Funding, forex crises ground indigenous vessels

Vessels estimated to be about 500 that are owned and operated by Nigerians are grounded as the owners are unable to access funds for fleet maintenance and repairs, Daily Trust has learnt.

Also responsible for this development is the free fall of the naira and operators’ inability to access forex for the procurement of parts.

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Besides, most indigenous ship owners plying the Cabotage trade have not been able to send their vessels for Periodic Depot Maintenance in the last 10 years, accounting for some wreckages.

The Chief Executive Officer of Morlap Group and a founding father of Nigeria Ship Owners Association (NISA), Chief Isaac Jolapamo, who spoke exclusively with Daily Trust, said over 500 vessels belonging to Nigerians are now grounded due to the rising cost of maintenance and accessibility to forex.

He explained that a former Director-General of the Nigerian Maritime Administration and Safety Agency (NINASA) created the Ship Repairs and Maintenance Fund to assist indigenous ship owners to carry out effective repairs and maintenance of their fleet

He said, however, the fund was probably used for other pressing needs in the maritime sector.

“The resultant effect is the death of over 500 vessels belonging to Nigerians and the number is still counting. The Cabotage trade was set up in the first place to encourage indigenous ship owners, but where has it taken us to? It has taken us where foreigners have taken over the Cabotage business.

“Allowing foreigners to participate in the Cabotage business has finally nailed the efforts by Nigerians in that direction.

“Similarly, the Federal Government’s refusal to disburse the Cabotage Vessel Financing Fund (CVFF) has also helped to drive the nail into the coffin of indigenous participation in the coastal trade,” he added.

The CVFF, an intervention fund created for the development of indigenous shipping capacity in Nigeria, has grown to $350 million in the 19 years of its existence.

Recall that indigenous ship owners last year decried the continuous award of contracts to foreign vessel owners for coastal shipping of petroleum products in clear contravention of the Cabotage and Local Content Act.

One year after that, the local shippers said foreign operators have continued the practice unstopped.

Daily Trust made efforts to reach the Head of Corporate Communication of NIMASA, Edward Osagie, to clarify the paucity of funds. He did not respond to calls to his phone and text message. Neither calls nor text messages to the Direct General, Dr Bashir Jamoh, were responded to.

However, a senior officer in NIMASA said the Cabotage Act clearly states the purpose of the fund, which he said is for procurement of new vessels and not for ship maintenance.