Nigerian Maritime Administration and Safety Agency (NIMASA) Director-General Dr. Dakuku Peterside has stressed the need for blue economy to harness the nation’s huge resources in the seas and oceans, Maritime Correspondent OLUWAKEMI DAUDA writes.
To the Nigerian Maritime Administration and Safety Agency (NIMASA) Director-General, Dr Dakuku Peterside, promotion of what he calls the blue economy is the way to go to boost revenue.
Speaking at the African Day of the Seas and Oceans in Lagos, last week, Peterside urged stakeholders to harness the potential of the blue economy to create jobs and wealth.
The blue economy is a marine-based sustainable, visionary economic developmental process, which leads to improved human well-being, through sound management of marine resources.
It involves meticulous planning aimed at evolving policies capable of invigorating and crystallising mental concept into pragmatic economic realities.
Nigeria, through NIMASA, has latched on to this idea, by adopting, enacting and ‘domesticating’ the concept, to enforce a positive turn-around of the economy, beginning from the maritime subsector.
Nigeria may not be the first country to adopt the blue economy. But, it is, nonetheless, inspiring that every country that adopted the concept and implemented it, positively impacted on its citizens, particu-larly its youths, in terms of employment.
India as a case study
India, for instance, while adopting it, also anchored it to a 10-year vision, which targeted 100 innovations for creating 100 million jobs.
To India in 2010, it was: “The blue economy: 10 years, 100 innova-tions, 100 million jobs”and it, ultimately, fuelled the country’s march into economic prominence.
It is, therefore, exciting that Nigeria, through NIMASA, being inspired by Peterside, has decided to re-engineer its management, by repositioning the mental and philosophical base on an inverted pyramidal concept capable of leading the nation to a new dawn.
Three-prong approach
NIMASA helmsman has begun with a three-prong approach. First, he has obtained a tax-relief regime for shipowners through the Central Bank of Nigeria (CBN). With this incentive, indigenous shipowners can acquire new ships for their trade and gradually build up their fleet at low cost.
Secondly, the agency is working with the Nigerian National Petroleum Corporation (NNPC) to ensure that shipowners are given the enablement to participate in freighting the nation’s crude. Practice makes perfect. It, therefore, implies, that once the country could participate in carrying its crude no matter how little, it would soon evolve into a fleet that would be enviable.
Thirdly, the agency is also collaborating with the Nigerian Local Content Development Board (NLCDB) to implement the NLCDB Act, which prescribes a fixed percent of indigenous participation, in the economic activities of the oil and gas industry.
The three-prong strategy, working in a pyramidal form, stakeholders said,should, therefore, enable anyone with Cost Insurance and Freight (CIF) foresight generate enough latitude, economic heat, and industry activities, which the insurance stakeholders and underwriters can latch unto, as well as the maritime lawyers, on sustainable layers of ancillary participations, capable of igniting a turnaround to wipe off unemployment.
Thus, viewed more concisely, operators said that by the time the shipowners are unbundled and invigorated by growing economic activities; not only being able to participate in crude afreightment, but also empowered to acquire more ships, some of which, this time around, would be tankers, not only would the challenges of cadets sea-time be technically overtaken, the chances that inflow of hard currency into Nigeria would surge on an unprecedented scale, thereby eroding the bases for piracy and other social miscreants.
Succinctly, NIMASA’s dream, and which every stakeholder, as well as the government should support, is the development and integration of ocean economy development, through the principles of social inclusion, environmental sustainabi-lity, innovation, and then, linking other industries as a pragmatic and dynamic business model. It goes beyond mining for export; it transcends the boarders of oil and gas; and it also accommodates the human elements, because it fuels capacity building and expertise promotions.
This move and the new innovation by NIMASA, stakeholders said, is commendable in view of many years of wastage despite the vintage position of the country, bounded in the South by the Atlantic Ocean with a coast line of about 850 kilometres. It is also traversed by a myriad of river system, which provide about 4000 kilometres of navigable inland waterways, covering an estimated area of 199,580 km. Hence, with a total landmark of 923,415 km square waterways, it actually covers 21.6 per cent of the entire country.
Hitherto, the quantum of infrastructure required to harness resources in this economy has been a challenge. The blue economy involves marine transportation and exploitation of living and non-living resources in the maritime environment. All these can be categorised into marine transportation, living marine resources (fishes), port services, ship repairs and ship building and non- living marine resource (oil and gas).
These can be extended to cover towage, salvage, passenger ferry services, dredging and cargo trade, be it liquid bulk, dry bulk and general cargo (feeder and inland transport). There are also other services, such as maritime auxiliary (freight forwarding, storage and warehousing, maritime agency container depot, marine insurance and training school for skill acquisition
A study conducted about six years ago by a Federal Government committee on the maritime trade revealed that maritime trade significantly constitutes 80 per cent of global trade by weight and that 90 per cent of Nigerian-generated trade come by sea with very limited indigenous participation, leading to enormous capital flight in excess of N1.5 trillion yearly. These exclude expatriates estimated at N600 billion yearly going by the report of the National Content Development and Management Board (NCDMB).
According to UNCTAD report in 2008 and 2009, exports from Nigeria were $80.1 billion and N49 billion as the goods were carried on FoB, whereas imports to Nigeria stood at $942.3 billion and 33.9 billion and these were carried on CIF. Evidently, the economy lost the maritime insurance and freight elements of both our export and import trade worth $122.4 billion in 2008 and $82.9 billion in 2009.
The estimated total loss to the economy, in terms of capital flight based on the study, is huge and was in excess of $14.60 billion in 2008 and $10.38 billion for 2009 and when considered over the years, the amount becomes mind boggling
Every activity in the blue economy is a potential job and wealth creator, if all resources are well harnessed.
From the foregoing, it is obvious that the nation’s loss could be its gain, if well-articulated policies are put in place to change the trade policy from Free On Board (FoB) to Cost Insurance and Freight (CIF) for Nigerians to participate in maritime transport to earn what was once lost to foreign insurance and capital flight.
The economy could generate about five million jobs, either directly or indirectly. The Jones Act of the United States has created more than 35,000 indigenous vessels carrying more than one billion tons of cargo and over 100 million passengers yearly. These fleet generate almost 125,000 jobs, 80,000 of which are aboard vessels and represent a $26 billion private sector investment in vessel and infrastructure.
According to the Federal Government Committee report earlier referred to, five million jobs meant for the youths were lost to foreigners in the last few years, due to the deprivation of indigenous ship-owners in the maritime transportation.
“The sale of Nigerian crude at FoB negates Nigerian maritime insurance policy, which domesticates insurance of imports and exports. By this, Nigeria is losing N15billion or $101 million annually. It was further observed that out of the 457 vessels working in the upstream, where some vessels earn $85,000 a day, year in year out, Nigerian ownership account for less than eight per cent, which is far less than 60 percent to 90 per cent for trans-portation and shipping provisions, in the Nigeria content Act,” the committee regretted.
Findings revealed that apart from the non-participation of Nigerian-owned vessels in maritime transport, the 457 foreign vessels in the Nigerian waters, have foreign crew members when our youths are roaming the streets, including professional mariners, who have been excluded, because of lack of sea-time experience.
The reasons for all these are not far-fetched. The absence of a national maritime strategy has not allowed for a focused and sustainable maritime development into which the indigenous operators can tap in, coupled with the lack of maritime technical development policy to encourage participation of indigenous ship owners and operators as envisaged in the Cabotage Act of 2003.
The crude oil sales on FoB are based on government policy, which the NNPC complies with. Stake-holders said, the situation can, however, change, if a new policy directs the NNPC to contract the crude oil sales on CIF, in line with what obtains worldwide and, if Nigerians would be willing to give its wealth creation policy another push.
This, it was gathered, becomes necessary in view of the fact that NNPC exports 2.5 million barrels per day and imports 12 billion litres of refined petroleum products yearly and these cargoes are carried by foreign vessels as the trade policy had, before long, excluded Nigerian-owned vessels from the lucrative trade, hence the loss of revenue and insurance to foreigners.
This, findings revealed, is contrary to the provisions of the Nigerian Content Development Act 2010, which prescribed that 90 percent of very large crude carriers and other vessels within the nation’s coastal waters should belong to indigenous operators who should also enjoy the right of first refusal by contracting agency NNPC as it is practised in many maritime nationsmany of the indigenous shipping firms have not been able to attract necessary funds to purchase goods and quality ships coupled with their inability to sign technical agreement with international companies. So, they continue to trade with their old and low quality vessels, which has led to low patronage by the contract-awarding agencies.
In countries with blue economies, findings revealed that their sovereignty had largely been protected as noticed in the United States during the Tsunami incident, where many of the indigenous fleet were mobilised to save lives and property. Other countries have also attested to the economic benefit of their blue sea development. George Bush, former American President in 2002 national maritime Day speech, noted that America emphasises the important of local shipping activities to the nation’s economic wellbeing and national defence capabilities. The Brazilians maritime policy saw the evolution of its merchant fleet from 500,000grt in 1970 to 3,500grt in 2000 while the volume of cargo in their international trade leaped from 31 million tons in 1994 to nearly 67 million tons in 2000.
In Nigeria, the story is negative, hence the campaign by the NIMASA for the development of the blue economy.
