Category: Maritime

The Cabotage Vessel Financing Fund (CVFF) is to assist indigenous ship owners in the acquisition of assets, although they are expected to pay back. However, 19 years after the idea was floated and approved, the $350 million CVFF remains inaccessible, thereby defeating its objective of boosting international trade and creating jobs. OLUWAKEMI DAUDA writes.

IT was a laudable idea aimed at boosting the fortunes of the maritime sector. The Cabotage Vessel Financing Fund (CVFF) is to assist indigenous ship owners in acquiring assets, although they are expected to pay back the loan. However, 19 years after the idea was approved by the Federal Government, the $350 million CVFF remains inaccessible, no thanks to civil service red tapism, which has defeated its objective of boosting international trade and creating jobs.

The Director-General, Nigerian Maritime Administration and Safety Agency (NIMASA), Dr. Bashir Jamoh,  is, however, passionate about the actualisation of the Fund. A few days ago, speaking on Inspiration 92.3 Fm Lagos Shipping on Radio, he said nine primary lending institutions (banks) had been listed for the disbursement of the CVFF by the agency’s Governing Board and that their names had been forwarded to the Minister of Transportation for approval.

Explaining the cause of the delay, Jamoh, who assumed duties as DG in 2020, said NIMASA was only trying to avoid the previous pitfalls experienced under the Ship Building and Acquisition Fund when beneficiaries diverted the funds to other areas.

He said NIMASA, with the support of the Federal Ministry of Transportation (FMoT), was exploring other options to ensure that the CVFF is properly disbursed.

His words: “If you can recollect, last year, we advertised for expression of interest as provided by the guidelines of the Cabotage Vessel Financing Funds and after the advert, about 12 banks indicated their interest and we shortlisted nine. As the law provides, we forwarded it to the Minister of Transportation.

“The delay is to avoid the mistakes made with the disbursement of the Shipbuilding and Acquisition Fund where beneficiaries collected the funds and refused to pay. Every Minister is scared and afraid to be part of that failure.

“What every Minister of Transportation wants to do is to make sure that before disbursing these funds, let it not turn out to be another national cake, just like the case of the moribund Ship Acquisition Fund. New ideas are now on the table as to how best to avoid this pitfall.’’

In 2020

In late 2020, Jamoh raised the hope of players in the sector when he announced at a virtual meeting with the Shipowners Association of Nigeria (SOAN) that the immediate past Minister of Transportation, Chibuike Amaechi, had approved the disbursement of the fund.

He said: “Only the details are being discussed with a view to avoiding former mistakes and ensuring effective and efficient utilisation of the fund. We have also submitted proposals to the minister to seek fiscal and monetary incentives for our ship owners.  Since then, the fund is yet to be disbursed by NIMASA.’’

 

The CVFF

Observers say that CVFF is not government, or free, money. It was created by the Coastal and Inland Shipping Act, 2003, popularly known as Cabotage Act, which states: “There shall be paid into the Fund, a surcharge of two per cent of the contract sum performed by any vessel engaged in the coastal trade; money generated under this Act, including the tariffs, fines and fees for licences and waivers; such further sums accruable to the fund by way of interests paid on and repayment of the principal sums of any loan granted from the Fund.”

Also, there are primary lending institutions (PLIS), that is, commercial banks, accredited to handled the CVFF. They are expected to contribute 50 per cent of the CVFF. They are Fidelity Bank, Skye Bank (now Polaris Bank), Sterling Bank, and Diamond Bank (now Access Bank).

Manager of the fund

The fund is not managed by NIMASA as many seem to erroneously believe. The PLIS does, while NIMASA provides fund administration and corporate governance. The Federal Ministry of Transportation is the third party to the CVFF, while the obligor (i.e. an applicant that has accessed the fund) the fourth. Schedule 44 of Part VIII of the Act states: “The fund shall be collected by the National Maritime Authority (NIMASA) and deposited in commercial banks and administered under guideline that shall be proposed by the Minister and approved by the National Assembly.”

Beneficiaries

According to Schedule 45 of the Cabotage Act, “the beneficiaries of the fund shall be Nigerians and shipping companies owned by Nigerians … for “the development of shipyard/maritime infrastructure to facilitate vessel construction, repairs and maintenance,” as well as “other shipping auxiliary projects relating to the development of local tonnage capacity and shipyards”.

 How much can a ship owner get from the CVFF?

A ship owner can get about $25 million and shall have a maximum of seven years’ payback. The CVFF is to be disbursed on a single-digit interest rate of 5.6 per cent, 0.25 per cent processing fee, according to NIMASA.

 

Qualifications for accessing CVFF

Not all indigenous shipping service providers that are trading on Nigeria’s cabotage area will get the loan. The law, which establishes the fund, also states recommendations for accessing it. Firms wanting to access the CVFF loan must have been paying cabotage dues of two per cent surcharge, licence and waiver fees. The company will have contracts with international oil firms.

Also, the firm must have positive cash flow and bankable feasibility reports, which shall be verified by NIMASA and the PLIS, among others.

Indigenous shipping firms seeking to borrow from the CVFF are also expected to comply with the Cabotage Act and the CVFF guidelines, including domiciliation of company’s account with PLI of their choice. They shall provide full condition survey report on vessel to be procured, (for vessels) and legal mortgage on vessel to be procured.

A maritime lawyer, Dr Dipo Alaka, said the CVFF scheme was created in 2004. “Since then, indigenous ship owners have been longing to benefit from the fund after several unfulfilled promises by the successive administrations,’’ he said.

Alaka said the CVFF fund needed to be disbursed and urged NIMASA to do so before the end of the second quarter of this year.

“The fund, an off-shoot of Cabotage regime, was set up to empower indigenous ship owners, increase their tonnage, enhance their capacity to compete in coastal trade and generate employment. More important is that the fund is the two per cent contributions of ship owners deducted from the value of their contracts under the Cabotage regime. “But it is sad that almost 18 years after, no single dollar has been disbursed from the fund and the endless promises keep coming as if some people somewhere are benefiting from the nondisbursement of the fund,” Alaka said.

An analyst, Mr Kehinde Adeleke, urged NIMASA to disburse the fund and create enabling environment for the private sector to invest in the industry to achieve the objective of developing the nation’s blue economy and boost the revenue of the Federal Government. “But it is sad that almost 18 years after, no single dollar has been disbursed from the fund and the endless promises keep coming as if some people are benefiting from the non-disbursement of the fund.

 

Senator queries fund’s non-disbursement

The presidential candidate of the New Nigeria Peoples Party (NNPP), Senator Musa Kwankwaso, during the week, queried the non-disbursement of the fund to ship owners.

Kwankwaso, who spoke in Lagos at a town-hall meeting for Maritime Agenda, organised by the Prime Maritime Project, ahead of next year’s general elections, also expressed shock over failure to refloat the Nigerian National Shipping Line (NNSL), many years after it collapsed.

He said: “So many things have gone wrong with the industry. I can still remember the days of the Nigerian National Shipping Line (NNSL) with its beautiful ships flying Nigeria’s flag across the globe! Why did it die? Why do we not have a replacement as the giant of Africa? What has become of the Cabotage Vessel Financing Fund (CVFF)? Why has it not been disbursed to the beneficiaries? From my little knowledge of the sector, a lot of questions are begging for answers.

“In summation, the desired assistance to importers of goods, manufacturers, including exporters and other ancillary stakeholders associated with port operations and management, will be guaranteed under our party’s regime, by the special grace of God.”

Kwankwaso also bemoaned the underutilisation and overutilisation of the Eastern and Apapa Ports. He said: “Lagos port system originally designed for a population of less than 50 million in the 1950s with less than 20 million cargo throughput has remained almost the same for over 200 million population in 2022. Our government will look into constructing a rail line from both Apapa and Tin Can Island ports to a dry port area outside Lagos, where arrived goods should be domiciled for clearance in order to stop heavy trucks from causing gridlock in Lagos.

“We should also look into the possibility of opening other ports such as Warri, Port Harcourt and Calabar, among others, to decongest the Lagos port. He requested the stakeholders’ forum to form the nucleus of the group that will design “a workable and actionable maritime sector reform template, which should include clearance of goods arriving our ports within 72 hours, as done in other countries.”

Kwankwaso also vowed to place the control of the nation’s maritime sector in the hands of stakeholders, saying: “Under our watch, maritime professionals will take charge of the maritime sector.”

 ‘Too many changes in govt’s agencies affecting sector’

Earlier, chairman of the occasion, Mr Kunle Folarin, had enumerated the rot in the sector, regretting the incessant changes in the leadership of maritime regulatory agencies and the supervising ministry, which are often headed by appointees that have no knowledge of the industry, which adversely affects its growth.

This was also listed by the Prime Maritime Project, which said the series, which would be availed presidential candidates, was meant to extract a social contract from them on their plans and commitment to placing the maritime sector in the front burner as a major economy driver.

 

New road map

Nigerian ship owners may soon heave a sigh of relief as the Federal Government may have unveiled a new road map that will see Nigeria actualising the dreams of becoming ship owners under the CVFF very soon.

According to Jamoh, “we have approached the Bank of Industry and commenced discussions on using the CVFF as seed money, getting additional funding, and by this getting as many beneficiaries as possible on board the scheme.

“We are also into some research as to what types of vessels or boats we need for inland waterways so we could maximise our waterways. The issue of these small crafts having constant accidents is also giving us worries.”

Jamoh also said the Minister of Transportation Ma’uzu Sambo has agreed that some of the ministry’s officials would travel to Kenya this month because the biggest ship building industry domain is building a shipyard in Kenya that will address the kind of issues we are facing.

“So, they want us to go and see the kind of shipyard they are building for the Kenyan Government. If we see it and it is in line with our thoughts, then we would now come and replicate same here,” Jamoh said.

He said indigenous ship owners would be part of the trip and decisions taken would be consensual. “ But what I am telling you is just a proposal. The stakeholders will be carried along and they will be able to see what we are doing and everything,” he said.

Few days ago, the Federal Executive Council (FEC) okayed the development of the $2.59 billion Badagry Deep Seaport. In this report, OLUWAKEMI DAUDA examines the prospects and proffers solution to the obstacles to the multibillion-dollar project.

The Federal Executive Council’s (FEC) approval of the $2.59 billion Badagry Deep Seaport, Lagos was a relief in many ways. Besides that it would create employment for about 250,000 Nigerians and attract more foreign Direct Investment (FDI), more importantly, it would decongest the Apapa Ports, which access roads are hampering their huge contributions to the economy. But there are more problems.

The Badagry road is not only an eyesore, but also clog in the wheel of progress. For years, the government has neglected the once-busy expressway, known mainly for its trans-regional role in West Africa. And even when its contract was awarded, the construction has been slow, very slow.

 

What Sambo said

Speaking with the State House Correspondents after the FEC meeting, the Minister of Transportation, Muazu Jaji Sambo, said the project would be funded by private partners.

Sambo said:  “The project cost as contained and approved in Council, based on the final business case, as approved by the Infrastructure Concession Regulatory Commission (ICRC), in line with the laws stood at $2.59 billion. It has to be developed in four phases with milestones and a concessional period of 45 years. Reversion is, as I said, to the Federal Government.

“This is to further the government’s goal of making Nigeria the maritime hub of the West and Central African sub-regions. This project, it may interest you to know, will also generate total revenue of over $53.6 billion over the concession period. It will create about one quarter million jobs and also attract foreign direct investments to the country and help in improving Nigeria’s economy in general and the well-being of Nigerians.’’

 

Africa’s biggest port

According to its promoters, the port is aimed to be Africa’s biggest deep seaport.

The state government, it was gathered, has plans to construct the deep seaport on a piece of land measuring over 1,000 hectares in Badagry.

The port is expected to create thousands of job opportunities for the citizens and has positioned the country to be the first country in Africa to host the largest cargo container port.

 

Port’s Master plan

The Badagry Port and Free Zone is a new deep-sea facility in Nigeria, expected to be the largest deep sea port in Africa. It will include a container terminal, oil and gas services and a liquid bulk terminal, with cargo and Ro-Ro facilities.

Following APM Terminals’ appointment, Royal HaskoningDHV’s work on this project has involved the development of the port layout and master plan, as well as the procurement and supervision of onshore and offshore soil investigations, hydrographic surveys and met-ocean studies.

The promoters said the state-of-the-art Badagry Port and Free Zone will support strong, sustainable growth. It will provide the deepest water in West Africa, allowing larger vessels to visit West Africa. This will allow Nigeria’s port system to remain competitive in the global marketplace

 

What Sanwo-Olu said

In February, the Lagos State Governor, Mr Babajide Sanwo-Olu, assured that the construction of Badagry Deep Seaport would not be delayed once it is ratified by the Federal Government.

Sanwo-Olu gave the assurance during a stakeholders’ meeting and community engagement on Badagry Deep Seaport Project  at the Administrative Staff College of Nigeria (ASCON) Auditorium in Topo, Badagry, amid outcry of the host communities over alleged neglect and delay of the project, an idea that was birthed 10 years ago.

The governor also assured the people of Badagry that his administration was determined to push development to the axis of Lagos, reiterating his government’s readiness to compensate residents for economic losses on buildings, ancestral lands, farms and sites displaced.

 

Apapa seaports are overstretched

Also in May, the Lagos State governor said plans had reached an advanced stage to begin the construction of Badagry Seaport.

He made this known at the All Markets Conference 2022 (AMC’22), Lagos organised by the Ndigboamaka Progressive (Markets) Association, with the theme “Development and Sustainability of the Nation’s Economy.”

He explained that the facilities at the Apapa Seaport were overstretched, adding that efforts to reduce the challenges had produced little results.

 

Benefits

According to the governor, the Badagry Deep-Sea Port represents a multi-level potential for growth for the people.

He stated that once the Badagry deep seaport project was fully operational, it would improve the lives not only in Badagry, but also in the state, and the West African region. He emphasised prioritising employment and capacity building for the youth and women.

Sanwo-Olu urged stakeholders to collaborate to make the seaport a reality.

 

Concerns of the people

An importer and resident of the area, Mr Segun Agbato, urged the promoters of the port to be fair to host-communities.

He called for consideration of indigenes in job placement and award of contracts, and consideration of indigenes when there is a vacancy.

“It is important for the promoters of the port to ensure that they are fair and just in their dealings with host-communities to ensure a peaceful environment for oil production.

“As elders, we are irrevocably committed to ensuring a better deal for our host-communities and as such, we encourage all those behind the project to do everything humanly possible to make peace with their host communities.

“To foster better relations with the community, the promoters should ensure they consider qualified indigenes of host-communities in their recruitment process and contract awards in the spirit of the Local Content Act,’’ Agbato said.

 

Challenge

Findings have shown that the development of a large-scale greenfield port to accommodate a container terminal, oil and gas services, a liquids terminal as well as general cargo and Ro-Ro traffic is vital.

 

Solution

We developed the port layout, master planning, preliminary designs and cost estimates of the quay structures, breakwaters, dredging and land based infrastructure as well as the soil investigations and hydrographic surveys and ESIA scoping works.

 

 

Buhari promoting private sector

The Buhari Media Organisation (BMO) said the approval of $2.5billion for the development of Badagry Deep Seaport in Lagos State has reaffirmed the commitment of President Muhammadu Buhari’s philosophy of private sector leadership in its economic development agenda.

The group said the gesture also shows a strong determination by the Buhari administration to diversify the nation’s economy.

In a statement by the group’s  Chairman, Niyi Akinsiju and Secretary Cassidy Madueke,”We believe that this project will be of great value to Nigeria, in terms of employment generation, increase in port capacity, and as well improve shipping business. Besides, it will ease congestion in Nigerian premier port in Apapa, Lagos and become one of the most modern ports in West Africa and support the growth of commercial operations in the region.’’

The group urged stakeholders in the project to play their roles in line with the rules and regulations, adding that “the Buhari administration will continue to provide an enabling environment for local and foreign investors to thrive”.

 

Hurdles against the port

A maritime lawyer and university don, Dr Dipo Alaka and other stakeholders, commended the Federal and state governments for the siting of the port, but warned of hurdles that might come with it. They, therefore, urged the government to address the challenges.

They maintained that this was necessary to forestall a repeat of the debacle at Apapa and Tin Can Island ports. The first hurdle, according to them, is infrastructure. Alaka said if cargo would be evacuated from the seaport to other parts of the country, there would be a lot of problems as the Badagry road in its current state might not accommodate traffic from the deep seaport to the rest of the country unless, attention is paid to it.

“Unless the port is going to serve as a trans-shipment port where vessels will berth and discharge goods to vessels going into other seaports, if not, the project needs to be properly examined.

“The main impact of the project on the social and economic life of the people also has to be assessed,” they said.

He said the ultimate aim of the port was to take cargo from Lome, Tema and other neighbouring ports that had Nigeria as their final destination, but argued that without proper planning, a seaport in Badagry would not be a sound business decision.

For the port to be economically viable, he urged the state government to ensure that there are many factories in Badagry axis for the seaport to serve as an export or import base.

The Nigerian Ports Authority (NPA) has created 10 export processing terminals to facilitate cargo exports. In this report, OLUWAKEMI DAUDA looks at some of the steps that should be taken by the organisation and other agencies to make the terminals thrive.

The new 10 export processing terminals created by the Nigerian Ports Authority (NPA) to facilitate cargo export is a fulfilment of a dream of sorts.  The objective to boost the Federal Government’s revenue generation policy  and, ultimately, grow the economy.

The NPA  Managing Director,  Mohammed Bello-Koko, who broke the news at the Zenith Bank International Trade Seminar on non-oil export, noted that three out of the terminals would come on stream soon.

 

 What are non-oil exports?

Non-oil exports include manufactured  and agricultural products, services, solid minerals like tin, coal and columbite.

In Nigeria, growing exports, stakeholders said, especially non-oil products, such as cocoa beans, cashew nuts, rough wood, nitrogenous fertiliser, rubber, and cotton, has been a central part of the Federal Government’s policy for decades, but with little or no significant impact on job creation and the economy

 

Efforts of the banks on non-report

A bank has played a key role in financing various sectors, including the shipping.

The bank, maritime stakeholders admitted, is leveraging its vast experience in supporting trade businesses, especially in the Small andMedium Scale Enterprises (SMEs) and corporate business space to lend its expertise to drive discussions that will enable exporters to expand their export businesses and encourage new entrants into non-oil export industry.

For instance, the FirstBank, the former President, Association of Nigerian Licensed Customs Agents (ANCLA), Prince Olayiwola Shittu said, has an Export Desk to support exporters.

Also, the Central Bank of Nigeria (CBN), through some banks, has created awareness for the endowment in each region; open exports’ opportunities in these areas, in collaboration with experts; drive grassroots’ conversations with exporters to convert them to opportunities; help overcome export challenges inherent in these regions; kindle an awareness of the export potential for AfCFTA prevalent in the regions; and serve as a workshop to address concerns, challenges and solutions in the export business of the country.

 

What maritime stakeholders said

Stakeholders in the non-oil export sector agreed that it holds a lot of promise as a cash cow to boost the economy and provide jobs for the people.

But regrettably, Shittu and others said, the sector, has suffered setbacks based on inconsistency in government policies.

 

Impact of govt policy

“The Federal Government in its determination to drive growth in the non-oil sector has put in place certain policy frameworks such as the Export Expansion Grant (EEG) scheme, which operates under the legal context provided under the Export (Incentives and Miscellaneous Provisions) Act 1986.

“The policy which is a fiscal policy instrument is implemented under the guidelines issued by the Federal Ministry of Finance and enforced by the Nigerian Export Promotion Council (NEPC), the apex agency responsible for the administration of the policy, in conjunction with other key implementation agencies such as the CBN and Nigeria Customs.

“The grant is given to exporters to cushion the impact of infrastructural disadvantages faced by Nexporters and make our exports competitive in the international market.

“But the fund is only available to exporters who have repatriated the proceeds from their exports, which must be certified by the CBN,” Shittu said.

The expert, however, faults the policy because it doesn’t take care of the port operators and investors, farmers, miners and other critical stakeholders in the non-noil export project.

 

    What the NPA is ready to do:

According to Bello-Koko, NPA is addressing bottlenecks affecting export through  proper synergy between vessels that came into the country as well as records of the ones that left the ports.

“We are working with the government to ensure diversification of the economy and  encouraging non-oil exports. Also, not just about deploying the e-call-up system, we have licensed 10 export processing terminals.

“The terminals are supposed to be at locations whereby one stock, process, package, certify, seal and send it to the port. But for it to succeed, we need other government agencies. We need to understand that the port is a maritime ecosystem not just for the NPA but other government agencies.”

The NPA chief said further: “For the export processing terminals that were created, we expect the Nigeria Customs Service and Standards Organisation of Nigeria to have an export desk there for certification”.

NPA, he said, had deployed a truck electronic call-up system to ease the movement of export cargoes into the port.

Bello-Koko added that the NPA had created pregates where trucks would park before entering the port and barges were also introduced at a cost borne by the exporters, thereby, making export more expensive.

He explained that the terminal would reduce the burden in future. He called for the introduction of a National Single Window to ease the movement of cargoes.

“Automation is key to reducing congestion and will ensure quick processing of export and import documentations.  In the documentation, whether import or export, all starts with the consignee and the form is Form M and this has to do with port destination, loading and discharging.

“So, there is a need to have one form that serves everybody and that is the National Single Window where all transactions will be done, even payment.

“One bulk payment can be made and everybody is paid separately at the same time. This is obtainable in other neighbouring African countries and I believe we can do so here,” he said.

In addition, the NPA boss said the authority has also created a dedicated lane going into the port to fasttrack the movement of export boxes and give them a movement time belt.

“We understand the essence of export that is why we are working with the Nigerian Export Processing Council to integrate the dues with the new export processing terminals. We will also work with the exporters to see how this works in order to save a lot of time and reduce delays associated with export in Nigeria,” he added.

 

  Bad roads affecting export

The Managing Director, APM Terminals/WACT, Naved Zafar, blamed poor access roads to the port for the gridlock in the area.

According to him, the port cannot be efficient if there is no proper inland connectivity to the port.

Pointing out the role of infrastructural deficit at the Apapa Port, Bello-Koko said the traffic had become heavier until recently when the government expanded the Apapa Port road.

“At one point, we were having between 40,000 and 45,000 trucks into Apapa and Tin-Can Ports in a month, out of which about 15,000 trucks are for export. There must be a synergy between when the vessel comes within Nigeria’s shore, berths, offload the cargo and when it is inspected by Customs and other government agencies, and when it leaves the port. Any break-in that will create traffic,” he said.

 

 Port of export

The terminals will help exporters file the Electronic Export Information (EEI) in the Automated Export System (AES).

 

    Various initiatives by the CBN

Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, said they had introduced various initiatives and interventions that would harness the opportunities in the non-oil sector to create wealth for the country.

Emefiele added that the apex bank introduced rebate facilities to encourage exporters, and bridge gaps by providing funding for capital expenditure.

“We have the N500 billion non-oil stimulation facilitation, Commercial Agricultural Scheme Act for agricultural commodities and many others,” he said.

He advised Nigeria to look inwards for economic growth and development.

 

  Potential of non-oil sector

The non-oil export sector has deep agro-allied linkages made up of semi-processed and processed agricultural products such as cocoa, cashew, sesame seed, ginger, gum Arabic, shrimps, cotton and rubber. The country is also a major exporter of finished leather, which has direct linkage to the livestock growers.

Expectedly, the export sector had helped to boost the incomes of over 10 million farmers in rural areas.

A case is that during the global financial crisis, Nigeria’s non-oil sector not only soared high but also helped absorb the shock caused by sharp fall in oil revenues.

Giving an insight into the benefit of the non-oil sector, Dr. Gbadebo Odudaru, in his book, titled: “Nigeria-U.S. Trade Relations in the Non-Oil Sector”, says the country has received good earnings from the non-oil sector, a fact, made manifest in the rising Gross Domestic Product (GDP) growth.

“The Central Bank of Nigeria Economic report for the third quarter of 2007, was estimated at 6.05 per cent compared with 5.73 per cent in the second quarter. The growth was driven by major agriculture activities in the non-oil sector such as yam, Irish and sweet potatoes, groundnuts and maize, which was estimated at 9.47 per cent.”

 

 Investment profile of non-oil export

According to export market analysts, the growth in non-oil exports rose from $1 billion in 2006 to $2.3 billion in 2010, a development, they attributed to the favourable policy matrix of government made possible during Okonjo-Iweala’s first term as finance minister.

Other experts said the Bank of Industry’s (BoI) intervention in the sector might have also impacted positively.

 

 Market diversification

It’s interesting to observe how persistent efforts of exporting companies have led to the acceptance of their products in some of the highly quality conscious customers and markets.

 

Consider a few examples.

 

    Export goods

Nigerian products such as cocoa beans and butter, dried-split ginger, leather, woven sacks and technically specified rubber (TSR) are being exported to the US. Hibiscus flowers are also being exported to the United States.

The NEPC indicates that the EU accounts for 56 per cent market share of Nigeria’s non-oil exports, followed by the regional ECOWAS with 11 per cent share.

 

    Employment generation

There are over 200 exporting firms in Nigeria. CBN publishes the list of top 100 export companies. According to experts, the direct employment in the non-oil export companies is estimated at about 200,000 while indirect employment in the agriculture sector which gains from the market linkages provided by the exporting companies is estimated at over 1o million. A large cashew processing plant set up in Kwara State employs 1500 people, mostly rural women. The cashew kernels are processed and packed, direct for shipment to developed countries such as the U.S. and Europe.

 

    Cluster development

A very positive fall out of the non-oil export expansion has been the emergence of export processing clusters.Challawa industrial estate in Kano has emerged as a major export cluster with modern tanneries situated in this zone.

 

    Boosting foreign exchange earnings

Boosting export earnings becomes even more pertinent today in view of weakening exchange rate of Naira and shrinking foreign exchange reserves. According to a senior official of the Federal Ministry of Transportation, who does not want his name in print but familiar with the past export trends, “a positive feature of the CBN policy has been the tendency on the part of exporters to operate through official channels which compliments CBN efforts to discourage the unofficial forex market in the country.”

 

    Conclusion

The economy has had to navigate a major crisis that started with the collapse of oil prices in 2014 and was worsened by the high level of insecurity in the country.

The crisis of the past four years reaffirms the vulnerability of the Nigerian economy to oil related shocks. It underscores the need for Nigeria to look outward, diversifying its export base away from the volatile commodity if the country is to win its battles against poverty and insecurity.

Oil accounts for 90 per cent or more of Nigeria’s merchandise exports.This heavy dependence of the economy on oil as the dominant source of foreign exchange is widely acknowledged. But the mechanisms through which oil price changes affect the economy and the measures (or lack of them) available to the  authorities to counter oil price declines are less commonly understood.

We traced the impact of the recent price declines and considered what policy options were available to the Nigerian authorities to come up with counter measures.

The vulnerability of the economy to oil price shocks has been known for years, and the case for diversification has been made many times. Therefore, the development of a robust non-oil export base is, in all likelihood, no longer a policy choice, it is a growth imperative. To grow and develop over the long term, the country needs very rapid growth in non-oil exports through the nation’s sea ports.

In this report, OLUWAKEMI DAUDA looks at some of the problems that should be tackled by the Nigerian Ports Authority (NPA) and Nigerian Maritime Administration and Safety Agency (NIMASA) to achieve deep decarbonisation of the industry.

For the Nigerian Ports Authority (NPA) and Nigerian Maritime Administration and Safety Agency (NIMASA), collaboration is key to achieving deep decarbonisation, stakeholders have said.

Shipping companies, the stakeholders said, need to reduce emissions, while driving growth and profitability. “Nigeria can’t wait to act. We must utilise solutions in the market that can make an immediate environmental and financial impact if we are to, as a maritime nation, to afford the transition to clean fuels,” the former President, Association of Nigerian Licensed Customs Agents (ANLCA) Prince Olayiwola Shittu, said.

Decarbonisation, Shittu said, could be achieved through alternative fuels such as nuclear, hydrogen, ammonia, methanol and renewable energy sources (biofuels, wind, solar), the maturity of technologies (fuel cells, internal combustion engines) as well as technical and operational strategies to reduce fuel consumption for new ships (slow steaming, cleaning and coating, waste heat recovery, hull and propeller design.

Goals set by IMO on carbon intensity reduction

With the IMO adopted energy efficiency strategy on the reduction of Greenhouse Gas emissions from international shipping, the following goals have been set: Energy efficiency requirements or existing vessels from 2023; carbon intensity targets for vessels from 2026; reduction of carbon intensity by 40 per cent by 2030; and reduction of carbon intensity by 70 per cent by 2050 (50 per cent)

NPA and NIMASA, a lawyer Mr Oluwaseyi Muhammed, said, must come up with a strategy with the aim of providing support and assisting ship owners and operators “to achieve compliance with the new Efficiency Existing Ship Index (EEXI) Legislation, calculation of Carbon Intensity Indicator (CII) by investigating decarbonisation/efficiency technologies and operation changes for their vessels, ultimately, providing the best solution in terms reduction of EEXI & CII and return on investment (ROI)”.

Lessons from other countries

Few days ago, the French shipping giant CMA CGM Group and Maritime and Port Authority of Singapore (MPA) signed a memorandum of understanding (MoU) to collaborate on the development of capabilities and solutions across decarbonisation, digitalisation and innovation.

The MoU, findings have shown, seeks to explore the use of low carbon fuels and develop green technologies to accelerate maritime decarbonisation.

The partners are expected to work on the use of zero and low-carbon marine fuels such as e-methanol, e-methane and biofuels for commercial shipping. Research on technologies such as carbon capture solutions is another objective of the MOU.

As CMA CGM advances to be a net-zero carbon firm by 2050 diversifying its energy mix, the company ordered 10 dual-fuel liquefied natural gas-(LNG) powered vessels and six dual-fuel methanol-powered vessels. The methanol-powered newbuilds are planned to join the CMA CGM fleet in three years (2025).

Three of these LNG vessels, which will also be e-methane-ready, will be registered under the Singapore flag. The firm’s e-methane-ready fleet counts 29 vessels in service and will have 77 by 2026.

Moreover, the parties pledged to promote digitalisation and innovation in the maritime ecosystem for more efficient solutions.

Some of the areas on which the signatories will focus include cybersecurity and shipping, achieved through data exchanges for port and cargo documentation and reporting. The MoU would also see the two parties work together on innovations such as shipboard automation for more safety, efficiency and smarter solutions onboard vessels.

Furthermore, CMA CGM and MPA will explore establishing and investing in Singapore-based incubators and accelerators to grow Singapore-based marine tech startups.

Investigation has also shown that in line with its digitalisation agenda, CMA CGM has recently teamed up with PSA Corporation (PSA) to create and implement digital solutions relating to the company’s port and terminal handling activities in Singapore.

Under the MoU, will cooperate on new industry-wide initiatives to attract and empower the Singapore-based maritime workforce, tapping on the MPA Maritime Cluster Fund.

“Decarbonisation, digitalisation, and innovation are strategic priorities for CMA CGM and the entire shipping industry. Given Singapore’s key position in our global network, I am very pleased to sign this partnership with the Maritime and Port Authority. It will allow us to address the challenges ahead and strengthen our existing strong ties with Singapore,” Chairman/Chief Executive Officer, the CMA CGM Group, Rodolphe Saadé, reportedly said.

“We are happy to work with a like-minded partner like CMA CGM who shares our ambitions to make international shipping more sustainable and resilient,” Chief Executive, Maritime and Port Authority of Singapore, Quah Ley Hoon said.

The sector is crucial for international trade. About 90 per cent of the global trade occurs through shipping and that makes it vital to the world economy which Nigeria is a member.

Due to the scale of the sector, shipping represents three per cent of the total global greenhouse gas (GHG) emissions, therefore strict environmental regulations are set to cause major technological changes in the maritime industry.

For example, Liquefied Natural Gas (LNG) can improve the performance, and on the other hand, with methane slip, the benefits are reduced. Other fuels and/or other technologies such as biofuels, hydrogen, nuclear and carbon capture and storage (CCS) could all decarbonise the industry, but each have significant barriers regarding cost, resources and social acceptability.

In addition, fuel consumption can be improved by various efficiency improvements (such as hull design and cleaning, and propeller design, to name a few). It is obvious that numerous problems/issues must be tackled to achieve deep decarbonisation of the shipping industry.

Demand for shipping to grow

Moreover, demand for shipping is likely to grow over the next three decades. Investigation by The Nation has shown that to understand the market trends in the industry, NPA and NIMASA must consider decarbonisation as part of their business strategy in line with the International Maritime Organisation’s (IMO) ambition to reduce CO2 emissions by at least 50 per cent by 2050 compared with a 2008 baseline.

Financial incentives

Deep decarbonisation will require financial incentives and policies at the international regional and local level given the maritime sector’s three per cent contribution to GHG emissions.

Categories of maritime emission

Maritime emission and reduction measures are divided into two: technical (ship size, ship-port interface, etc.) and operational (lower-speeds, waste heat recovery, etc.)

The International Transport Forum recognises more routes to achieve decarbonisation, which is the use of alternative fuels (sustainable biofuels, hydrogen, ammonia), electrification of ships and wind assistance, albeit these could be argued to fall under the technical measures’ category.

Challenges

There has been increased interest from the sector’s important stakeholders on deep decarbonisation. However, this will require financial incentives and policies at an international and regional level given the maritime sector’s three per cent contribution to GHG emissions.

Shell and Deloitte, it was gathered, conducted a survey on the market trends and it was realised that the majority of the stakeholders considered decarbonisation an important or top priority for their organisations. This, therefore, shows that the market and the industry are considering decarbonisation as part of their business strategy.

What Maersk intends to do

Maersk, the world’s largest shipping container company, had announced its intentions to be net-zero carbon by 2050, with carbon-neutral vessels commercially viable by 2030.

The IMO has also introduced measures for new and existing ships (SEEMP, EEDI and the fairly recent EEXI), which combine operational and technical measures to help ship operators achieve reductions in emissions.

Advantages and disadvantages

The advantages and disadvantages of alternative fuels, in terms of cost, technical difficulties and maturity, were presented. Shell’s view on future pathways involves a “poly-fuel scenario”, in other words, the use of different fuels.

Also, Japan’s report on “Roadmap to Zero Emission from International Shipping” mentions that pilot concepts are based on two possible emission reduction pathways: LNG, provided that LNG transitions to carbon-recycled methane, and  adoption of hydrogen/ammonia as fuel.

Although stakeholders who spoke with The Nation agreed that hydrogen/ammonia fuels are solutions to a deep decarbonisation, “There are still issues to be resolved for them to be a commercially viable solution. Issues of storage, transportation, safety, toxicity and cost are the prime inhibitors for these alternative fuels. LNG is a very promising solution to achieve short-term decarbonisation, with ships deploying LNG (mostly as a drop-in-fuel, blended with existing fuels in marine sector).

“Biofuels look marginally more competitive than fuels derived from renewable electricity or from natural gas with carbon capture and storage. However, biofuels have challenges in terms of sustainability and availability. Thus, in the mid -long-term, they may be uncompetitive due to sustainability restrictions and price volatility. Because fuel price is the dominant factor that determines the total cost of operation, a fuel derived from natural gas or from a renewable energy source “may offer longer term benefits” compared to biofuels if the future growth in energy global demand and the aforementioned sustainability and availability issues of biofuels are taken into account,” said, an analyst, Mr Kayode Balogun, said.

Other stakeholder agreed that IMO’s targets will be achieved through a radical shift with the aid of social pressure, financial incentives and regulatory and legislative reforms at the local, regional and international levels.

The Nigerian Customs Service (NCS) last year commenced the verification of private jets’ data. In this interview with JOHN OFIKHENUA, its National Public Relations Officer (PRO), Timi Bomodi, promises that the service will sustain the exercise.

With the retention of seven per cent cost of collection, the service seems to be challenge-free. Or do you still have any challenge?

There is no system that is without challenges. Of course, there will be challenges. Yes, the seven per cent collection even though it has added to the internal revenue of the service, it is still not enough because there are so many things that are required to have a system that will work at a very high capacity.

I will tell you that the management has engaged in serious acquisition and building of infrastructure for officers. You know, if you look across the country’s most military establishments, you will find that they consider the residential accommodation of their personnel  a priority. We are seriously handicapped in that area and that is why this management has made the effort to improve the living conditions of officers.

We are talking also of about the health needs of our officers and men, provision of hospitals and clinics, supplies for those hospitals and clinics, even the working equipment, and the working tools.

The service recently acquired certain specialised vehicles that could be used in very rugged terrain and the reinforcement for those vehicles are not just like the normal reinforcements because in most border locations, it is almost like a war environment and if your personnel are not well equipped, then they will be coming out mainly as casualties of war.

So, if you have to arm them properly, protect them adequately and then ensure that when they are in those kinds of combat situations they don’t end up as victims, they end up as victors because it is a fight that we believe we can win and we should win in a short and long term.

Will the Customs want that seven per cent increased?

There is nobody that would say no. Even though the government has ceded a lot in giving seven per cent cost of collection to the service, we know it can increase if we increase our capacity to work. Because that is a component of what we will collect. So, that is why you see that we are intensifying to always putting more effort and see that what we did last year, we do better this year.

We know once it gets better for the country, it will also get better for us. We are very optimistic as to how we can do that, especially with the introduction of this concession agreement.  We anticipate an increase in revenue that could be if not geometric but arithmetic. And in that case, we also know that the seven per cent cost of collection will also go up so long as that is achieved.

About two weeks ago, the concession of the modernisation project agreement was signed. What results have it yielded?

The modernisation agreement as you are aware of was recently signed between the Nigerian Customs Service and an indigenous company, Trade Modernisation Project Limited. The purpose of the agreement is to expand the ICT infrastructure of the NSC and automate fully its processes and procedures. As you may be aware, our processes are tied to not just imports and exports excise, and border control management.

Our responsibilities are very broad and the capacity to effectively perform these activities is greatly enhanced. We believe it will be greatly enhanced by technology. And that is why this concession agreement was signed. We know that as a Customs Service, we can’t do it alone. We have to bring in partners who could midwife the process, and that is where Trade Modernisation Project Limited came in. And they also came in with technical partners.The main one being Huawei, one of the leading providers of hardware and software in the ICT industry.

We know that they have the technical capabilities to help drive this system. And of course the project is financed by another consortium, which is African Finance Corporation, who are ready to provide the huge amount needed to bring this project to reality.

So, that is what’s happening, and we expect that at the end of the day Nigerians will be happier for it because we are talking about enhanced systems, making our operations more competitive.

You know, we are not just competing,we are not competing with anyone within the country, and with other countries.

The more efficient your system, the lower the cost of doing business in our environment and once the cost doing business goes down, we will be able to attract more foreign direct investments. And once you are able to attract more foreign direct investments, it means that your economy will grow and as the economy grows, the potential for any revenue for the government will also grow and that is what this whole thing is about. That is what we expect to see, which primarily informed the CGC’s comments on the day that the agreement was signed. That we expect that the revenue will go up once we begin to implement the agreement in the phases that they were designed to be implemented.

 Has the implementation of the agreement commenced?

It has not commenced, but we are phasing it. We will start with the phase of migration, from a platform that we are using, which is the Nigerian Integrated Custom Information System and we will be moving gradually to seeing how our partners can form in with an infrastructure that can accommodate our infrastructure and begin to build, expand the scope to other areas of customs.

The day that event was held, the CGC said the Nigerian Customs is short staffed; it lacks half of the manpower it needs. It needs about 30,000 while it has about 15,000.

What is the service doing about it?

Of course, you know the service does periodic evaluation, a periodic performance evaluation and part of what that entails is that it has to look within and assess the kind of assets that are available to it to carry out its duties. And you know a critical component of the assets available to any organisation is the manpower.

So, the service has done its forecast in terms of manpower placements and with those forecasts it is able to know that yes, we are at a certain number. But for us to operate effectively and efficiently, we have to operate at a certain capacity, and that is what informed the CGC’s comments. We do know, you know, initially there were two fears expressed; one was that this agreement was going to take over the jobs of the Nigerian Customs Service. Or we are outsourcing the activities of the Nigerian Customs to others? But it is not true; we are not doing that.

The next fear was that it will lead to job loss, and the CGC also allayed those fears. It will actually require more people because once you have a technology, what the technology does is it simply makes the system more efficient but you need certain level of interrogation which requires the manpower aspect. At the borders, we actually need more persons than we have in our employment. At the ports once we introduce these technological instruments that this concession agreement will require, we need people that will be there to monitor them.

I mean, we anticipate a future where people will be conducting examinations in the ports in Lagos and there are people at the headquarters level who can see these examinations and draw their conclusions, write their reports. It is just to create levels of checks that will make the system work efficiently, reduce leakages in the system and ensure transparency across board. So, of course more persons will be needed and we expect that as we begin to introduce the other phases of this concession agreement more persons will be brought onto the service and take care of this assignment.

As you also know, we have just concluded a computer-based test for new employees. It is a continuation of what was started in 2019, and this is the second batch of persons that are going to be recruited under that particular assignment. And we expect that as this new employees come into the system, they will be assigned responsibilities that are best fit for what the service intends to implement in the short and long term.

 It is obvious that for your officers to key into this automation, they must be IT compliant. What is the service doing about IT training?

The service has a very robust modernisation and ICT unit. If you go to the department, not just here but across the country, we have young, highly trained, very articulate officers who have proved their mettle in that department. As a matter of fact, many of them have won international and local awards in their contributions to enhancing the effectiveness and efficiency of the system. And we are not resting on our oars. We are actually expanding the unit even more by introducing newer elements, which requires even larger engagements of individuals with those kinds of trainings and capacity. Of course, in this ongoing recruitment there has been a lot of emphasis on having an enlarged ICT modernisation department and bringing in persons with those kinds of skills that are highly useful in using the kind of technology we will be deploying in the very near future.

Last year, the Nigerian Customs Service conducted a verification for private jets in the country. We did not hear the outcome of the verification. I want to know if it is a one off exercise.

Of course, it is not a one off exercise. We started that verification and you know most things we do take time. If not for anything, but for record purposes, it is a very vital exercise because we want to know just the way when you bring in a vehicle into the country you have the vehicle registered and all the data concerning that vehicle is captured somewhere. Periodically, if there are certain payments of taxes that are necessary for the owners of these vehicles to do for the government.

Of course, the system, which is an automated system is alerting the owner to do that. So, the same thing is with high networth individuals in types of jets, helicopters wherever there is a requirement as to their rules and procedures the importation and use of types of assets within the country. And that is what we are trying to do, which is first document those who have these high vehicles, airplanes and then see also if they have been up and doing in terms of their obligations to government. Those that have not, we have put the notices across to them. A good number of them have made payments to the government. It is an exercise that is ongoing. It is the one that the service will sustain in the long term for the purpose of data gathering and for collecting revenue that are accruable to the government.

Last year, the NCS launched some boats for marine operations. How have these equipment improved the operations of the service?

As I said, the thinking of Nigeria Customs management is to deploy its assets in such a way we can get maximum returns on them and the areas of revenue collections, trade facilitation or enforcement. And the deployment of boat as asset in the marine environment has actually yielded a lot of benefits. If you look at the reports from all our marine units in recent times, you see the high volume of seizures than had been made in all our marine units. This is not to say there cannot be improvement but when you introduce anything new you also have to incorporate the training aspect into it. It is the same thing like when you introduce a new asset like a phone. You do not only need to train the person that will run it but you need to have a better understanding of the terrain under which those boats will operate. It is very important we use equipment that can operate efficiently on shallow waters. If you are used to that and, suddenly, you are given heavier equipment that would not operate heavily in certain kinds of water, then you have to be sure that the navigational skills of the people you are handing these equipment over to are top notch.

Otherwise instead of deploying for effectiveness you may be with certain challenges that will actually affect the productivity of the equipment.

So training is ongoing. You have different aspects of the training that have to do with equipment handling and navigation, maintenance and so many other things. And the service is Keen on approaching this whole process holistically. That is why you see beyond the seizures that are made by our marine commands, the issue of deployment, which we are taking our time to see, especially for high end and for high value assets of the service.

Have there been any seizures of petroleum products using the boats?

Virtually, daily where there are hoard of petroleum products. In short, one of the major challenges is having enough space to warehouse items that are seized in the cause of enforcing duties. For petroleum products, the issue is the volatility of the product itself. So, when seizures are made the service cannot warehouse. You normally warehouse rice and other commodities we have to dispose of them as quickly as possible. Yes, of course, there has been remarkable success in checkmating the activities of those whose intentions is to smuggle this product out of the country.

What was the revenue collection for May, this year?

I cannot readily give you that number now but what I can say is that we have the annual projections, which if you check the historical trajectory of revenue collections in the service you will see there is a steady increase in the volume of revenue that the service collects. Last year, we collected over N2 trillion, which was remarkable giving the circumstances under which we operated within that period. For this year, the expectations are also very higher and we are working towards achieving that in a year that is considered to be low traffic. We are gradually picking up our pace and we know, hopefully, before the end of the year are likely going to meet the target set for us by the government if not exceed it.

Has the Nigerian Customs Service jettisoned its automated auction scheme? If it has not, what is the update because one has not heard anything about it?

As you said, it is automated. If you go on the Customs website, there is a link e-service. It is the link that handles our aspects of those activities. Auctions are ongoing activities and because they are ongoing they have to be set up in such away, so that in a certain period that the items put up for auction are accessible to the public. So, if you go to the website and click the link, you will see the various things that the individuals users of that website are required to do. They are required to have a tax ID number. They are required to register on the site, create a wallet and fund it. There are so many requirements and they are clearly spelt out there. Once items are populated on that portal that will be auctioned then persons will go in there and look at the items that they may want to bid.

So, it is a very transparent system that is designed to eliminate the subjective consideration of an individual so that whoever is fortunate enough to win a bid for an item can have it.

What is the payable Customs vehicle duty?

As you know, the duty paid on vehicles either used or not, the duty payable is 20 per cent. And we have a component that is referred to as import adjustment tax of 15 per cent. So, the duty itself is 20 per cent that goes for used and new vehicles.

How compliant are the dealers?

We had a lot of challenges, especially in the areas of importation of vehicles. We know that our borders giving their very nature have been largely exploited by smugglers, who insist on following those borders just to evade the payments of duty. That is one of the reasons we introduce our automation system – valuation protocol. What it does is to make the system for people to use with ease to get their goods out of the ports. So far, we have been getting positive results from stakeholders: clearing agents and motor dealers and other members of the public because it is a fair, efficient and fast way of clearing goods out of the ports.

Does smuggling still thrive?

Of course, smuggling thrives and it is not unique to Nigeria, there is no country in the world that has been able to eliminate smuggling. I mean the biggest countries in the world with their technology and everything has not been able to eliminate smuggling.

The intention of every customs administration will be to reduce it to the barest minimum. And that is what I told you earlier about the concession agreement which allows for an expansion of infrastructure that will assist Customs officers with their jobs. Like in this case, we know that an area where we are having serious challenges in manning our borders, we do that physically using intelligence, using the kind of assets that we have but there are serious limitations. By the time you introduce technology, and you are able to get information either from aerial surveillance equipment like drones, satellite imaging, geo- spartial and those things, you will have more detailed information, it becomes a lot more easier to combat smuggling.

So, we anticipate that when this technology is introduced into the system, we, like other advanced customs administration, would have been able to bring smuggling to its barest minimum. And we eagerly look forward to that time when this will be achieved.

What fuels smuggling in Nigeria?

You can’t really put your finger on what fuels it. There are people that feel they smuggle just because they feel that there are benefits to be derived from it. Every time there seems to be some form of economic advantage that can be gained across the border, people tend to want to exploit the loopholes in the system to make those benefits. And you find that in virtually all industries once there are differentials in pricing that exist between one area and another there will always be people that would want to exploit it for economic gains, and so we have that.

So, we also have situations in a lot of our border communities, which, unfortunately, most of them are lacking in certain basic infrastructure, and when they lack in these infrastructure and there seem not to be some kind of recourse to economic empowerment, most of them tend to engage in self-help and the easiest thing that they do is use the borders in such a way that they can achieve some form of economic power by using their unique positions for criminal activities.

It is very enticing as I must say, because where the infrastructure does not exist people tend to be like, they tend to feel entitled and to say this is where we are, and we should benefit from where we are, simply by being dwellers of border towns, villages. That is what we have experienced. And that is why the service has taken it upon itself to engage border communities, different sensitisation, and social responsibility programmes as well as youth engagements and empowerment. So,  just to tell them that the implications of smuggling will be to the economy of the nation, not just the economy but the security of the people themselves. Our experience in the Northeast especially, you might think there is something to gain economically but if you lose the control of movement of individuals or certain kinds of items through our communities, then we may also have to live with the consequences.

In this case, it means having terrorists among us which will compromise the safety and well-being of individuals that live in those communities. So, we try to educate them about the implications of allowing their communities to be used as transit points by smugglers, and other potential invaders, and some of them have been quite helpful. It is a process that has to be continued for us to sustain the kind of progress we have made. And hopefully, we believe that we would get them to buy into the fiscal policies of the government and the reason things need to be done properly because, ultimately, they too will benefit from that.

Following the decision of the management of the Nigerian Maritime Administration and Safety Agency (NIMASA) to validate its wreck removal exercise, The Nation has toured Lagos waterways – from Marina to Apapa, Ijegun Egba in Ajeromi Ifelodu Local Government Area and Badagry – to examine the state of the navigational route and how secure the two ports responsible for over 80 per cent of cargoes coming into the country are based on the danger and benefits of ship wrecks on the waterways. OLUWAKEMI DAUDA reports.

Despite the enormous responsibilities on its shoulders, the Nigerian Maritime Administration and Safety Agency (NIMASA) has embarked on a major task: To remove wrecks from our seaways.

This is not unexpected. The body is charged with ensuring the safety of navigation in line with the Wreck Removal Convention adopted at the International Maritime Organisation (IMO) conference in Nairobi, Kenya in 2007, which came force on April 14, 2015.

Nigeria was the eighth country to ratify the convention.

Investigation has shown that no fewer than 35 ship wrecks and vessels have been abandoned on Lagos waters by some shipping firms and individuals.

The wrecks, derelicts and abandoned vessels’ litter the waterways and are being removed by NIMASA to stem criminalities on the territorial waters and around the port.

During a tour of Lagos by The Nation, it was discovered that the back of Tin Can Island port in Lagos has become a dumping ground for shipwrecks and abandoned vessels. The people of Ogogoro Village at back of the port and along the coastline said these were making their lives miserable.

The two Lagos ports are responsible for the highest concentration of shipping traffic to country.

Findings show that before the efforts by NIMASA, the abandoned vessels serve as storage  for stolen oil as well as shelter for criminal activities.

Safety and security of shipping business

NIMASA said it had warned owners of abandoned ships/vessels to remove them or face sanctions, which range from forfeiture or removal by the agency at the owner’s expense.

Deploying magnetometer

NIMASA said it had started preparatory works to deploy high-resolution magnetometer to validate the removal of the wrecks along the Badagry Creeks in Lagos.

Its Director-General, Dr Bashir Jamoh, who stated this during a review session on the wreck removal, also said the impact of the exercise on the marine environment was being assessed by the agency.

“We shall also conduct a full bottom sweeping operation by deploying sonar imagery system to establish any natural or artificial obstacles lying on the seabed within the area of survey for this phase of the wreck removal exercise. NIMASA is also taking into consideration, the impact of the entire operations on the marine environment to ensure safety of marine lives. We are monitoring the entire exercise to guarantee total removal of all identified wrecks,” he said.

Submerged barges removed

Among those removed are a submerged barge, which was lying over 10 meters deep along the Badagry channel on coordinates 711006.1 Easting and 535294.9 Northing.

NIMASA said it has also removed two others beneath the water at 530924.9 Northing and 710608.3 Easting.

Another submerged barge, which has been lying along the channels on 711617.5 Easting and 533601.6 Northing has been removed and taken to the dumpsite in Kirikiri, Lagos.

Collaboration with Navy

NIMASA had worked with the Hydrography Department of the Nigerian Navy to identify these wrecks.

“We worked with the Hydrography Unit of the Nigerian Navy in charting the waters and establishing these wrecks as critical for immediate removal. Some are completely submerged while others are partially submerged. This Badagry creek is a commercial route with passenger vessels plying and we place a premium on safety of lives and properties. We are confident that on completion, operations of the Navy in patrolling our waters will also be enhanced as the routes will be free of wrecks,” the DG also said.

Jamoh told The Nation that it was instructive to ensure that our waters remained safe for navigation.

He, therefore, warned that abandoned ships on the territorial waters would be declared as wrecks and the agency would ensure that nothing impeded safe navigation in the country’s waters by removing them.

“In line with our mandate on the protection of the marine environment and safety of navigation within waters and our powers as the receiver of wrecks; owners of all abandoned ships, vessels and derelicts are sternly warned to seek removal plan permits from the agency and ensure the removal of these wrecks and derelicts from our waters and failure of which would attract appropriate sanction,” he said.

He reeled out the sanctions to include removal of such wrecks at the owners’ expense as well as forfeiture of the vessels.

He stated that the agency is empowered to do so in line with the powers vested in it by the Merchant Shipping Act 2007 and other enabling Acts and International Maritime Organisation (IMO) instruments.

The Nairobi International Convention on the Removal of Wrecks (Nairobi Convention 2007) gives states the authority to remove wrecks. In the case of Nigeria, NIMASA is the receiver of wrecks.

A resident of Ogogoro village, Mr. John Edward, said the areas most affected are Tin Can Island, Kirikiri, Navy Town and Badagry creek areas of the channel.

According to him, the community has identified over 80 of such abandoned ships and wrecks, which were submerged along the busy Lagos channel,thereby constituting grave danger to ships and crew.

“The hazards associated with the wrecks are that, most often, especially during high water, they are submerged and hardly visible to boat operators; therefore, they pose the greatest threats during rainy season that is fast approaching.

“Apart from endangering shipping, most of the abandoned vessels also constitute environmental pollution and hazards,” he said.

Another resident of Imore, Mr Gbenga Owolabi, said the government has the responsibility to remove the wrecks.

“It does not portray our port well. It also does not show that as a country within the global shipping community, there is respect for law and order.

“In addition to these injury, there are navigational aids such as the boyle, markings, light that are not functional, missing or have shifted from their original positions based on the abandoned ships that needed to be fixed by the relevant government agencies.

“The absence of navigational aids also constitutes risk to shipping, especially at night or during restricted visibilities.

‘’We are hoping that actions would be taken to clear our channel of those abandoned vessels so that patrol ships can easily move in and out of harbour to respond to emergencies,” he said.

Edward and Owolabi are not alone. A senior official of the Nigerian Ports Authority (NPA), who craved anonymity, also admitted that the Lagos coastline is littered with abandoned vessels and shipwrecks.The official said some of the abandoned vessels had been there for over three years, adding that they were being blamed for erosion that threaten homes and livelihoods of the people living in the riverine community.

“They said the waves have eaten into their land at a rate of up to 20 miles a month. Because the ship is such a solid object being where it shouldn’t be, they said it causes an impediment to the natural flow of the current and stops sedimentation.

“Worse still is that it causes these eddy currents that immediately start to chew up the entire shoreline.

“It is terrifying when you listen to people living in those communities. In fact, at night, they complain that they don’t sleep because they are always thinking that the water could come in at any moment during the rainy season. The problem has been there for more than two years and it is caused by the abandoned ships,” he said.

He said dismantling ships had become more complicated the longer they stay on the beach and blamed NIMASA for the number of wrecks and abandoned vessels on Lagos water.

“NIMASA is is responsible for the quality of ship that operates in Nigeria’s waters.The agency should take action to remove the abandoned vessels,” he said.

He said though NIMASA could not be blamed because most of these abandoned ships are owned by foreigners.“Foreigners are deliberately violating our laws and NIMASA needs to follow due process in removing these wrecks and abandoned ships because of litigation,” he added.

Ship owners’ responsibility

Under maritime law, it is the responsibility of the ship owner to remove their faulty vessel from the coast.

But with many of the vessels having been bought cheap and barely seaworthy to work in the oil industry, when trouble strikes, they are often abandoned mostly when the owner gets to know that they are no longer serviceable.

Experts said the abandoned ships act as groynes, halting the flow of sand down the shoreline and accelerating erosion.

Lack of regulation?

An expert, Mr. Roland Samuel, said lack of regulation on the waters has also helped illicit activity thrive, turning the abandoned ships into hideouts for sea criminals.

“Copper and bronze and the brass from the ship’s propeller could be sold for as much as N20 million. People steal valuables that are still there because they are abandoned.

“Section 381(1) of the Merchant Shipping Act 2007 empowers NIMASA on what to do.

The Act has made it the duty of the receiver of wreck to remove or destroy the whole or any part of the vessel when abandoned.

The implication of abandoned wreck is dangerous for the water and the environment considering that they are on the navigational routes.

Floods and erosion are imminent in Lagos communities if they are not removed before the rainy season sets in, an expert warned.

Parts of the duties as a member of IMO are to ensure the protection of the maritime environment and its security, among others.

Therefore, it is important for NIMASA to clear the navigational channels of abandoned vessels that are hazardous to safe navigation.

Challenges

According to Jamoh, “one of the challenges the maritime industry has always faced is the issue of wrecks and relics in waterways – creeks, tributaries, rivers, canals, the high seas, or any route through which vessels of any size must pass to carry out day-to-day seaborne trade.

“Some of the maritime accidents that occur in different parts of the world are traceable to wrecks that litter the waters. If such accidents do not involve human casualties, they come with huge costs to businesses or both.

“There are basically three major consequences of wrecks on maritime transportation. Wrecks