Ownership of vessels
In this column last week, it was stated that the Cabotage Act of 2003 is to stimulate the development of indigenous capacity, conserve and generate foreign exchange for the nation, engender economic prosperity and create employment in Nigeria’s maritime industry. Most of the vessels operated by indigenous operators for cabotage operations are below specifications and not seaworthy. It is common to find very old vessels in our coastal waters as reflected in the number of shipwrecks. Although an age limit of 15 years is placed on vessels operating under the Cabotage Act, it is argued by some indigenous operators that effectiveness and performance of vessels are not only determined by age. They further argue that any vessel that is maintained regularly is seaworthy. Those who only consider maintenance of ships as essential requirement for seaworthiness are not wrong but perhaps ignorant of the fact that an old ship will require huge funds to maintain. They may also be oblivious that maritime safety is very key to coastal shipping. The view that age of a ship does not matter in determining her seaworthiness is flawed. This is because seaworthiness of a ship goes beyond regular maintenance. For a vessel to be categorized as seaworthy, the equipment must be operational, while the skills and fitness of the crew must be of acceptable international standard.
Shipwrecks constitute a form of waste in our waters and indeed environmental pollution. When ships for coastal business are not seaworthy, maritime safety is likely to be compromised. There is likelihood of environmental pollution in the event of an accident with severe penalties in accordance with the provisions of the International Convention for the Prevention of Pollution from Ships (MARPOL). To reduce marine environmental pollution in the oil and gas sectors of the nation’s economy, vessels are now mandated to have double hull. As a result of shift to double-hull tankers on 5 April, 2005 by the International Maritime Organization (IMO), oil discharges and spills to the sea have been reduced globally by 63 percent when compared to the mid 1980s, while tanker accidents have gone down by 75 percent and wastes from industrial discharges by 90 percent. The dominance of Nigeria’s coastal water by single-hull ships, besides other political considerations, is perhaps responsible for waiver to enable foreign ship owners with double-hull vessels operate in Nigeria’s coastal water.
The payment of $50,000 as waiver by indigenous ship owners is exorbitant. This amount may need to be reviewed downward to enable indigenous ship owners break even. Granting of waiver is technical and its management should not be vested in the minister of transport alone. The granting and management of waiver should also include industry professionals and representatives of ship operators. Otherwise the probability is high that the minister of transport who most times is a politician may grant waivers alone purely on political grounds to cronies in order to build indigenous capacity in shipping.
Shipbuilding
In the past, a few Nigerian shipyards built service and supply vessels but this was not considered profitable due to high cost of production as it took about two-three years or more to build such vessels. Available data shows that in 2012, Nigeria had about 19 ship repair yards with only 85 percent of these yards underutilized. With the upsurge in demand for ship repair in Nigeria occasioned by the Cabotage Act, the management of a few shipyards have decided to concentrate on ship repairs only because of comparative advantage over shipbuilding in terms of net profit. The few shipyards that are utilized for ship repair are booked from the beginning of the year till the end such that some vessels end up in countries like Cameroon, Ghana and South Africa.
The shipbuilding nations are South Korea, USA, China, India and Brazil amongst others. Nigeria is not one of the countries acclaimed by the world to be a shipbuilding nation. In Africa, countries such as Algeria and Egypt have built ships in commercial quantity for cabotage operations. The newly-commissioned NIMASA shipyard and dockyard should be dedicated more to shipbuilding. This will enable the nation develop capacity in shipbuilding while assisting indigenous ship operators to acquire new vessels which may be more expensive than an imported vessel of same tonnage. If shipbuilding is encouraged in Nigeria, one of the pillars of the Act which specifies that ships must be indigenously built would have been satisfied. Else, weak shipbuilding capacity would be a challenge regarding implementation of the Cabotage Act in Nigeria.
Manpower
Under the cabotage regime, indigenous vessels are to be manned by Nigerians but unfortunately because of the dearth of qualified seafarers in the maritime sector, this requirement of the Act is difficult to implement. The training programmes embarked upon by NIMASA have not made significant impact on the level of human capacity development for cabotage operation. Nearly 3,000 young Nigerians are reported to have been sponsored for training by NIMASA at different maritime institutions. This figure is inadequate as the standard practice is to have three professionally qualified staff ashore to support one staff onboard any vessel. There is manpower gap in the industry as Nigeria will need to train more seafarers.
The Nigerian Maritime University, Okerenkoko, Delta State is a good step in building human capacity for the nation’s maritime industry. Government should ensure that within the next five years, the maritime university is in the White List of the IMO. This will give graduates of the maritime university pro-industry qualifications required in the maritime industry as ship owners will not employ Nigerians that are not qualified to crew their vessels. These efforts will bridge the manpower gap created by opportunities within the nation’s maritime industry. Currently, the manpower shortage in the marine industry has to be beefed up with foreign seafarers. By implication, manpower is also a challenge exacerbated by inadequate training facilities and ocean-going vessels for sea-time amongst other deficits. ‘Funding mechanism and the way forward’ will conclude this piece next week.
MA Johnson
