The Nation Newspaper

Tag: Cabotage

  • NIMASA: Cabotage’ll create jobs

    NIMASA: Cabotage’ll create jobs

    The Director-General, Nigerian Maritime Administration and Safety Agency (NIMASA), Patrick Akpobolokemi, has said the agency was committed to providing employment for Nigerians through the Cabotage Law.

    Speaking with The Nation, the NIMASA boss said the agency’s investment in seafarers’training and facilitation of the establishment of institutes of maritime studies in four universities were indications of its commitment to building capacity for the industry.

    Akpobolokemi appealed to stakeholders to encourage youths to seek careers at sea.

    He said: “The overwhelming interest showed by youths in seafaring calls for support from stakeholders in the maritime sector to assist in capacity development, especially in onboard training.

    “We, at NIMASA, have been placing cadets’ onboard Cabotage vessels as part of mandatory requirements for obtaining their Competency Certificates.”

    He described the submission of Nigeria’s instrument of ratification of the Maritime Labour Convention 2006 to the International Labour Organisation (ILO) as an indication to his agency’s commitment to the welfare of seafarers.

     

  • Six applicants to benefit from N30b Cabotage fund

    The Nigerian Maritime Administration and Safety Agency (NIMASA) is set to disburse the over N30.55 billion Cabotage Vessel Financing Fund (CVFF), The Nation has learnt.

    Investigation revealed that six indigenous firms were selected from the 92 that applied after scaling the hurdles by both the government and banks. The six firms have received ministerial approval to get the fund.

    Sources at the Federal Ministry of Transport said NIMASA has received ministerial green light to disburse the fund to the first set of six operators while officials of the ministry and NIMASA have worked out the modalities for the disbursement of the fund.

    A senior official at the Ministry of Transport, who craved anonymity, said the fund has accumulated to over N40 billion which may be disbursed before the end of the month or early July.

    The fund was generated from the three per cent levy on cabotage operations collected by NIMASA and would be disbursed to assist in enlarging cargo business to carry goods generated by the international water-borne trade.

    The Cabotage Act 2003 was designed to develop local capacity and grow the indigenous shipping industry. The Act established the CVFF to help increase indigenous tonnage operation in the domestic water transportation and grow local ship building and repairs.

    NIMASA, sources said, has, therefore, alerted the commercial banks warehousing the funds to get ready for the disbursement.

    The Director-General of the agency, Mr Patrick Akpobolokemi, NIMASA sources said, is doing everything possible to enable legitimate beneficiaries to have access to the fund soon.

    The Minister of Transport, Senator Idris Umar, the source said, has been assisting NIMASA on the take-off of the disbursement.

    The source denied the allegation that ministry officials are frustrating the disbursement of the fund.

    NIMASA has directed the banks to determine the amount that has accrued to each of them since the money was deposited with them to get their counterpart funding.

    The four Primary Lending Institutions (PLIs) are Sterling Bank. , Fidelity Bank, Skye Bank and Diamond Bank.

     

     

     

     

     

     

  • Cabotage sabotage?

    Cabotage sabotage?

    • This is a matter for the National A

    Given the parlous state of Nigeria’s maritime sector and its inability to maximise its full potential for the benefit of the country’s economy, it is shocking that over N40 billion ($525 million) of the Cabotage Vessel Financing Fund (CVFF) is reportedly trapped in designated banks rather than being utilised for the purpose for which it was set up. Established under the Coastal and Internal Shipping Act of 2003, the CVFF is meant to assist indigenous shipping firms to acquire the capacity to compete with and overcome foreign domination of coastal and in-land trade in the country.

    The fund is derived from a deduction by the Nigerian Maritime Administration and Security Agency (NIMASA) of two per cent from all contracts awarded under the cabotage regime. NIMASA reportedly deposited the funds with designated banks on the agreement that indigenous firms seeking to purchase vessels would be supported by the agency to the tune of 55 percent, the participating banks would contribute 35 percent while the respective firms would bear 15 percent of the cost at an interest rate of 5.6 percent. For some inexplicable reason, the participating banks have reportedly developed cold feet, refusing to fulfil their own part of the bargain, with the consequence that the fund lies idle as the targeted beneficiaries cannot access it.

    Thus, a critical sector of the economy continues to be grossly underdeveloped as well as remains under foreign control and dominance. The attitude of the banks and the non-utilisation of the CVFF surely defeat the key objectives of the Cabotage Act of 2004, which includes empowering Nigerians to engage in maritime enterprises carried out within the country’s coastal and inland waters. If Nigerians are to effectively participate and benefit from this potentially lucrative sector, they must be empowered to build, own and crew ships locally. Given the current foreign domination of the sector, indigenous firms cannot achieve this without the kind of support envisaged by the CVFF.

    Experts believe that if fully developed, Nigeria’s maritime resources have the potential to surpass the country’s current earnings in the oil sector. Apart from her vast coastline, over 90 percent of Nigeria’s international trade is sea borne. The country’s dependence on exports of crude oil for the bulk of her foreign exchange as well as massive importation of various goods such as raw materials for industries further underscore the importance of her maritime sector. Yet, Nigeria is yet to take maximum advantage of this huge asset.

    For instance, it has been estimated that the country’s merchant fleet hardly accounts for three per cent of the world merchant fleet. In the same vein, while an estimated 300 vessels are required to meet Nigeria’s tonnage, there are reportedly less than 20 active Nigerian registered vessels handling the country’s external trade. If the CVFF achieves its objective of boosting indigenous participation in the sector, this will enhance the country’s national finances by helping to conserve foreign exchange. This will be in addition to enabling Nigeria have greater control over her maritime security as a sovereign country.

    We call on the National Assembly, as part of its oversight function, to inquire into why the CVFF remains unutilised. Could the designated banks be trading with the funds? Why has NIMASA not been more forceful in ensuring that the banks adhere to their agreement with the agency? Indeed, the National Assembly should look into all other funds that lie idle instead of being used for their stipulated purposes. A good example is the National Automotive Council Fund. A country like ours in dire need of urgent economic transformation cannot afford to have designated development funds unutilised.

     

    ssembly to look into

  • N40b Cabotage fund trapped in banks

    N40b Cabotage fund trapped in banks

    The N40billion Cabotage Vessel Financing Fund (CVFF), designed to assist indigenous shipping firms to acquire capacity to match foreign dominance in coastal and inland trade, is trapped in the banks.

    The fund, established under the Coastal and Inland Shipping Act, 2003, is derived from the two per cent deduction from all contracts awarded under the Cabotage regime.

    The banks, government sources said, are reneging on the agreement they signed with the Nigerian Maritime Administration and Safety Agency ( NIMASA) before it made  the deposit.

    Under the agreement, NIMASA is expected to contribute 55 per cent each to all approved companies, while the partnering banks and the respective firms are expected to contribute the balance of 35 per cent and 15 per cent required to buy the vessel at an agreed 5.6 per cent interest approved by the Board of NIMASA.

    The banks, sources said, are reluctant to meet their financial obligations under the agreement in the disbursement of the fund, which has risen to over $255 million (about N40 billion).

    NIMASA is the government agency charged with managing and disbursing the fund to indigenous operators.

    Sources alleged that the banks are foot dragging in matching their own 35 per cent obligation based on the agreement.

    “There are serious indications that the banks are not willing to bring out their counterpart funding based on the 5.6 per cent agreement they had with NIMASA. Although NIMASA may not be willing to say the fact, I can tell you that the banks are responsible for the delay in the disbursement of the fund, “ the source said.

    The Nation learnt that some maritime lawyers, who are uncomfortable with the twist of events, are considering initiating legal processes to resolve the issues.

    “The banks need to note that the industry watchers are interested in the disbursement of the fund. If they intend to sabotage the efforts of the Federal Government and NIMASA, I am sure they should be prepared for litigation after using the money to promote their businesses,” he said.

    When contacted, the Deputy General Manager, Public Affairs, NIMASA, Hajia Lami Tumaka said the money would soon be disbursed.

     

  • Ship owners flay Cabotage Act

    The Indigenous Ship Owners Association of Nigeria (ISAN) has berated the inability of the Federal Government for not enforcing the Coastal and Inland Shipping Act 2003 (Cabotage Act) to enable them to participate in crude oil lifting.

    Speaking with The Nation in Lagos, its General Secretary, Capt. Niyi Labinjo, urged the government to implement the law and give indigenous companies opportunity to participate in the oil business.

    The country, he said, exports about 2.5 million barrels of oil yearly, wondering why the indigenous ship owners are not empowered to lift about 1.5 million barrels.

    The banks, he said, were willing to give them loans if the government could give them some contracts to lift oil.

    He cited Brazil where the government approves about 700 agencies to issue certificate of compliance on local content.

    Labinjo said about five years ago, the government trained 200 cadets under the National Seafarers Development Programme and regretted that since there were not enough shipping companies to employ them, the cadets had been rendered jobless.

    He advised the government to provide enough funds for the Maritime Academy of Nigeria (MAN), Oron in Akwa Ibom, to enable the academy to produce more cadets for the nation.

    “We will continue to press the government. We’ll continue to make our views known about the need for proper compliance with cabotage; about the need for proper compliance with the Nigerian Content Act.

    “If I have a government that is insisting that this year out of the 2.5 million barrels of oil that Nigeria exports, 1.5 million barrels would be carried by Nigerian and they say, ‘ISAN take this 1.5 million barrels, go and carry it,’ we will gladly go to the bank. The bank will give us money and we will do it.”

     

     

     

     

  • ‘Stakeholders sabotage enforcement of Cabotage Act’

    The implementation of the Cabotage Act is being sabotaged by stakeholders, a university teacher has said.

    Mr Dipo Alaka of the Lagos State University (LASU) said the law could easily be implemented if the agency saddled with enforcing it, musters the political will to do so.

    “This is the time for the government to buckle-up and see to the implementation of the Cabotage law. But we need to understand the problems confronting the agency before we can say yes, maybe some individuals in government are trying to frustrate the implementation.

    “My thinking is that every ship that calls at our port should first declare arrival to the Nigerian Ports Authority (NPA), NIMASA and the Navy. By doing so, it would become easy to implement the law,” he said.

    Alaka said the execution of the law should not be a problem. “The agency saddled with enforcing the law does not even need to get to the jetty to arrest a vessel; she can ask a vessel to tell her its point of loading. So, if it is offshore Lagos or offshore Cotonou, the agency can then verify if it is on the list of Cabotage registered vessels.

    “Therefore, implementation should not be a major issue. From all indications, there must be a kind of conspiracy between the operators and people that grant approval for foreign vessels to come into the country.”

    He said Nigerian ship owners must be supported by the governmentand banks to buy sufficient vessels to adequately carry out coastal trade.