Business Hilights
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Seat up in delivery of Cabotage regime in Nigeria, experts tell NIMASA boss

Cabotage Act was designed and introduced to primarily grow participation of Nigerian maritime practitioners in the international maritime business and deepen indigenous involvement in local maritime industry, but the regime since takeoff had failed to meet target productivity after all.

The Cabotage law, as enacted ought to have changed for the better, the totality of the existing costal shipping opportunities for Nigerian companies and other genuine business partners. But its enforcement, according to observers has not been diligent enough on the side of the regulator, the Nigeria Maritime Administration and Safety Agency (NIMASA) in the last 13 years.

By virtue of the commencement of the Act on the 1st of May, 2004, a new vista of shipping business and market opportunity ought to have been automatically opened to indigenous Nigerian ship owning and management interest, but it has not been so after all.

The regime, according to industry pundits is a booster for local content in shipping business but Nigerians have nothing to show for it in the last couple of years and the development has forced experts in the sector to advise the new Director general of NIMASA to distance self from Rivers State Politics and face the work of driving maritime administration which cabotage issue remains a key factor.

Reviewing the failure of past leaderships of NIMASA in failing to do the needful in driving cabotage regime, Chief Laz Okoroji said not much had been done since the current management came on board last year.

He called on the Director General, Dr. Dakuku Peterside not to follow the same line of inactivity as followed his predecessors who are now battling for their life in EFCC net.

According to the Executive Vice Chairman of SIFAX Group, Dr. Taiwo Afolabi, Nigerian economy is losing a lot due to non-implementation of the Cabotage law. To him, the scenario had adversely affects the capacity of the maritime industry to maximise its contribution to the nation’s economic growth.

Analysts say the Cabotage law makes provisions for domestically owned and Nigerian registered vessels to have exclusive opportunity of engaging in the domestic coastal carriage of cargo and passengers within the coastal and territorial inland waters of Nigeria. This is presently not a reality in the maritime sector.

While lamenting on the failure to drive vital sections of the law that aims at empowering Nigerians to achieve more in the maritime sector so as to add more value to the economy, Afolabi recalled that a critical portion of the law, the Cabotage Vessel Financing Fund, CVFF, came into being with the promulgation of the Coastal and Inland Shipping (Cabotage) Act in 2003.

In statement by the corporate affairs manager of SIFAX, Muyiwa Akande, Afolabi said it was included in the law that the fund would be derived from two percent deductions of every contract awarded and the funds would be used to help grow the capacity of the indigenous ship owners and also provide financial assistance to Nigerian operators in the domestic coastal shipping in order to acquire vessels.

While noting that a lot of problems have bedeviled the implementation of the law, Sifax boss appealed to the Federal Government, through the relevant agencies, to take a second look at the law and expedite action on its implementation for the benefit of the industry and the country’s economy.

For a long time, Afolabi lamented that indigenous operators had complained about domination of the domestic maritime business by foreign ship-owners despite the law restricting that area of business to Nigerian ship-owners.

He argued further that “With more than 30 years of experience in port management and support services in shore bases across the country, we will leverage on our competency and continue to partner with government and relevant stakeholders to deliver great value to the Nigerian economy the provision of best-in-class logistics services”.

Business Hilights recalls that the Coastal and Inland Shipping (Cabotage) Act 2003 was quite old, the Act is part of the policy of the Government to create opportunities for increased Nigerian participation in all sectors of the economy especially the maritime but it has not been so.

Besides, the enactment of the Act was also in response of the yearning of Nigerian stakeholders in the maritime industry both in the public and private sector for execution and legislative intervention to stimulate to stimulate the participation of Nigerian citizens in its domestic coastal trade.

In recognition of the technical capacity of the shipping industry, Section 51 of the Act provides for a transition period of one year with on which the necessary modalities and guidelines for the smooth running of the Cabotage Regime would be developed. The one year bridging period was for the industry to make the necessary adjustments and to be fully sensitized on the expectation of the regime. To facilitate the enforcement of the Cabotage Act, the Honorable Minister of Transport constituted a committee on the modalities for the implementation of the Cabotage on the 12th of February, 2004. Up till now, stakeholders are confused on the whereabouts of the Whitepaper or chances of setting up another one.

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