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How NIMASA has changed the narrative in the nation’s maritime sector

The implementation of the Integrated National Surveillance and Waterways Protection Solution (INSWPS) with command and control of infrastructure is part of Nigerian Government’s deep blue…

The implementation of the Integrated National Surveillance and Waterways Protection Solution (INSWPS) with command and control of infrastructure is part of Nigerian Government’s deep blue contract to enhance security in the Gulf of Guinea. Most importantly, the Deep Blue Project of the Nigerian Maritime Administration and Safety Agency (NIMASA) is a totally wide spectrum maritime security strategy which is built on four pillars: situational awareness, response capability, law enforcement and regional cooperation.

At the helm of affairs of NIMASA in the last three years is Dr. Dakuku Peterside, who believes that the maritime sector is rich enough to see Nigeria out of recession. He has in recent times diversified the sector from being predominantly dominated by foreigners.

The realisation that the maritime sector, particularly the Blue Economy, holds the goose that lays the golden eggs to the rapid development of the society, has also made it to focus attention in that very critical area.

The combined effort of the Minister of Transformation, Rotimi Amaechi, NIMASA, led by Dr. Dakuku Peterside as its DG, has been promoting the segment vigorously because of its potentials.

The NIMASA DG explained that the Blue Economy dealt with “the totality of all economic activities associated with oceans, seas, harbours, ports and coastal zones.” It also includes aquaculture, biomedicine, boat and shipbuilding, cables and pipelines, coastal zone management, defence and security, desalination and water treatment, marine recreation, ocean energy and minerals, ocean science and observation, port operations, robotics and submarines, shoreline development, telecommunication, marine tourism, very large floating platforms, weather and climate,” he said.

He further said some Blue Economy sectors in Nigeria were aquaculture, maritime ports infrastructure, shipbuilding and repair yards, training of seafarers, maritime education and training, deep sea development, wreck removal and recycling and marine insurance.

In the last two years, NIMASA has indeed developed the Blue Economy through a number of measures that are being put in place to improve service delivery at the ports and the entire maritime sector.

Thus it is because NIMASA has realised that the potential of Nigeria‘s Blue Economy is far from being fully harnessed that has made it to be at the centre of the effort to articulate a coordinated policy framework for the Blue Economy in Nigeria consistent with 21st Century economic and environmental imperatives.

This framework has been based on conducting a comprehensive audit of the resource endowments available within the clearly defined territories – coastal and oceanic – belonging to Nigeria, constructing the underlying regulatory and procedural basis for the further exploration and harnessing of ocean resources, as well as for the extension of the scope of economic activities that depend on the geography and ecology of the ocean.

This includes recognising and integrating the vital concepts of environmental sustainability and biodiversity protection into the framework on the basis of which the Blue Economy is harnessed for development.

For instance, the administration of President Muhammadu Buhari is vigorously pursuing the expansion of the nation’s ports infrastructure through the development of deep-sea ports to be driven by the private sector while plans are at an advanced stage to commence the operations of the single-window project that will enhance delivery and clearing of goods.

Automation

To enable critical stakeholders appreciate the importance of the Blue Economy as a source of wealth for the nation, Dr. Petereside embarked on series of enlightenment programmes on the issue as part of measures to create awareness for it and to make it easy for the country to use its platform to bail out the nation’s economy.

This approach has also come through the organisation of various stakeholders’ fora such as seminars and workshops, to sensitise the relevant audiences on its initiatives on seas and oceans, especially as it concerns the Blue Economy.

As part of the strategy to accelerate the acceptance of the Blue Economy philosophy and encourage stakeholders to key into it, NIMASA has also conferred awards on deserving stakeholders that are contributing to maritime development in Nigeria with a view to encouraging them and others to key into the project.

Another major step taken by NIMASA to drive the Blue Economy is its compliance with the presidential directive on the resumption of 24-hour turnaround time for analysing cargo manifests and issuing debit notes to shipping agents.

Despite that the maritime industry has assisted in boosting the nation’s Gross Domestic Product (GDP) by providing over a 100,000 direct jobs and about two million indirect jobs, its contributions are not even captured by the National Bureau of Statistics (NBS) due to lack of the right technology to achieve this.

However, with the various measures being put in place by the administration of President Muhammadu Buhari, the Minister of Transportation, Rotimi Amaechi, and Dr. Peterside have ensured the development of Nigeria’s Blue Economy which has presented another great opportunity to return the nation to the path of industrialisation, sustainable growth and economic prosperity.

This will among other things make it easy for NBS to capture the contributions of the maritime sector to the GDP of the country to enable those who make use of the figures to grow the economy to achieve better results.

Reform bills

Sequel to the effective interactions with the National Assembly, some of the transport sector reform bills currently before the National Assembly have also been passed, while others are in the process of receiving legislative passage as part of measures to give effect to the proposed reforms aimed at strengthening the relevant maritime agencies for more effective performance.

In this wise, the National Transport Commission (NTC) Bill is expected to provide a regulator for the transport sector, a role which the Nigerian Shippers Council (NSC) is already slated for, has scaled through the hurdle even as it awaits the assent of President Buhari. Ditto for the ports and harbours bills.

Shipping promotion

A key area where the NIMASA management has done so well in the past three years is in shipping promotion as more Nigerians are now getting more involved in the maritime sector and many more are given opportunities in the industry.

Before the current administration, lack of adequate attention to the maritime sector led to low capacity in shipbuilding and repair and forced Nigerian operators to seek services offshore resulting in unprecedented capital flight and loss of opportunities to other maritime nations.

Enabling environment

In driving home its seriousness at creating an enabling environment for the private sector, especially the shipping companies to invest in shipping to promote Blue Economy, Dr. Peterside’s management in NIMASA has succeeded at obtaining government’s commitment for a tax relief regime or a special interest rate for ship owners through the Central Bank of Nigeria (CBN).

These incentives now allow indigenous ship owners to acquire new bottoms or vessels for local shipping trade and gradually build up their fleet at low costs.

Additionally, the agency has stepped up its collaboration with the Nigerian Local Content Development Board (NLCDB) as part of measures to adhere strictly with the NLCDB Act which prescribes a percentage of indigenous participation in all the relevant economic activities of the oil and gas industry.

Lifting of crude oil

NIMASA has also mounted pressure on the Nigerian National Petroleum Corporation (NNPC) with a view to ensuring that ship owners are given the grace and the enablement to participate in the affreignment of Nigeria’s crude. This, when it happens, is expected to boost indigenous capacity, as well as ownership of fleets.

This is borne out of the fact that investments in agriculture, mining, solid minerals and manufacturing will not bring about the required economic self-reliance if the maritime sector remains a mere appendage in a foreign-dominated shipping industry.

Freight rates

The agency’s management in the last three years has undertaken a downward review of the freight rates benchmark in response to operators’ yearnings thus helping to boost shipping and fostering a harmonious regulator-operator relationship. The review resulted in over 30 per cent rise in cargo activities in 2018, compared to the previous years’ figures.

NIMASA has championed a change of terms of trade for the affreightment of Nigerian crude oil from Free on Board (FOB), where the country virtually loses control over the distribution of its crude oil, to Cost Insurance and Freight (CIF), which favours indigenous operators and the domestic economy.

Floating dockyard

The importation of the modular floating dockyard has also been helping to create capacity and help retain multimillion dollars in the country through vessel maintenance and midwifing of the collective bargaining agreement for industrial harmony with improved wages and entitlements for maritime workers.

CVFF

In this wise, the agency, through the Federal Government, has begun to work out modalities for genuine investors to access the Cabotage Vessel Financing Fund (CVFF) in order to boost investment in shipbuilding and repair.

It has also extended work hours for some staff of the agency in the shipping development department. The agency’s offices are also open on weekends in order to accommodate shipping agents willing to do business.

Cabotage Act

The management of NIMASA had right from its inception taken the implementation of the Cabotage Act as a serious matter and has thus given it a lot of attention due to the fact that it considered as a veritable avenue through which it can empower the indigenous shipping companies and make them to boost their contributions to the sector and the economy.

It has also continued to intensify its lobby in conjunction with the Ministry of Transportation to ensure that the amendment of the relevant portions of the act that will boost its implementation is carried out before the winding up of the 8th National Assembly.

Compliance

MIMASA has been working towards the 100 per cent compliance with the Cabotage Act in the areas of the number of vessels doing business in Nigerian waters and flying the national flag; which has risen to over 80 per cent from less than three per cent in 2003, as well as an increase in the building of cabotage vessels compared to when it was dominated by expatriates.

Enforcement

As part of measures to ensure compliance with the provisions of the cabotage regime in Nigeria as enshrined in Section 30 (1) of the Act, NIMASA’s enforcement team has been monitoring vessels, enforcing compliance, as well as penalising defaulters.

Currently, about 524 vessels flying the Nigerian Flag are now registered with NIMASA compared to less than 200 as at 2015 and 477 in 2018. The agency boarded 1,035 vessels in 2018 compared to 861 in 2017. Number of expatriate seafarers on board ships also declined to 7,662 in 2018 from 7,797 in 2017 and 9,678 in 2016, while it detained 45 vessels in 2018 as against 17 and 39 in 2016 and 2107 respectively.

The number of Nigerians manning vessels has also increased. 2,840 Nigerian officers and ratings were recommended to be placed onboard cabotage vessels in 2018 as against 1,789 Nigerian seafarers in the same period in 2017; which is an increase of 58 per cent.

The management is also making robust effort to finally disburse the Cabotage Vessel Finance Fund (CVFF) which will enhance the capacity of indigenous shipping companies and boost the economy.

Waivers

New Cabotage Compliance Strategy (CCS)

In August, 2018, NIMASA introduced a new compliance strategy for cabotage implementation in Nigeria to ensure full enforcement of the Cabotage Act 2003 to secure jobs for qualified Nigerians in the maritime sector.

The new Cabotage Compliance Strategy (CCS) has seen NIMASA ensuring that over 200 seafarers are on board different cabotage vessels.

Also, NIMASA working in synergy with the Nigerian Content Development and Monitoring Board (NCDMB), talks are at an advanced stage to ensure the engagement of over 100 brand new cabotage vessels in the oil and gas industry.

The collaboration between the two agencies has also led to capacity audit of the shipbuilding and repair yards in the country, development of a framework for manpower development for critical skills required in the maritime sector and the development of procedure and template for data collection and analytics for marine vessel utilisation, among other measures.

Revenue

Indeed, NIMASA has shown that it can be a huge revenue earner as it had in the last three years emerged and was recognised by the Federal Executive Council (FEC) as one of the five agencies of government contributing the highest revenue to the Federation Account.

Apart from the fact that its proposed revenue contribution to the Federal Government for 2018 was N109bn, it contributed N9.975bn and $46.025m to the treasury in 2016 – more than 100 per cent increase from the N4.955bn in 2015.

The agency has, however, said it would not look back as it would continue to improve on the level of revenue it will remit to the coffers of the Federal Government flowing from the very effective and efficient manner it has continued to give a boost to the potentials of the Blue Economy.

The increase in NIMASA’s contribution to the Federation Account, analysts say, demonstrates how the Dr. Peterside-led management has been harnessing the resources of the industry for the benefit of the economy, and most importantly, the role the Blue Economy can play in helping the country to diversify its revenue sources.

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