… Local shippers cry foul
By Uche Usim
DESPITE assurances from the Nigerian Maritime Administration and Safety Agency (NIMASA) that the N50 Cabotage Vessel Financing Fund (CVFF) is intact, there are indications that the money may have been depleted or diverted to other purposes by the last administration.
Since 2014 when six local shipping companies were penciled down as beneficiaries, none of them has accessed the fund, despite having scaled the due diligence hurdles and other eligibility tests.
Fund custodians said, they were reportedly awaiting the approval of former President Goodluck Jonathan, which never came till he left office. The CVFF fund is derived from the 2 per cent levy charged on the value of any cargo coming into the country.
Aside that scheme, there was also a vessel repair fund of over N1 billion also domiciled with NIMASA but which no local shipping company has enjoyed till date.
But while the local shippers await funds for purchase new vessels, most of them have already been forced out of business due to their outdated vessels which have not been replaced with modern ships.
Today only Slok Shipping and Starz Maritime with a few other thriving local shipping firms, majority of Nigeria’s shipping companies are neck deep in debts, worsened by lack of crude oil lifting contracts.
But as at the time of this report, fears were rife that the money may have been diverted to prosecute political programmes of the last administration or used as part of the funds for the construction of the Nigerian Maritime University, Okerenkoko in Delta State.
A top government source who confided in Daily Sun said: “That money may have been spent or tampered with and it is very obvious. At a point, I learnt part of it was used to fund the NSDP. For about three years now, no local shipper has accessed the CVFF. We hear the money is ballooning and yet indigenous shippers are dying gradually. They have passed all the tests so why not give them if truly the money is intact? Government needs to fully audit NIMASA to know what happened to that money because I am not so sure it is still intact”, he said.
But reacting to the allegations, the CVFF has been misused, the Acting NIMASA Director General, Baba Haruna Jauro, insists the money has not been spent contrary to insinuations.
“The money is there. What happened is that applications were brought, processed and sent to the Ministry of Transport and the Ministry wants to observe due diligence because of the experience they had in the past. They were really trying to scrutinise and because the money is big, they want to be sure they enter safe hands. They also wanted to be sure the money isn’t misused and while doing that, the government was changed and we are hopeful that a new Minister will find the forms that were processed and vetted and waiting for his approval. He would look at them and approve and those who are beneficiaries can receive the funds and buy the ships. Nobody has the right to spend the money. Even for us in NIMASA, we cannot touch it”, he assured. But more worrisome is the fact that since its inception more than four years ago, no operator has benefitted from it despite the yearning need for new vessels in the country.
The CVFF is a single digit interest loan packaged by NIMASA but warehoused in four primary lending institutions namely (Diamond Bank, Skye Bank, Fidelity Bank and Sterling Bank). It is captured under Section viii, paragraph 42 of the Coastal and inland shipping (Cabotage) Act of 2003 with the primary purpose to promote the development of indigenous ship acquisition capacity to enable Nigerians participate in the crude lifting contracts, currently dominated by foreign shippers.
Under the scheme, a prospective loan applicant must provide 15 per cent of the amount applied for as a way of showing sufficient commitment, the bank brings 35 per cent while NIMASA supplies the balance of 50 per cent.
Since the fortunes of the local shipping firms took a hit over 10 years ago due to global economic meltdown, corruption and policy summersault, about 20,000 direct and indirect jobs have been reportedly lost.
Worse still, the foreign shipping companies have not been able to absorb over 80 percent of these jobless professionals (seafarers), since they naturally come with their crew.
That aside, they claim to have competence issues with local hands and that apathy has continued to swell the rank of jobless Nigerian seafarers.
Visits to various seaports across the country show many rickety ships littering the terminals while over 95 per cent of these multi-billion naira vessels acquired by local operators are idle, old fashioned, poorly maintained, starved of cargoes and rapidly sinking.
According to a survey conducted by an online media platform, Ships and Ports recently, out of 12 indigenous shipping companies studied, only two can be said to be operating viable businesses while the 10 others representing 83 per cent of the companies surveyed, are either completely dead or are in comatose state.
The companies sampled in the survey include Equatorial Energy, Oceanic Energy, Morlap Shipping, Peacegate, Pokat Nigeria Limited, Al-Dawood Shipping, Potram Nigeria Limited, Joseph Sammy, Genesis Worldwide Shipping and Multi-trade Group all in Lagos; Niger-Delta Shipping in Warri, Delta State; and Starzs Investment Group in Port-Harcourt, Rivers State.
The survey shows that all the shipping companies surveyed in Lagos are either dead or struggling to survive while the ones in Warri and Port-Harcourt are thriving.
“A visit to the business premises of the 10 shipping companies revealed that the once thriving ventures have completely lost their glamour, with most of them owing staff salaries of up to one year’, the survey revealed.
It also stated that the shipping companies owe their crew arrears of salaries ranging from six to 14 months, while some have sold off their vessels.
Some reportedly sold some of their assets like buildings to repay some of the debt owed banks.
While the local players accuse the Federal Government of not implementing the Cabotage policy, which states they should carry 60 percent of local cargoes in the country, despite the fact that some of them have the technical competences, the government on its part says the capacity and capability of the indigenous players is a far cry from industry standards, which make foreign shipping companies the preferred choice for sea freights.
More so, the local ship owners have also frowned at the Nigerian maritime environment, declaring it as not business friendly and specially designed to favour foreigners and kill local operators.
Maritime experts have urged NIMASA to collaborate with Nigerian Content Development Board (NCDB), the Nigerian National Petroleum Corporation (NNPC) and Petroleum Products Marketing Company (PPMC) to ensure cohesive enforcement of Cabotage Act by immediately stopping foreign vessels from carrying Nigerian refined petroleum product because Nigeria has about 373 Cabotage vessels which are qualified enough to carry the nation’s refined oil products. Current statistics shows that Nigeria consumes 1.8 billion metric tons of oil per month, which means that with only 8 vessels carrying 5000 metric tons each per day, indigenous shipowners currently have sufficient capacity to carry Nigerian refined petroleum products if given the jobs.