Nigerian ship owners and marine engineers have said that lack of participation in the global shipping space has led to the country losing N2.6 trillion ($1.62 billion) from corporate income tax annually.
They also explained that about $5.42 billion could be added to the nation’s gross domestic product (GDP), while an estimated $1 billion Foreign Direct Investment (FDI) would flow into the country annually.
The Chairman of Starz Marine and Engineering Limited, Engr. Greg Ogbeifun, while presenting a paper at the 16th marine technical summit themed: “Maritime Transport and Blue Economy:
Route to Sustainable Success,’ organised by the Association of Marine Engineers and Surveyors (AMES) in Lagos, advised the Federal Government on the need to change the nation’s trade terms from Free On Board (FOB) to Cost, Insurance and Freight (CIF), especially for crude affreightment.
Ogbeifun stressed that the African Continental Free Trade Agreement (AfCFTA) had opened a new vista for shipping development, noting that the availability of Nigerian ships for the regional trade would have led to increased FDI significantly and lead to a seven per cent increase in Nigerian income from the current path by 2043.
He said: “China is angling to introduce ships that would domi – nate the carriage of goods under the AfCFTA, while Nigeria is wrongly celebrating the export of goods without participating in the freight carriage.
“At the moment, Nigeria spends about $9.2 billion annually on freight charges paid to foreign shipping companies. “These payments constitute a significant outflow of foreign exchange, contributing to the weakening of the naira.
Establishing a shipping fleet would enable Nigeria to retain a substantial portion of this revenue within the country, strengthening its economy and reducing dependence on foreign currency.”
Also, the President of AMES, Engr. Israel Obadan, expressed dissatisfaction at the current state of shipping in the country, lamenting that there was lack of single digit interest loans for operators and the dearth of qualified engineers and master mariners.
The president said that the association had initiated plans to have training arrangements with the Nigerian Maritime Administration and Safety Agency (NIMASA) and Dangote Refinery for the training of marine engineers, with emphasis on sea time.
Recall that local ship owners had complained that they were losing $1.9 billion annually to foreign shipping lines in the oil and gas due to lack of patronage by the Nigerian National Petroleum Company Limited (NNPC Ltd).
Also, they noted that since the demise of the Nigerian National Shipping Line (NNSL), no Nigerian flagged ship plied the international route as absence of fiscal incentives for the shipping industry has hampered its growth, making the country to be wholly dependent on foreign registered vessels to move its import and export trade with adverse economic implication for the country.
According to Ship Owners Forum (SOF), despite the Nigerian Fleet Implementation Committee (NFIC) set up four years ago by the Federal Ministry of Transportation with a mandate to promote Nigerian ownership of ships and vessels to enable local companies take control of the shipping business, the country still lack national fleet to dislodge the foreign liners.
The SOF blamed their woes on the Nigerian Maritime Administration and Safety Agency (NIMASA) and NNPC Ltd for not showing any plans to position the local ship owners to benefit from AfCFTA at a time the global blue economy accounts for $6 trillion a year which translates to $16.4 billion daily, $680 million per hour and over $11 million per minute, noted that Nigeria was the only oil producing country in the world to adopt Freight on Board (FoB) because of risk.
Ogbeifun said that since the demise of NNSL, the country had become wholly dependent on foreign owned and foreign registered vessels to move its import and export trade with adverse economic implication for the country.