…becomes net revenue contributor to government
By UCHE CHRIS
Given the strategic position Nigerian Maritime Administration and Safety Agency (NIMASA), occupies in the maritime industry, it is surprising to most observers that its importance is only being felt in the past few since particularly since the coming of the present management led by Dr. Dakuku Peterside. Previously known as National Maritime Authority before it was merged with the Stevedoring body, NIMASA has assumed its leadership position in the sector.
The climax of its transformation agenda came to the fore recently at the defence of its budget at the National Assembly when the Director General, Dr. Dakuku Peterside revealed that the agency had contributed N18 billion to the Federation Account in 2019. This is unprecedented and marks a era in the history of not only NIMASA but also the maritime sector, as the legislators had only praise and commendations for the leadership.
Before the present regime, the agency had merely served the interests of those in government without positively affecting the fortunes of the operators. Most of the stakeholders had generally and severally complained of the ineffectiveness of the organization in addressing some of the emerging critical problems confronting the industry.
But that fortunately seems to have changed in recent tome as the present management pursues its policy agenda aimed at transforming he sector and empowering operators. Two of the important issues being confronted squarely by the management are insecurity within Nigerian waters and inability of local shippers to expand capacity to lift general cargoes within the west African region but particularly engage in wet cargo lifting.
While the problem of insecurity in the Gulf of Guinea region has made Nigeria imports expensive as it has adversely affected maritime insurance of cargoes and exposed to Nigerian fishing trawlers to serious danger. Frequent attacks by pirates on fishing vessels have led to many loss of lives. However, the management had vowed to make the situation a thing of the past.
As a oil producing country, Nigerians shipping companies had watched with envy, anger and frustration as foreign companies monopolise the lifting of oil (wet cargo), both crude and products. Two major policies in the past to address the issues patently failed because of corruption and lack of political will to implement it. These are the Ship Ownership Acquisition Fund and the Cabbotage Act.
The Ship ownership Fund was meant to empower Nigerian shippers to acquire vessel through loan facility, while the Cabbotage law is meant to increase the involvement and participation of Nigerians in local cargo lifting. The agency has also transformed the Maritime Academy Oron, into a world class training institution to improve capacity building and manpower development in the sector, as well as the establishment of a Maritime university in Delta state.
“As at October 31, we contributed N16billion to the Consolidated Revenue Fund”, Peterside told the committee of the House of Reps. “We have achieved 133 per cent of what is expected of us, exceeding the budgeted sum of N12 billion. The 133 per cent increment follows a number of measures put in place by the Agency, such as effective monitoring of vessels, enforcement of laws, increased surveillance and debt recoveries.
Giving a breakdown of the 2019 budget, Peterside explained that N110.84 billion was budgeted as targeted revenue for 2019, of which N83.49 billion or 74 per cent was realised, while N20 billion was spent from the N28billion allocated for the mandatory Maritime Fund.
He said N20billion was budgeted for personal emolument against N15.2billion spent, while overhead was allocated N24billion but only N12billion have been spent.
He said further that capital expenditure was pegged at N18billion with only N1.5billion spent, as many contractors have not commenced work even though contracts have been awarded, adding that the Agency also released N2.5billion to the Nigerian Maritime University, Okerenkoko, Delta State.
Dakuku told the Committee that the Agency was working seriously to ensure the review of existing maritime laws in the country, to meet contemporary industry demand, and disclosed that very soon executive bills on Maritime law amendments would be sent to the National Assembly.
In her remarks before the exercise went into closed door, Chairman of the Committee, Lynda Ikpeazu (PDP, Anambara), commended the Agency for exceeding its targeted contribution to the Consolidated Revenue Fund, and assured of the Committee’s support to enable it realise its statutory mandate.
To address the security challenge, Nigeria has intensified efforts at protecting the marine environment in compliance with the Ballast Water Management Convention (BWMC) of the International Maritime Organisation (IMO).
NIMASA had earlier in this year gathered five nations including Ghana, Liberia, Sierra Leone, Nigeria, and Republic of Gambia, in Lagos, to chart path to successful implementation of the convention, aimed at a clean marine environment.
Peterside said the adoption of the BWMC was in response to the growing concern over the problem of invasive alien species on the marine environment as a result of ballast carried by ships. It was adopted in 2004 for Anglophone West and Central African Countries, in Lagos.
According to him, Nigeria, being among the first five countries to ratify the convention has taken bold steps in ensuring effective implementation, which includes: the development and gazetting of regulations on BWM to the Nigerian Merchant Shipping Act 2001.
Secretary-General, International Maritime Organisation (IMO), Kitack Lim, said the marine environment and resources are vital to the global economy and to our future and sustainable economic growth, adding that about 80 per cent of the world’s commodities are shipped through waters.
Noting that the ships transfer large quantities of ballast water, he stated that the ballast water has potential to pose serious ecological, economic and health threat due to the harmful organism and pathogens it may transfer from one ecosystem to another.
Again, NIMASA has also been tackling issues relating to insecurity in the waters. At the a meeting with oil companies and security experts in August 2019, there was consensus that daring pirates’ attacks in the Gulf of Guinea posed major danger to the oil industry.
A Security expert within the Corporate Security Division, Total Group, Gilles Chalancon, told the gathering that as private oil and gas sector, the firm was concerned about maritime security.
“Last year we noticed more incidences on the waters, attacking tanker vessels. During the first quarter of 2019, we have also noticed increased firepower from the attackers showing that they are more coordinated and determined. The fact that they are showing more determination shows that we should also display more determination as well,” he said.
Total has more than 20 major assets offshore, alongside other oil and gas companies such as Chevron, Mobil, Shell, and Agip among others.
Senior Analyst at Risk Intelligence, Denmark, Dirk Siebels, said in April 2019, some crews were kidnapped from product tanker that was later investigated for alleged involvement in fuel smuggling.
“As many of the criminal groups are also smuggling fuel from Nigeria to neighbouring countries, these activities are posing threat to the nations’ economy, especially as Nigeria relies on petroleum products.”
He emphasised that there must be a coordinated effort, coupled with transparent legal regulations to enable legal operations on the sea, adding that operators should cooperate with security agencies to enforce the law.
Also at a recent meeting with the management team of Bank of Industry led by its CEO, Mr. Olukayode Pitan, Peterside raised the hope for a new financing scheme for the sector to boost the ship ownership and acquisition fund and procurement of other assets for its operations.
He said, “We have continuously sought partnerships that would grow our industry. We know that maritime asset financing is one of the major challenges of this industry, and we are tackling it head-on. In no distant future our people would be able to reap the benefits of our strategy.”
Speaking, Pitan commended the NIMASA management led by Dakuku for its various transformative initiatives in the maritime sector. He said the initiatives have brought renewed confidence in the maritime industry, and BOI is ready to partner with NIMASA because the viability of the sector would rub off on the entire economy.
Pitan disclosed that BoI has an existing financing model in partnership with the Nigerian Content Development and Monitoring Board (NCDMB), which could also benefit the maritime sector if applied.
“We are proposing a partnership with NIMASA on vessel financing. We already have a similar partnership with NCDMB that is currently running at a single digit of eight percent, with little or zero risk for NCDMB, since the fund invested by NCDMB is guaranteed by BOI. This model, we think, can also benefit NIMASA and the entire maritime sector.”
Mr. Isichie Osamgbe, Deputy Director, Public Affairs, NIMASA, told BusinessHallmark in a telephone interview that the Director General has brought new impetus and transparency in its operation and has developed comprehensive strategies to address some of the serious issues affecting the sector.
“Apart from the revenue contribution to the federation account which is historic, the management is interfacing with several key stakeholders to deal with the challenges of security, capacity and local content as well as manpower development in the industry to ensure that Nigerians take their rightful place in the scheme of things”.