The Nation Newspaper

Tag: Shipowners

  • Shipowners call for due process in $400m cabotage fund disbursement

    Shipowners call for due process in $400m cabotage fund disbursement

    Indigenous shipowners have called for strict adherence to due process and transparency in the disbursement of about $400 million Cabotage Vessel Financing Fund (CVFF).

    Minister of Marine and Blue Economy, Adegboyega Oyetola had last week directed the commencement of the process for the disbursement of the CVFF, after more than two decades of inactivity.

    Shipowners at the weekend described the disbursement as a significant step towards strengthening local shipping business and boosting the nation’s economy.

    They commended the Minister over the directive to the Nigerian Maritime Administration and Safety (NIMASA) to begin the process for the disbursement of the fund, noting that disbursement would usher in a new era of strategic repositioning of Nigeria’s indigenous shipping. 

    Managing Director, Starzs Marine and Engineering Ltd, Greg Ogbeifun, said the directive on disbursement was a welcome development that would further spur the growth of the sector.

    Ogbeifun, who was the former President of the Shipowners Association of Nigeria (SOAN), however, urged the government to allow due process according to the requirements of the Act to be followed.

    According to him, the minister is acting accordingly by taking the bull by its horns through the disbursement of the fund.

    “The minister’s move is extremely commendable. Extremely,  commendable. The important thing is that due process according to the requirements of the Act has to be followed. So, that’s the summary. I think it’s a very commendable step. I’ve looked at the marine notice that was sent out and I think it’s majorly in line with the requirements of the Act.

    “Even, when you look at the previous guidelines, there is good reason to at least, believe that the minister is acting accordingly. But I don’t know if the requirements of the Act as it relates to the legislating part of government are followed,” Ogbeifun said.

    He, however, agreed that the directive would finally unlock the long-standing issue of disbursement of the CVFF.

    President of the Shipowners’ Association of Nigeria (SOAN), Sonny Eja, also applauded the minister, saying the decision was a welcome development.

    Eja stated that aside from being long overdue, partnering with the Bank of Industry (BoI) for the disbursement is another feat.

    “I would say this is a welcome development. Though it’s long overdue you know like I’ve always said to people ‘don’t blame yourself for not doing something yesterday or for not doing something last week or last month, the best time to start is now and so it’s a welcome development and I’m equally excited at the fact that they are partnering with BOI in respect of this fund. For me, to hear that they’re going to work with BOI to disburse this fund is quite a good development, too.

    “Of course, the single obligor of $25 million is okay, it’s a welcome deployment as well as it would allow wherever the borrowers are going to be to adequately use this fund judiciously.”

    Eja, the managing director of Petromarine Nigeria Ltd, however, urged the government to put measures in place that would ensure that beneficiaries put the fund to good use.

    Read Also: Paris Club refund: Consultant files contempt charge against CBN

    “Thirdly, I want to believe that they have set the right criteria for accessing these funds and I want to believe also that they have put in place very very good measures to recover these funds so that people don’t just access these funds divert them for other purposes and then they are not able to pay back.

    “Whilst we commend the minister and the federal government through Mr President, we equally would urge whoever the beneficiaries of this fund will be to ensure that they’re put into good use so that it won’t give the industry a bad name that either ship owners or other stakeholders just access this funds and then they now become non-performing loans.

    “I believe also that the equity contribution that they have put in place is okay so that there’s a commitment on the part of the borrower to know that okay, I equally have a part to play accessing these funds,” Eja stated.

    On his own, the President of the Nigerian Shipowners Association (NISA), Sola Adewunmi, also commended the Minister, saying it was the first time a Minister would direct NIMASA to commence the process for disbursement of CVFF.

    He further stated that with the Minister’s directive, the guidelines should be rolled out to beneficiaries to know how to access the fund.

    “With the Minister’s pronouncement, let’s hope that things will change. But let us see the guidelines first. Also, I think this is the first time a Minister will come out to say, NIMASA, start this process,”  Adewunmi said.

  • Shipowners may need $30m for vessels’ repairs

    Shipowners may need $30m for vessels’ repairs

    Amid dollar shortage and continuous depreciation of the naira, Nigerian shipowners will need between $20million and $30million this year to repair their ships abroad, findings have shown.

    Investigation show that despite the Nigerian Maritime Administration and Safety Agency (NIMASA)’s acquisition of a N50 billion floating dock, shipowners still need the huge amount to keep their vessels afloat.

    A shipping expert, Kola Igbayilola, said the scarcity of dollars in the banking industry continues to dampen the demand for imports and hitting shipowners who have to look for a substantial amount of it to repair their vessels abroad.

    Many banks, Igbayilola said, are finding it difficult to fund clients seeking dollar to repair their vessels and that many members of the group are unlikely to raise the over $30 million estimated and needed to carryout the repairs.

    “Shipowners would require over $30 million  to go abroad and repair their vessels and it is very tough to raise such funding locally at the moment because of dipping dollar liquidity in the banks,” he said.

    According to him, a sharp drop in dollar revenue forced the Central Bank of Nigeria (CBN) to devalue the naira.

    “Still, the naira remains ‘too expensive’and a dollar shortage is starting to hurt shipping l businesses seriously.

    “There are many benefits to regular dry docking for a commercial vessel. One of the most important is improved safety. During a dry docking, the vessel is carefully inspected by experienced professionals who can identify potential safety issues and address them before they become major problems at sea,’’ Igbayilola added.

    For a ship to be seaworthy, he continued,  “the owner must enable it to carry out its functions economically and efficiently. Thus, the ship must possess attributes such as stability, strength, manoeuvrability, seaworthiness, a good internal environment – air quality, temperature, ambient noise and vibration; adequate cargo-handling systems for loading, unloading and internal movement; adequate navigational systems – sensors and actuators; systems for anchoring and mooring and easy access around the ship.

    “A ship’s attributes can involve a wide range of calculations to check that the required level of safety and capability are achieved,” he said.

    President, Nigerian Chamber of Shipping,  Aminu Umar, said ship repairs had been a major challenge for operators based on the shortage of the dollar.

    Umar said Nigerians owned 80 per cent of vessels repaired in countries such as Senegal, Ghana, and South Africa and that members of the association took their vessels to some  of these African countries for repairs.

    Read Also: Reps $700m Cabotage fund suspension will affect disbursement conditions – Shipowners

    Another a ship owner,  who spoke with The Nation on the condition of anonymity said “one of the biggest challenges we have as a group and company is ship repairs. We have many vessels that are going for dry docking outside the country and it costs us about $2.3 million to dry dock the vessel for about a month.

    “Therefore, it is very challenging and sad that we do not have enough money to dry dock  and feed our families because of the depreciation of the naira.”

    Many Nigerians, he said, were taking their vessels to Tema in Ghana, Dakar, Malabu in Equatorial Guinea or Namibia for repairs.

    “In a year, Nigerians dry dock many vessels outside the country. If you caculate the amount  by $2million or $3million, you will see that many companies spend a minimum of $30million  on ship repairs in other countries annually.”

    Investigation show that is not just the shipowners that are finding it difficult to conclude dollar deals, importers are also facing the same problem with a large number of them saying that they don’t have the money to continue in the importation business.

    A vehicle importer, Saheed Obafemi, said the demand for imported vehicles has dropped as prices soared with many Nigerians looking inwards for the Nigerian used cars as substitutes.

    “The naira exchange rate to a dollar is making goods and services linked to the dollar unaffordable for anyone with a legitimate business. Motor vehicle importers have run out of options and face consumers whose income cannot accommodate new price hikes in ‘Tokunbo’ vehicles and are now going for locally used vehicles substitutes,” he said.

    Obafemi said the most important determinant of the value of the naira is the productivity and competitiveness of the economy.

    He added that other factors such as terms of trade, inflation differential, public debt, current-account deficits, interest rates, political stability and the overall economic health are also important.

    Other stakeholders, who spoke with The Nation in a separate interviews, said the dollar crunch is having such an impact on the economy that it had become a major point of discussion and debate among political as well as business circles.

    They pointed out that the exchange rate policy being implemented by the CBN does not reflect Nigeria’s economic realities.

  • Govt, shipowners to collaborate

    The Shipowners Association of Nigeria (SOAN) has pledged to collaborate with the Federal Government to meet the expectations of  stakeholders.

    SOAN Vice President and Chairman, Organising Committee,  End of the Year Annual General Meeting (AGM),  Alfred Okoigun, made  this known in Lagos.

    In an interview, ahead of the  AGM, he said: “We are beginning to get the collaboration of the industry players like the Nigerian Local Content Board, the NAPIMS office and NIMASA, with everyone of them, not just listening but even asking us: what are your challenges and where can we help? This was not a common thing before,” adding that the association,  five years after its founding,was proud of the disposition of certain high-calibre individuals, including the Minister of Transportation, Rotimi Amaechi, the Petroleum Minister of State, Dr. Ibe Kachukwu, the Executive Secretary, Nigerian Local Content Board, Simbi Wabote and the Director-General, Nigerian Maritime Administration and Safety Agency  (NIMASA), Dr. Dakuku Peterside.”

    He continued: “This was not how it used to be when we operated as if we were on our own and they were on their own; fighting one another and even as some of the coordinating ministries were also not in harmony.

    “But through the SOAN, we have been able to blend them all of them, because we have emphasised the importance of national interest. Can you imagine that with the quantum of water we are endowed with, we have not harnessed and prospered from it?

    “If you go to Holland, Sweden, Norway or even Dubai without much water, you can see what they are doing with their waters. But here, we are just scratching the surface.

    “So, this year is to really get the government and the key players together, to enable all parties, brainstorm and explore how we need to continue to collaborate and improve together in the overall interest of both the maritime industry and the citizens.

    “We have some relevant stakeholders who should join us; but are still outside. But I am happy that some of them are already appreciative of what SOAN is able to do. We are using the tools of personal engagement, as well as the media to let them know they should no longer stay out.

    Speaking on what to expect at the  AGM at the Oriental Hotel, Lekki, Lagos,  Okoigun confirmed the attendance of Amaechi; and  Kachukwu as special guests of honours, and some dignitaries, adding that the doyen of the Nigerian maritime industry, High Chief Adebayo Babatunde Sarumi would chair the event.

  • Shipowners kick against foreign domination of oil trade

    Can indigenous shipowners match their foreign counterparts in the capital intensive crude oil lifting business? Yes, says the Nigeria Shipowners Association (NISA), which has launched a campaign to be involved in the business.

    The association says its involvement in the trade would be in national interest.

    Its participation would reduce youth unemployment, generate revenue and ensure security, its General Secretary, Captain Niyi Labinjo, told The Nation.

    Labinjo said it was more profitable for a Nigerian ship to lift crude as the country was losing by using foreign vessels.

    “We will gain about N968 million a day if we use our own indigenous ships to lift crude oil. This is because Nigeria carries about 2.5 million barrels of crude a day at the rate of $2.50 per barrel,” he said, adding that the huge sum would have accrued to Nigeria and created employment for at least 5,000 professionals in the sector. The advantage is that indigenous ships will get their water, food, tug boats, chandelling, engineers and rags from Nigeriam he noted.

    Labinjo said there are many qualified Nigerians in these fields who have no jobs, adding that using foreign vessels was not in the best interest of the nation because when the dependent country has crisis, Nigeria may have challenges lifting its crude.

    He said as at the last count, indigenous investments in the sector have created over 40, 000 jobs across the hydrocarbon value chain.

    Meanwhile, the Shippers Association, Lagos State has attributed the drop in the revenue collected by the Nigerian Customs Service (NCS) to inconsistency in government policies.

  • Dakuku to assist shipowners

    The President Muhammadu Buhari-led administration is not happy over the foreign domination of crude oil lifting,  Nigerian Maritime Administration and Safety Agency (NIMASA) Director-General Dr Peterside Dakuku has said.

    At a workshop on “Local Content Implementation in the Nigerian Oil and Gas Industry: A Cost Reduction Strategy”, organised by the Petroleum Technology Association of Nigeria (PETAN), on the sidelines of the 2016 Offshore Technology Conference (OTC) holding in Houston, Texas, Dakuku decried the monopoly that precludes indigenous shipowners from participating in the highly-lucrative enterprise.

    He promised to assist in building indigenous operators’ capacity to participate actively in the business.

    In his paper titled: “Local Content and Cabotage Regime Implementation in the Nigerian Oil and Gas Industry as a Cost Reduction Strategy,” Dakuku said the involvement of the indigenous shipowners in the trade would be in the national interest.

    Their participation, he noted, would provide gainful employment for many Nigerians, reduce crime, generate more revenue and ensure security at sea and around the ports.

    The DG called on International Oil Companies (IOCs) to engage eligible Nigerians in the lifting of the country’s hydrocarbons and promised to assist in building the capacity of indigenous operators to participate more actively in ferrying Nigeria’s oil and gas resources.

    He assured operators in the oil and gas sector that the apex regulatory agency is ready to enforce its statutory responsibilities especially in the area of preserving and protecting the marine environment from the adverse impact of oil exploration and other commercial activities, warning that the NIMASA will no longer tolerate a situation where IOCs renege on the payment of levies due to it as enshrined in its enabling instruments.

    Dakuku told participants at the conference that the maritime sector in Nigeria is the soul of the country’s economy.

    “Apart from the fact that most of the oil and gas exploration, which is the major revenue earner of the country is done in the maritime environment, vessels are needed to transport these products from one point to the other making the maritime sector integral to the whole economic process,” he said.

    Dakuku also expressed concern that NIMASA as a regulatory agency of government has been grossly misunderstood and assured stakeholders of the commitment of the Buhari Administration to not only engender the development of local content in the maritime industry but also push for the review of the Cabotage Act to make it more beneficial to Nigerians.

  • Shippers Council chief makes case for local shipowners in crude oil lifting

    Shippers Council chief makes case for local shipowners in crude oil lifting

    • ‘Review auto policy’

    Can the President Muhammadu Buhari administration end foreign domination of the capital intensive crude oil lifting business and make indigenous shipowners participate in the highly lucrative enterprise? Yes, said the Executive Secretary, Nigerian Shippers Council, Mr Hassan Bello, and other stakeholders in the maritime industry.

    Bello, who spoke with The Nation at the weekend, said the involvement of the indigenous shipowners in the trade would be in the national interest.

    Their participation, he noted, would provide gainful employment for many Nigerians, reduce crime, generate more revenue and ensure security at sea and around the ports.

    “I have no iota of doubt that the  administration will involve the indigenous shipowners in the crude oil lifting to provide jobs for Nigerians and put an end to foreign domination of the trade. Everybody in the country knows that it would be more profitable for a Nigerian ship to lift our crude and President Buhari led-administration can be trusted to deliver on that agenda,” he said.

    Also, a member of Nigerian Shipowners Association (NISA), Mr Fola Badmus, said there are many qualified Nigerians in this field, but that they have no jobs, adding that using foreign vessels was not in the best interest of the nation because when the dependent country has crisis, Nigeria may have challenges lifting its crude.

    He said at the last count, indigenous investments in the sector have created over 40,000 jobs across the hydrocarbon value chain.

    “We will gain about N900 million a day if we use our own indigenous ships to lift crude oil. This is because the country carries more than two million barrels of crude a day at the rate of $2.50 per barrel,” he said, adding that the huge sum would have accrued to the country and created employment for at least 5,000 professionals in the sector.

    “The advantage is that indigenous ships will get their foods, water, tug boats, chandelling, engineers and rags from Nigerians,” he noted.

    Badmus added that the volume of vehicles being imported through the seaports has reduced drastically due to the introduction of the automotive policy by the past administration.

    He corroborated the position of Vice President Yemi Osinbajo at the yearly general conference of the Nigerian Bar Association (NBA) that the hike in Customs duty on imported items has created jobs for the neighbouring Benin Republic.

    He alleged that over 70 per cent of fairly-used vehicles, popularly known as Tokunbo, being imported into the market come through the Port of Cotonou, Benin Republic.

    “The volume of imported vehicles into the country has reduced by half since the introduction of the auto policy,” he noted.

    A senior official of one of the terminals at Tin Can Island Port, Apapa, Lagos, who craved anonymity, said the policy has affected operators at the ports, urging President Buhari to address the issues to bring succour to terminal operators dealing with imported vehicles.

    “Before the introduction of the policy, we were discharging 5,000 or 6,000 vehicles every month. It is a pity that we are doing less than 1,200 vehicles and we have to service our equipment, pay NPA and salaries at the end of the month.

    “We have noticed that the number of vehicles coming into Cotonou has increased dramatically, so we are losing business while Cotonou is gaining. Everyone can understand what this  means and we know that Cotonou’s population has not increased from its 10 million people.

    “This policy is surely affecting the port industry and this is affecting the economy of the country because we read in one of your reports about few weeks ago that smugglers are using many un-approved routes around Idiroko border in Ogun State to bring their vehicles into the country,” he said.

    He said many Nigerians could not afford to buy brand new vehicles and urged the Federal Government to review the auto policy.

     

  • Shipowners kick over foreign domination of oil trade

    Shipowners kick over foreign domination of oil trade

    Can indigenous shipowners match their foreign counterparts in the capital intensive crude oil lifting business? Yes, says the Nigeria Shipowners Association (NISA), which has launched a campaign to be involved in the business.

    The association says its involvement in the trade would be in the national interest.

    Its participation would reduce youth unemployment, generate revenue and ensure security, its General Secretary, Captain Niyi Labinjo, told The Nation.

    Labinjo said it was more profitable for a Nigerian ship to lift crude as the country was losing using foreign vessels.

    “We will gain about N968 million a day if we use our own indigenous ships to lift crude oil. This is because Nigeria carries about 2.5 million barrels of crude a day at the rate of $2.50 per barrel,” he said, adding that the huge sum would have accrued to Nigeria and created employment for at least 5,000 professionals in the sector. The advantage is that indigenous ships will get their water, food, tug boats, chandelling, engineers and rags from Nigeriam he noted.

    Labinjo said there were many qualified Nigerians in these fields but they have no jobs, stating that using foreign vessels was not in the best interest of the nation because when the dependent country has crisis, Nigeria may have challenges lifting its crude.

    The Minister of Petroleum Resources, Mrs Diezani Alison-Madueke, said in Abuja last month that indigenous shipowners lift about 60 per cent of Nigeria’s crude. She said over 60 per cent of the 2014 /2015 annual term contracts for the lifting of Nigeria’s crude have been awarded to local firms.

    She said  as at the last count, indigenous investments in the sector have created over 40, 000 jobs across the hydrocarbon value chain.

    Meanwhile, the Shippers Association, Lagos State has attributed the drop in the revenue collected by the Nigerian Customs Service (NCS) to inconsistency in government policies.

  • Shipowners, stakeholders seek removal of waiver clause

    The Nigerian Shipowners Association (NISA) and other stakeholders have urged the Federal Government to remove the waiver clause from the Coastal and Inland Shipping Act (Cabotage Act of 2013).

    This, they said, would improve the business of indigenous shipowners.

    NISA Chairman Chief Isaac Jolapamo said over 50 per cent of firms have been shut due to the poor implementation of the Cabotage Law.

    He said NISA canvassed the position at the stakeholders’ meeting with the Minister of Transport, Senator Idris Umar, on policy guidelines for the granting of waivers under the Coastal and Inland Shipping Act 2003 otherwise known as the Cabotage Law.

    “The removal will help to address the plight of indigenous ship owners whose businesses have been damaged,’’ Jolapamo, said, adding that it was sad that indigenous ship owners were not doing well despite that they started business in Nigeria.

    He urged the government to implement the report of the Presidential Committee on Development of the Maritime Industry to assist NISA.

    NISA’s Secretary, Capt. Niyi Labinjo, also called for the removal of the waiver clause, saying his colleagues members are owing banks over $3 billion (N480 billion).

    The waiver clause, according to Labinjo, has been made more important by the Ministry of Transport to the detriment of the implementation of the Cabotage Law itself.

    “I am alarmed at the kind of vessels that are granted waiver in Nigeria. Instead of giving waivers to specialised vessels in consonance with the dreams of the initiators of the Act, we end up giving waivers to anchor handling and tankers which the Act did not envisage for waivers.

    “In other climes, they do not leave the administration of waiver to be handled by the ever busy government officials like the Minister, Permanent Secretary or NIMASA, but rather, it’s an all-inclusive exercise where applications are received by the agency concerned and forwarded to the stakeholders who do the needful and make recommendations to the implementing agency which now carries out the recommended action,” Labinjo said.

    In a related development, the National Association of Nigerian Traders (NANTS) has called for the establishment of an independent body to review all applications for import waivers and concession.

    NANTS said the demand was meant to ensure transparency and accountability.

    The President of the association, Mr Ken Ukaoha made the appeal in a statement made available to reporters.

    He said the policy could only be measured by its impact in promoting the common good.

    “Weak institutions produce dysfunctional policies and dysfunctional policies only breed corruption, waste and retrogression, and this is what we are facing with the waivers and concessions,’’ it said.

    The NANTS chief said the body would be drawn from the private sector, civil society, consumer associations, academia and representatives of relevant government agencies, such as the Ministries of Finance, Agriculture and the Nigeria Investment Promotion Council.

    He said the use of waivers and concessions was one of the legitimate tools any government could use for economic development and poverty eradication.

    “Waivers and concession could also be used as an instrument to regulate the economy like tariff. In principle, waivers and concessions themselves are not bad.

    “By nature, waivers and concession are prone to abuse and that is why any serious nation ought to pay attention to the manner such instruments are administered,” he added.

  • Shipowners lament domination

    Only about 60 of the 600 vessels in the upstream sector of the oil and gas industry are owned by indigenous operators, the General Secretary of the Indigenous Shipowners Association of Nigeria (ISAN), Captain Niyi Labinjo, told The Nation in Lagos, has said.

    He disclosed that a vessel into offshore operations collects at least $5,000 daily. This, according to him, is the least amount collected by foreign vessels doing business in the nation’s waters.

    As a result of lack of indigenous ships, he said the country loses about N2 trillion yearly.

    He said: “We have plenty of hydrocarbons. As at today, it is 37 billion barrels, but our government is working towards making it 40 billion barrels. That is our proven reserve. We are said to be the 10th world producer of oil. The world everyday uses 84 million barrels per day of oil and Nigeria produces 2.5 million barrels every day. For gas, we have 24 trillion reserves.

    “We have the best shrimps in the world, called tiger shrimps. That is why you have very many Indian fishing companies in Nigeria. All the tiger shrimps are exported. We import into Nigeria every five million metric tonnes of cargo, 100 million metric tonnes of goods. We import 65 million litres of petroleum products every year.

    “In the oil and gas industry, Nigeria has close to 500 oil wells. For each well, there is a rig which is supported by a minimum of five ships, and they are called oil support vessels. He said each of the foreign ships earn $5,000, while others earn $150,000 per day.”