Shipowners Unity, CVFF Disbursement And NISA

BY EGUONO ODJEGBA

The shipping industry came under focus of late with about five developments, each critical for its mainstay and stability, both for the present and the future.

First amongst these developments was the exceptional resolution by the Nigerian Shipowners Association (NISA) to chart a new course for itself and all ship owners as it resolved to reunite in order to bring hitherto estranged members and everyone else onboard; with a determination to enhance its shipping prospects.

Based on the above resolution and in the realization that there is strength in unity, NISA set up a six-man reconciliation committee, to bring back to the fold, all ship owners and aggrieved members that had left the association. To make the reconciliation purposeful and successful, a non shipping member but a respected maritime player, the former National President, Association of Nigerian Licensed Customs Agents (ANLCA), Prince Olayiwola Shittu was brought in to head the committee.

Five members of the association considered to be neutral in the event that led to some members leaving the association were selected to work with Shittu.

Secondly, not quite long thereafter, the Minister of Transportation, Mua’zu  Jaji Sambo announced the presidential approval for the disbursement of the controversial  Cabotage Vessels Finance Fund (CVFF); as the Nigerian Maritime Administration and Safety Agency (NIMASA) announced  a N16 billion and USD350million component that has accrued to the Fund.

Thirdly, the announcements, particularly the sums of monies that has supposedly accrued to the CVFF account since 2004 when the mandatory contributions commenced, became issues of contention, which produced a potpourri of reactions, even as some ship owners not only suggested that the disbursement should be put on hold until the actual accruals are determined through a forensic audit; some industry players threatened to go to court to ensure that the true financial state of the Fund is determined.

Fourthly, the federal government through the Central Bank of Nigeria (CBN) announced the immediate lifting of customs duty (tax) on the importation of new ships though the provision of foreign exchange (forex) to operators to acquire ships at the official exchange rate. In view of the above developments, NIMASA last week expressed open frustration and to a large extent, reservations why operators preferred to quibble over secondary related matters instead of taking full advantage of the incentives offered by government.

The Agency wondered why shipowners chose to query the amount that has accrued as a first step, instead of coming up with templates of how the disbursement would impact the sector; in view of the protracted and sickening delay so far associated with the CVFF regime.

Fifth and not by any means the least, the various expressions, both of delight and or reservations by local shipping operators aggregated the cacophony of opinions canvassed by different camps of operators, viz-a-vix  shipowners associations; eliciting fears that the federal government may take advantage of the internal squabbles to decide it was no longer continuing the process in the absence of a united operators, and could as well hide under such to embark on another decade of political and administrative rigmarole.

Such a possibility was the hearth of the NIMASA Director General, Dr. Bashir Jamoh OFR remark last week, at the Ship Owners Association of Nigerian (SOAN) retreat, when he  in a worried tone what the  shipowners really want; to bicker or take advantage of government interventions to improve their capacity development.

For someone who has shown exceeding commitment to identify with the needs of the industry and to help grow capacity, Jamoh in his usual, unassuming but firm and honest ways, urged the various camps to collapse their divisions into a beneficial united body to make the interventions practicable, and without further delay.

His words: “It is high time we come together and ensure we benefit from what God has given us, and stop foreigners from taking over the coastal trade.

“Anyone getting this fund will get it on merit, mutual understanding, and based on the agreement with the bank and NIMASA. It is subject to the Auditor General’s audit, Federal Ministry of Transportation audit and External Auditors’ audit, so it is open.

“Instead of fighting to see the balance, concentrate on seeing how we can disburse what is available, increase our fleet and benefit from this trade that is very precious.”

Assuring that the Agency under his leadership will continue to sustain efforts to ensure a friendly operating environment for the indigenous shipowners, Jamoh added:

“The government has approved zero duty for imported new ships, with older ones attracting higher duty, while the second incentive was the Central Bank of Nigeria (CBN) monetary incentive that guarantees forex at official rate for ship acquisition, rather than at the exorbitant black market rate, and the recent approval for the disbursement of the cabotage vessel financing fund (CVFF).

“I try as much as possible to weigh the kind of assistance the Nigerian government can offer the shipowners in the environment they operate. All the investments at Lekki deep seaport will be useless, if ships do not go there. So, why don’t we put heads together, get the funds, acquire the ships and make our own ports lively instead of quarrel and fight? What do the shipowners really want?”

Thankfully, SOAN President, the essential Dr. MkGeorge Onyung on behalf of his group, thanked the DG NIMASA for his advice, with the pledge, reportedly, to act accordingly as counseled.

One of the founding members and pioneer President of  the Nigeria Shipowners Association (NISA), formerly Indigenous Ship-Owners Association of Nigeria (ISAN), Chief Isaac Jolapamo who was one of the first to fire the salvo, is believed to have soft peddled as NISA has adopted a much friendlier stance; especially based on the views of majority of its members.

Also, a former ISAN President, Capt Niyi Labinjo who was reportedly not excited about the planned CVFF disbursement, argued that the disbursement was not an end in itself, and that it was useless without the creation of cargoes or jobs for the vessels to be acquired; in the light of existing dominance of the crude transportation system exclusively by foreigners.

Capt Labinjo was obviously displeased with an operative clause of the Cabotage Law which empowers the Transportation Minister to exercise the powers to grant waivers to those with the capacity to lift crude purportedly in disregard of local operators without the required capacity; which many believed have been criminally skewed against indigenous operators by the Nigerian National Petroleum Corporation (NNPC) in collaboration with the Transportation Ministry.

Labinjo was quoted to have said: “I cannot be excited about this announcement because, getting a ship is only one aspect, but ensuring that the ship has employment all through her life is another thing. All our refineries are not working, what would the ships be doing?

“In other countries, it is not just the money that is arranged, they also arrange for the jobs, because without cargo, the ship is an ordinary thing, an iron. Personally I will never apply because I can’t see the jobs that would enable me recover and pay back the money.”

Like a few other players, Capt. Labinjo expressed pains about the almost zero ownership of crude tanker, essential to participate in the country’s Cabotage Trade; noting that the CVFF may not be able to address much of what constitute the industry’s accumulated challenges.

“When you talk of Cabotage, it must be restricted to your people, by now, we should not have any waiver again, (but) Indians and Pakistanis are the ones getting the waivers because they are the ones running our tanker business, how many Nigerians still have tanker business running? Maybe three, all of them have gone under.

“We have advocated something which they have not complied with, and unless they do so, we would continue to get it wrong. How can you get our money disbursed to us without getting us involved as part of the team of the selection process, they have not done that.

“There must be among the selection team, members of the Nigerian shipowners. I am one of the people that took NIMASA to Indonesia to see how their Cabotage is being run. First and foremost, in Cabotage, you must restrict it, we have been running waivers for nineteen years now, this means that we are not growing.”

Others who have spoken on the developments include Capt. Taiwo Akinpelumi, CEO of Westgate Atlantica (Exclusive) Limited and Steering Committee member of NISA. Notably, Akinpelumi thinks that the first approach is not to antagonize the government on the issues of the actual accrual to the Fund, but rather accept what is available and seek to strengthen the Cabotage regime processes and procedures; including audit of accruals which he believes is a continuous process.

From the foregoing, what is most critical and indeed common to all stakeholders, particularly our shipowners, is the need to present a common front, which alone can hasten and deepen the collective gains.

And since NISA has been home to every shipowner as it were, it makes sense that its recent resolve to encourage every member to bury the hatchet and return to the fold is perhaps the greatest demonstration of commitment to rebuild the industry and retool its capacity development through various options members are expected to advance as an acceptable instrument for the industry’s inward integration.

In summary, everyone still covered by the umbrella of NISA and the leaders and member of SOAN and Shipowners Forum led by the indomitable doyen of the maritime industry and gender pacesetter, Mrs. Margaret Orakwusi, who are otherwise very patriotic and forward looking business tycoons, should for the sake of country and the sake of the growth of our shipping industry, show magnanimity in selflessness as they return and collapse once more into a single assembly and under one roof; and thus give NISA a voice.

There can be no controversy that only such a formidable and united house will guarantee and hasten whatever improvements are expected in the cabotage regime; not only for the immediate time but also for the  foreseeable future; since the success or otherwise of this unity, will largely determine the future course(s) of the industry.

Shipowners cannot afford to fail to take advantage of the positive gestures that is being offered by this government, particularly the current NIMASA administration, which leadership is not only a maritime lover, but one that passionately inclined and most willing to advance the cause of cabotage trade and shipping capacity development.

Future generations of Nigerians, particularly industry players, will not forgive today’s stakeholders if the lack of unity and cohension again creates another decade of blindfold, of insincerity and the prolongation of the hitherto comatose indigenous shipping industry .

While it is heartwarming to hear the Chairman of NISA Reconciliation Committee, Prince Olayiwola Shittu assures that the peace process is on course, patriotic observers are nevertheless anxious for a speedy resolution of the peace initiative.

When contacted to have an update on the reconciliation and peace process, Prince Shittu said,  “Well, the peace process is on, we are discussing and have met quite a number of them, peace moves are not achieved overnight, but l am satisfied that we are getting somewhere; that is all l can say for now.

“NISA will be inviting us as a committee to its general meeting in the New Year where we hope to submit our report.  Remember that peace negotiation is not usually done at the market square or under news headlines, we are reporting to our principals and l believe that at the right time, they will be in the proper position to speak to the press.”