes in if those in office understand the issue and ensure that they go for it, irrespective of personal gains. But guess what? If we are able to get the policies right, all of us in and out of government can set up our shipping lines and make profits and make money both those in office rather than trying to share the national treasury, cash and walk away.”
Agitated and emotional about Nigeria’s situation, the retired master mariner also announced his decision to annul his retirement and return to active maritime activities, because of the establishment of the marine and blue economy ministry, which proposition he has championed.
He expressed his conviction that if government implements the national fleet committee recommendations, the prevailing challenges in the shipping sub sector would disappear. “Please. I’m 72, I’m not afraid to die, quote me the way you want to quote me.”
Estimated revenue loss
“On annual loss, I’m always afraid to quote statistics. Eleven, twelve years ago, at that time our National Bureau for Statistics were reasonably accurate. If you went there to seek statistics, you can be sure that to a large extent then, that statistic is correct. If I ask any of us in the hall right now, what is the population of Nigeria, can anybody answer? So it has become difficult because even an NNPC are arguing how many quantity of crude they are exporting, producing, so if I’m to just hazard a guess, this country is losing close to a trillion naira in the entire shipping sector, both infrastructure, human capacity, cargo carriage.”