Four years of operating the Cabotage regime and two years of Port Concessioning, Maritime Lawyer and Indigenous ship owner, Mr. Dania Tony hails government policy but says it can be better. He gave interesting and informed commentary about the Nigerian maritime industry in this unusual interview with Ships & Ports' Zino Akpor.
How would you assess the Nigerian Maritime industry, has there been a significant growth over the years?
The maritime industry in Nigeria has recently witnessed some positive growth but the level of development is still very low, I believe we can do more. The problem is that the institution that is supposed to take the lead, that is the Federal government is unnecessarily politicizing appointments into key maritime positions in federal government maritime agencies which is not good. I don't think any director general has served for up to five years in the National Maritime Authority (NMA) before it was changed to Nigerian Maritime Administration and Safety Agency (NIMASA). They are always changing them because of political reasons. I hope that current the DG will be allowed to stay because he seems to be focused.
Having said that, maritime transactions are very expensive and capital intensive such that it is difficult for individuals to go into it, the Federal government said about four years ago under the Obasanjo government that they are going to establish a maritime bank for one billion dollars. This calls for a lot of positive excitements among players and stakeholders but up till now nothing has happened.
I am also aware that under the International Maritime Organization (IMO), there are some banks you can draw down on but our local banks have not started exploiting this especially the acquisition of maritime equipment like ships. Three times within a year you just needed to share the evidence that you granted not less than ten years to each of the companies that acquired these vessels or ships through your banks and apply for the fund because you have access to the fund but I don't know of how many banks in Nigeria that are doing this. Anyway the development in the Nigerian maritime industry has been good considering the fact that earlier formulators of our maritime policies with due respect made collective mistakes. They forgot the fact that we have so much oil here and we are an import dependant country and will need vessels. If they had formulated policies that encouraged local acquisition of vessels by now Nigeria will be like Mexico, Demark and Singapore. These are all maritime nations but all in all I think we can still do more.
You just said that our earlier maritime policy formulators made a lot of mistakes. What are the mistakes?
They are supposed to know that it is expensive to invest in the maritime industry, if they had put an enabling environment in place indigenous vessel owners would have acquired more vessels easily .We would have had more knowledgeable maritime personnel to be engaged in the maritime industry, we would have had those who have the expertise to run maritime equipment in this country, we would have had more vessels in this country. Let me tell you the moment you own a vessel internationally you are likely to own more. There is no vessel owner outside this country that owns less than three vessels because the moment you are chartering out one the people who are coming for that same one will put you in a position to get your bank to supplement what you already have to acquire another vessel and before you know it you'll acquire more vessels. We don't have that kind of arrangement in place.
Also if you look at what happened to the Nigerian National shipping Line (NNSL), look at the history of its establishment.
What happened to it?
A vessel or ship is supposed to last for not less than 100 years. When was NNSL established? When did it die? What happened to it? Most of the vessels that are trading here are vessels that have stayed in Europe for not less than 40 to 50 years and they are brought here to trade. They did not create the enabling environment, they did not properly advise the government to look at this Cabotage thing though it is a nice decision but it came late. Cabotage ought to have been establish during the era of Gowon; by now we would be talking like the Americans, by now we would have been saying if your vessel is less than ten years you cannot enter Nigerian waters but today any vessel enters Nigerians waters no matter the age. If that had been done Nigerians would have been encouraged to own super tankers that we will be used in carrying our crude oil from Nigeria to wherever they will take them for refining. All these were the mistakes the earlier policy formulators made in our maritime industry.
What major development can you point to in our maritime industry as at today?
Before now what you see among the banks for instance is energy desk but now you are hearing things like maritime desk. That is an encouragement but even at that there is this dearth of knowledgeable personnel in the banks because you cannot talk of an industry like maritime without mentioning the banks. You need the bank to finance your projects that is part of the development I am talking about ,because the banks are now ready to finance vessel acquisition though they will give you a tenure of about three to four years which is too small, ordinarily you are supposed to be given a tenure of not less than 7-10 years.
For instance if you want to buy a property you are usually given a period of ten years to pay and I think the banks can give that same time frame to enable investors pay back for their vessels. Also NIMASA has began to sectionalize various aspects of maritime activities, they want to make registration of vessels very simple, they want to make monitoring of vessels very easy. I have been contacted by their counsel who has asked us to assist in reaching out to vessel owners and they are taking a census of the number of ships owned by Nigerians that is a development. They are involved in the removal wrecks from our water that is a positive development, they are also monitoring maritime activities before now Nigeria waters is a maker of salt for all kinds of maritime activity but it is no longer like that so NIMASA is doing its best I think if they have more autonomy than they now have and if they are allowed to generate fund instead of relying on the government while the government only monitors them, it will go a long way to help the nation's shipping sector and then the director general should be allowed to stay and evolve a system that will sustain not only the authority but also help in streamlining maritime formalities when it comes to permits, change of vessel ownership, registration of vessels , mortgaging vessels, conditional survey, flagging of vessel, acquisition of temporary permit all these should be made very easy. So we need somebody that will overhaul all the departments of NIMASA and evolve a system that will sustain itself even when his tenure has ended.
Do you think that the introduction of Cabotage is a step in the right direction despite your assertion that it came very late?
The Cabotage is a very bright and positive step in the right direction, because now the federal government is beginning to realize the fact that the maritime industry in Nigeria has not been exploited up to thirty percent. If it is fully exploited the fund it will generate will almost surpass what the oil is presently generating.
Do you know, for instance, that to hire a super tanker of about 200,000 metric tons that will carry crude oil from Nigeria to America is not less than $90,000 per day? So if the cabotage came up that time when we had oil boom and once there is oil boom you need ships to carry oil rather we were allowing foreign ships to come in and take the oil, so if the cabotage had been established at that time Nigerians would have gotten used to it. Foreigners operating in our territorial waters would have gotten used to it by now we would have been enjoying like other countries of the world are doing. That is why I said it would have come up much earlier than when it came. It is alright but people need to be mobilized to effectively implement the tenets of the cabotage otherwise the aim will be defeated.
Let me quickly point out something; the cabotage is not meant for indigenous ship owners alone because I notice a trend that is being established now, the cabotage is being taken to mean the empowerment of the umbrella body of the indigenous ship owners. That body just like any other body that has interest in the maritime industry or any other stakeholder could advise the authority in charge of implementing the cabotage tenet on what to do. Anybody can only guide and advice on the cabotage. So the cabotage regime needs effective implementation those who are in charge of executing the content of the cabotage should not look at ways to circumvent the content of the cabotage otherwise the essence will be defeated. Whatever the cabotage contains, it is in the interest of this country and the industry if anybody needs to operate a vessel in this country that is not owned by a Nigerian let the person go and take permit as stated in the cabotage. I still notice foreign vessels trading in our waters. In a nutshell the cabotage is good , it is gradually helping out and I know that foreign vessels that are coming here to trade will first of all think of the fact that Nigeria now has a cabotage law and will want to comply with the provisions of the cabotage law.
It's barely two years now that the Nigerian ports were concessioned to private investors known as terminal operators. How would you rate their performance so far?
The concessionaires are private investors. This is in line with the privatization policy of the federal government under Obasanjo most of which were unnecessarily politicized and some flaws have been noticed by one investigative panel or the other but however I must say that even though a lot of politicking took place the concession was good. The Concessionaires are doing well if you enter the Tin-can port you see a lot of improvement. The concession should be allowed to stay because it will help to reduce the rate of corruption; it will reduce ghost workers and help maritime activity to speed up because as a private investor you are interested in keeping your customers but before now any person can do anything. So I think the concession is OK and then it is speeding up the clearing of goods and containers at the port, it has also made the port environment cleaner and better than it used to be. We have more light now if you go there at night they work. But before now you only hear that there is 24 hours activity at the port, most of the time you call somebody and you hear that he or she has gone home but as it is now with time we will be having 48 hours cargo clearance the moment customs agrees to move in line with the new system .All in all I think the concession has added value to port operation.
Of recent the army and the civil defence have been involved in the arrest of vessels, how do you react to this?
I heard about one when some soldiers were said to have joined members of the Civil Defence Corps to arrest people and vessels at the jetties. That is wrong. If the Navy is not informed or involved and if the Nigerian Maritime police are not involved, and NIMASA is not involved, the civil defence or the army does not have any right to go into the Nigerian water. Why NIMASA and the Navy need to be involved in the arrest of vessel is because you need to have people who have maritime knowledge of vessels to be on the waters because there could be problem on the water. I am very sure that the Navy may not be aware of that incident. Well! I noticed too that everybody is silent about it, that the soldiers and the civil defence are going to the jetties to arrest vessels. The authorities are silent but I think that it is wrong. If the soldiers want to supplement the security arrangement put in place to check criminal activities on our waters they must necessarily go through the marine police or the navy or the NIMASA security department.
What do you think about maritime finance in Nigeria?
There has been a significant improvement in terms of finance but the truth is that the banks are still shying away from maritime investment because to them it is a technical thing. They are also afraid of the sea because a banker will ask you what happened when the vessel is in the high sea where I cannot reach her but the problem is not as serious as that. Maritime Investment is a very good investment, the problem with the banks is that they tell you that this man is heading marine but the man that is heading marine will not even know about marine so he will be attending to marine matter as if he is attending to a normal credit transaction but they don't understand that the moment you have a very good insurance in place you have covered a very good part of your risk, the moment you confirm the activity or transaction for which the vessel will be engaged you have also taken care of a good part of your risk. The banks should invest in the sector, it is not only vessel or ship that you have in the maritime sector you have other equipment we have tug boats, pedals, speed boats, ferries, water badges used in supplying water and a host of others. So the banks should not be afraid in investing in the sector because the sector is not volatile.