Merger talks set NIMASA, NISA on collision course

By Andrew Airahuobhor  / Correspondent, Reporting from Germany


The Nigerian Maritime Administration and Safety Agency (NIMASA) and the Nigerian Ship-owners Association (NISA) are two organizations in the maritime industry that are often disagreed on issues in the sector, especially as it concerns development of indigenous shipping in Nigeria.

While the NIMASA Act of 2007 mandates the Agency to develop indigenous shipping in international and coastal shipping trade, NISA on the other hand, is worried that the operating environment has never been conducive for indigenous firms to thrive.

This was why a suggestion by the director general of NIMASA, Ziakede Patrick Akpobolokemi, asking Nigerian shipping firms to merge so that they can be in a better position to compete with their foreign counterparts, set them on collision course again.

Akpobolokemi had told newsmen that the merger of Nigerian shipping firms will place them in a position to develop capacity and excel in international shipping business. He argued that the indigenous ship owners could not take part in shipping activities because they do not own a vessel that meets the standard of modern operations.

“The main issue is that if you do not own a vessel, you cannot take part in shipping business. Nigeria is about 850 kilometres of coast line land we have a lot of oil and gas operations, which use specialised vessels, PSVs, tractor handling, crew boat. So, these are specialised vessels and if the indigenous ship owners don’t have those types of boats, what are they going to do?” Akpobolokemi said.

Nigeria had enacted Coastal and Inland Shipping (Cabotage) Act 2003, to among others; restrict trade along Nigeria’s coastal waters to indigenous operators. This ordinarily would have boosted indigenous ownership of ships, but the reverse has been the case.

The Act made provision for a waiver clause that allows foreigners to participate in coastal shipping when there is no Nigerian who has capacity for such jobs. But over the years, foreigners still dominate over 80 percent of the trade, due to misapplication and abuse of the waiver clause by the transport ministry.

Former secretary general of NISA, who has just resigned to contest for the post of chairman, Capt. Niyi Dada Labinjo said that market forces  will determine if local ship-owners will merge or not.  He said it is not for NIMASA to advise local ship-owners to form a merger before they can compete favourably well with their foreign counterparts.

He said in an interview that a regulator does not go on the pages of the newspapers to start asking operators to merge. Instead, the regulator gives a standard for operators, and those that cannot meet up are either acquired by the bigger ones or they form a merger with some other smaller groups.

“a regulator, before setting a standard, looks at the prevailing situation in the economy; and then decides on what is best for the sector by coming out with a policy. Before, in this country, all that is needed to own a shipping company was a million naira to register that company.

“That was what was prevailing up till the year 2000. It was after the year 2000 that NIMASA came up with a policy that anybody who intends to run a shipping company must have a minimum of N25 million share capital. After that policy, many who could not raise such capital packed up. That it is the way it should be. It is not for NIMASA to go on the pages of the newspapers to ask local shipping operators to form a merger.

He said that NIMASA should look at what is best for Nigeria’s shipping companies, and then call everybody together to pass the message across to all of them. They will sit down to discuss these ideas together, and then NIMASA will now come out with a standard policy that must have been discussed at the stakeholders meeting. “So whosoever cannot meet up with such policy either ships out or look for another person to form a merger with,” he said.

He said market economics is what will determine if there is need for a merger among local shop-owners, and that NIMASA cannot force individual companies to form a merger because everybody has their own rules and regulations. He said each company has its own procedures of doing things, saying that if these firms must merge, it means they will forfeit their individual personalities.

“Look at what happened in the banking industry, the Central Bank of Nigeria (CBN) did not ask banks to merge; it only set a standard for banks to meet. If you cannot meet that standard, then you have the option of merger. That is what i call market forces. Those banks that could not meet up with the standard laid down by the CBN were either acquired by the bigger banks or went into a merger with some other groups of banks. That is what a regulator does. “

Akpobolokemi who spoke on the heels of the dwindling fortunes of Nigerian ship owners in recent years said it was imperative they do so since an enabling environment has been provided for them to excel.

He spoke at the sidelines of a media briefing organised by the agency to intimate the world about its activities.

Source : Independent

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