FALLING CRUDE PRICE: How FG can salvage dwindling income with improved maritime facilities



As the Federal Gov­ernment struggles to stabilise the econo­my after the crash of crude oil price at the international market, economic experts are insisting the maritime sector can buoy the econo­my if its potentials are ad­equately harnessed.

The submission comes from the fact that the sector is vast and boasts of myriads of stakeholders including shippers, terminal operators, chandlers, government agen­cies, freight forwarders and other private sector players.

This they argued stems from the fact that Nigeria has unlimited business opportu­nities in the maritime sector consisting of as a vast coast­line of over 800 kilometres, an exclusive economic zone of well over 200 nautical miles, navigable inland waterways of 3,000 kilometres, six ma­jor seaports, 11 oil terminals, over 170 private jetties and six major inland container depots.

It is rather worrisome that nations like The Philippines, South Korea, China and oth­ers with less natural endow­ments have gone far ahead of Nigeria in maritime industry having invested fully in it after realising its importance.

Today, 80 per cent of the economic prosperity of these Asian nations comes from shipping as they have gone ahead to develop and export seafarers and other maritime assets to Africa.

Industry records show that The Philippines alone gener­ates $7 billion annually ex­porting seafarers, out of the $16 billion Overseas Filipino Worker (OFN) programme.

Unfortunately, the Nigerian maritime sector has not been the toast of successive admin­istrations because it requires huge capital outlay and a long gestation period before any investment is recouped.

Experts have repeat­edly said government’s poor knowledge of the sector; cor­ruption and the penchant for quick returns have blighted the growth of the Nigerian maritime sector, although many believe that all hope is not lost if the government can pay full attention to the sector as it is capable of generating millions of direct and indirect jobs, while generating about N10 trillion annually.

A seasoned Maritime Law­yer, Mr. Olisa Agbakoba, in an advisory letter dated De­cember 19, 2014, written to the Minister for Finance and Coordinating Minister of the Economy, Dr. Ngozi Okonjo- Iweala, said the maritime sec­tor can generate N7 trillion revenue annually.

He said the untapped rev­enue can only be accessed if the Federal Government can pay closer attention to the vi­tal sector and overhaul some of the frameworks guiding its operations.

In his letter titled, “Genera­tion of Revenue from Non-Oil Sector of the Nigerian Econo­my,” Agbakoba told Okonjo- Iweala that, “your welcome statement that Nigerians should henceforth view the country as a non-oil produc­ing nation and explore other sources of revenue as a result of the decline in the price of oil, calls for reflection. You have suggested broadening the tax base to raise revenue. While this is a good step, we suggest that it only scratches the surface.

“As I have always said to you, there is massive un­tapped revenue in our mari­time sector estimated at N7 trillion per annum. I will sug­gest that you pay close atten­tion to this sector, which at this time has all but collapsed. In order to tap revenue from this sector, there will need to be an overhaul of policy, insti­tutional, regulatory and legal framework.

“There is a raft of legisla­tion pending in the National Assembly, which have de­terred growth in the sector, including the Petroleum In­dustry Bill (PIB), the Ports & Harbour Bill, the Bill estab­lishing the economic regula­tor (shipping sector), and the Maritime Zones Bill. In fact, there is very good reason to review Nigeria’s Ocean Pol­icy to tap abundant national resources,” Agbakoba urged.

The soothing news from the sector is Federal Govern­ment’s seeming determination to float a private sector driven national shipping line, which maritime experts believe, when realised, will be the first step towards raising non-oil revenue base of government.

The national carrier being midwifed by the Nigerian Maritime Administration and Safety Agency (NIMASA) is expected to create thou­sands of jobs for Nigerians, help replenish the depleted manpower stock in various fields, build capacity for local shippers, wrest juicy shipping contracts from foreigners un­der the Cabotage Act and sub­stantially grow the nation’s economy.

Since the demise of the for­mer national carrier, the Nige­rian National Shipping Line (NNSL) in September 1995, manpower development in the nation’s maritime domain suffered a setback because training and retraining of sea­farers was a major function of the carrier.

Nigeria is the only country among the Organisation of Pe­troleum Exporting Countries (OPEC) without a national carrier and whose crude oil is sold Free On Board (FOB).

This embarrassing devel­opment, coupled with other factors, compelled the Presi­dency to give NIMASA the needed approval to set up of a new national shipping line.

The Director General of NIMASA, Dr. Ziakede Pat­rick Akpobolokemi, revealed that the upcoming shipping line would be a Private-Pub­lic-Partnership (PPP) deal with the private sector at the driver’s seat.

Source : SunOnline

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