Nigeria Losses $5B to Cabotage Act Flaws - Afolabi

The non-implementation of the Nigerian “Cabotage” law is negatively impacting on the nation’s economy as over 90 per cent of earnings in the maritime industry are cornered by foreign firms, Nigeria CommunicationsWeek can now report.

Dr. Taiwo Afolabi, executive vice chairman and chief executive of Sifax Group said available statistics indicate that an average annual traffic of about 152 million metric tonnes of oil and non-oil cargo, worth over $5billion (about N750 billon) in freight earnings is generated in the country.

He lamented that the non-implementation of the Cabotage Act of 2003 has robbed the country of its benefits.

“Until this issue of cargo rights is addressed, it is my submission that the present controversy raging among the stakeholders concerning the cargo, which has come to sound like the proverbial egg and chicken conundrum, may prove diversionary, useless and nauseating. Out of about 400 vessels that are owned by indigenous operators, over 70 percent of them are reportedly not engaged, allegedly because the vessels are presumed to be unsuitable and need to be put up to standard,” said Afolabi.

He stated that the Cabotage Act if well implemented holds immense benefits for Nigeria.

He listed benefits accruable from the Act to include “establishment of ship building and ship repair yards (dry docking) in Nigeria to build vessels for sale to indigenous shippers; establishment of dredging services for the clearing and maintenance of the 3, 000-kilometre length of inland waterways under the jurisdiction of the National Inland Waterways Authority (NIWA), as well as maintenance dredging of the channel.”

Other benefits include waterfront activities such as port operations, stevedoring, freight forwarding, Customs’ agent, survey and navigation, marine environmental management including waste disposal, haulage and supply service industries involving movement of equipment and fabricated machineries including food service provisions between the offshore platforms and the land locations; and boost to engineering construction industry arising from the increased demand for construction, expansion and repairs of ports, terminals and port access roads.

He called for effective collaboration among stakeholders in the maritime industry to move the sector forward. “Government, on its part, should lead the process and show the way. Already, a good beginning is being made at the National Assembly that offers a ray of hope and the promise of a positive turn-around.

This effort must be strengthened and consolidated. Nigeria’s experience with Cabotage law regime has exposed and underlined one basic fact - it is not just in making the law. Enforcing the law is also critical. All stakeholders must therefore join hands with NIMASA and MDAs to effectively implement the Act,” he said.