The Nigerian Maritime Industry: Prospects, Challenges and Solutions by Olamide Animashaun
The maritime industry includes all enterprises engaged in the business of designing, constructing, manufacturing, acquiring, operating, supplying, repairing and/or maintaining vessels, or component parts thereof: of managing and/or operating shipping lines, stevedoring and customs brokerage services, shipyards, dry docks, marine railways, marine repair shops, shipping and freight forwarding services and similar enterprises. The industry in its strict sense embraces all the maritime related business activities which take place within the country’s maritime environment.[1] These include offshore economic activities such as fishing, salvage, towage, underwater resources and on-shore economic activities such as port activities, maritime transport (shipping), ship construction, repairs and maintenance activities.[2]
As at 1960, the maritime industry was largely undeveloped.[3] During that time the major seaports were in Lagos and Port Harcourt and it cannot be an underestimated fact that two ports were not enough to manage Nigeria’s shipping and maritime activities. There were a lot of great problems that plagued the ports during this era which are inclusive but not limited to Inadequate berthing space, government policies and inconsistencies, dock labour problems, inadequate maintenance of existing facilities, Vessel delay problems, Inadequate finance and funding of ports operations by the government especially in the area of port infrastructure, Proliferation of government agencies in port activities, manpower and unprofessionalism problems and more. The government continued to intensify their efforts through the Nigerian Ports Authority (NPA) in order to further improve the quality of the maritime industry. Thus, the NPA continued the expansion of existing port facilities at Lagos and Port Harcourt in accordance with the first National Development Plan of 1962 –1968.[4] During the Nigerian civil war, more problems arose and this led to the shutdown of the Port Harcourt port and most of the commercial maritime activities in most of Nigeria’s inland waters were brought to an end. Thus, the port in Lagos became the only operating seaport in Nigeria. This caused port congestion problems.
Towards the end of the civil war in 1969 the federal the military government empowered the NPA to acquire the ports of Warri, Burutu and Calabar which were then under private control and by the end of the war, the government commenced the reconstruction of ports in accordance with the Second National Development Plan of 1970 –1974.[5] These initiatives did not make much effort in curbing the problems of the Nigerian Maritime industry at that time and the other ports were not significantly involved in the participation of maritime activities during the war and after. The problems of congestion at the Lagos ports greatly increased and this affected the industry greatly. To curb this, the government embarked on more projects to construct new ports and expand the capacity of existing ports. This led to the establishment of new ports in Tin Can Island, Warri and Calabar. The local content in terms of fleet development were also improved and Nigeria had over 24 vessels in her national fleet by the early 1980’s under the management of the Nigerian National Shipping Line (NNSL). Although the government made efforts to increase the development and performance of the maritime industry, there is still a very long way to go in making the maritime sector in Nigeria one of the best in the world.
OUTLINE OF SOME LEGAL & REGULATORY FRAMEWORKS IN THE MARITIME INDUSTRY.
They include but are not limited to:
- Nigerian Maritime Administration and Safety Agency (NIMASA) Act 2007
- The Coastal and Inland Shipping (Cabotage) Act 2003.
- Nigerian Ports Authority (NPA) Act 1954
- Merchant Shipping Act 2007.
- Merchant Shipping Timber Cargo Regulations 2010
- Merchant Shipping Pilot Ladders Regulations 2010
- Merchant Shipping Tonnage Regulations 2010
- Safe Man Hours Work and Watch keep Regulations 2010
- Merchant Shipping Manning Regulations 2010
- Merchant Shipping Marine Boards Regulations 2010
- Merchant Shipping Musters Regulations 2010
- MSR Crew Accommodation Regulations 2010
There are currently some bills pending before the National Assembly capable of affecting the maritime industry when passed. They include: The Anti-piracy Bill; the Establishment of the Nigerian Marine Development Bank Bill; Inland Fisheries Act (Amendment) Bill 2017; the Deep Offshore and Inland Basin Production Sharing Contract (Amendment) Bill 2016; and the Cabotage Act (Amendment Bill) 2017.[6] The government is the first pint of call for development in the Nigerian Maritime Industry. According to Badejo, in order to ensure that the industry remains functional and responsive to Nigeria’s needs, the government has a role to play in each of the following policy areas Regulation, control and licensing, Monitoring and implementation of set goals, Provision and maintenance of infrastructure, Standardization and harmonization of port operations, Provision of an enabling environment for all maritime actors and stakeholders, Provision of fund, collateral and finance in such a manner that maritime goals and objectives for the country can be realised, Initiation, implementation and coordination of maritime policies within the context of a national transport policy and the socioeconomic thrust of the government, Acting as intermediary for maritime operators on international issues and Protecting indigenous maritime operators in such a way that incremental growth and development of the sector can be achieved. [7]
CHALLENGES OF THE NIGERIAN MARITIME SECTOR.
- SEA PIRACY PROBLEMS: According to the International Maritime Bureau, around 73% of the global kidnappings and hostages are attributed to the West African Region. According to UNODC, the total cost of piracy is 777.1 million dollars annually between 2015 and 2017 in addition to human cost and this is greatly affecting the shipping Sector as stakeholders and investors are not contributing to the industry due to this security problems. However, the government has introduced the Anti-Piracy bill in June 2019 and the purpose of the bill is to ensure safe and secure shipping on Nigeria waters, prosecute infractions and criminalize piracy according to NIMASA.
- PORT CONGESTION AND TRAFFIC: Omole[8] opined that the takeover of the port’s terminals by concessionaires, over the recent years, have really increased the container traffic process and therefore improved cargo throughput at the end. Ndikom[9] opined that, over the years, the port industry had indeed faced different challenges of serious insecurity problems both at the ports of origin and destination. He also maintained that, it is on record that, some essential goods with high premium have been lost due largely to insecurity of cargo in the ports. Folarin[10] believed, over the years, the shipping industry was totally confronted with problems in relation to loading and offloading of goods, due largely to the nature of the packaging and arrangement of goods and the manner they were obviously conveyed. He maintained that, this reflected in the slow process of operations in both loading and discharging points; thereby affecting vessel’s turn-round time.
- IMPROPER IMPLEMENTATION OF GOVERNMENT POLICIES: Over the years, the maritime industry has been badly hit by several government policy summersaults or policy inconsistencies, which by nature are very abrasive and reflecting some level of negative impacts both in the productivity and operational efficiency of the sub-system of the entire economy.
- MANAGERIAL INCOMPETENCE: Since 1960, it is regrettable to note that, the operational performance, productivity and overall administration of this vital sub-sector, has also been left to the whims and caprices of unprofessional managers, who know nothing about the challenges of the industry. It is said to state here that, this is the only industry that promotes mediocrity and unprofessional excellence as to the way and manner issues of this industry has been directed over the years.[11]
- UNFRIENDLY OPERATIONAL ENVIRONMENT: Over these years, the industry has been very unfriendly in outlook to its investors, users and stakeholders due largely to some of the unfriendly policies enunciated by successive government of the day, which have been very hostile and abrasive in nature and also affecting and impacting negatively on the growth, operational modalities and development of the industry.
- MANPOWER PROBLEMS/UNPROFESSIONALISM: Over the years, the maritime-transport subsector has suffered from multiple problems of inadequate funding, lack of government support and policy inconsistencies, as this is one industry by its nature and outlook, is capital and labour intensive. Some of the issues that have bedevilled the industry over the years, stems out from lack of manpower and lack of professionals within the system which have impacted negatively on its growth, operational modalities and performance. Note that, the industry is Labour and capital intensive one. Over the last two decades, the number of staff employed directly and indirectly is less ten (10,000) thousand workforce which is a far cry to what is required.[12]
- LACK OF HOLISTIC INSTITUTIONAL FRAMEWORK: The industry operates within the confines of an international rules and regulations that respect the tenets of a holistic institutional framework. Most nations in Africa are developing and do not have the needed capital to develop and establish an enduring holistic institutional framework that will help them achieve optimal benefits from the maritime ports industry. [13]
- LACK OF FUNDING AND GOVERNMENT SUPPORT: Over the years, the maritime industry has been stiffened by insufficient funding leading to gross inefficiency and lack of effectiveness in the management of the shipping and maritime industry services at the end.
- LACK OF OPERATIONAL SHIPPING POLICY: The lack of an operational shipping policy framework has brought some form of crisis in terms of holding some level of trust and confidence in the operations of the industry. This is a recipe for underdevelopment and inefficiency of the national economy. This lack of an operational shipping policy framework has also ignited an attitude of nonchalance among operators, stake-holders, ship-owners, ship agents, and freight forwarders, also hell has let lose within the confines of the operational system, as there is no policy reprimand for offenders and this has affected negative impacts in the operational modalities of the system.[14]
- HIGH TARIFF SYNDROME AND STAKE HOLDERS’ ANTICS: The problem of exorbitant tariffs and rates affect the efficiency of and operational performance of the shipping industry. This is because over the years, this has led to fraudulent and sharp practices by importers, exporters and freight forwarders. It has also led to the diversion of Nigerian bound cargo to ports of neighbouring countries in the central and West African sub region. Despite the various port reforms of government over the last two decades, tariffs and rates in Nigeria remain very high and in affordable; it is still the highest in the West and Central African sub region. This greatly affects the operational efficiency of the profession and the industry. Also, it has denied Nigerian ports, their rightful status of being the hub of West and central African sub-region in terms of freight movements, distribution and transhipments. [15]
- GOALPOST POLICY SHIFT OF GOVERNMENT: The frequent shift in policy direction of government in issues regarding shipping as a critical industry, (such as pre-shipment and destination inspection regimes), over the years, is a serious problem militating against the growth and development of the industry. The speed and frequency at which these major policies are twisted, changed and/or reversed, often without clear pronouncements, have led to confusion among freight forwarders, clearing and forwarding agents and other stake holders. These frequent changes in policies have greatly hampered growth within the industry. The government should know the dangers inherent in such changes and goal post policy shifting and therefore takes steps to establish sustainable policies in the industry.[16]
- OPERATIONAL VICES AND SHARP PRACTICES: The lack of an enduring maritime policy framework has over the years, ignited some operational vices and sharp practices in the industry, which culminated in under-declaration, under invoicing, concealment, falsification of documents, importation of contrabands and so on. This ultimately leads to capital flight and economic sabotage. These have affected negatively the operational performance of the entire maritime industry.[17]
- LACK OF OPERATIONAL KNOWLEDGE AND EDUCATION: It is regrettable to note here that, most operations and stakeholders in the shipping/maritime industry lack the basic operational knowledge and education to function effectively, efficiently and optimally, hence according mediocrity, unprofessionalism and non-excellence the pride of place in a community where almost 70% of the operators and stakeholders are acute illiterates. This has over the years, affected the operational performance, output and value-added services within the confines of the shipping-maritime industry environment.
SOLUTIONS TO SOME OF THESE PROBLEMS.
- Efficient implementation of government policies.
- Incorporation of professionals Staff into the Maritime Industry to curb the manpower shortage in the industry.
- Abolition of harsh or hostile government policies to welcome investors and stakeholders in order to develop the sector.
- Disbursement of Adequate funds by the Government to the Sector to enhance and develop the industry as the problem of inadequate finance is a major problem of the Maritime Sector in Nigeria.
- Creation of a standard operational shipping policy.
- Reduction of the high tariff rates and provision of educational knowledge of Maritime in more higher institutions.
- To curb concessioning and container traffic, it is recommended that the government should make frantic efforts to seriously ensure that both rail line and rail sidings should be connected to each of the inland Container Depots across the six geo-political zones of the country at the end of the day. This is because, these infrastructural facilities if achieved will resolve the problems of port congestion, thereby increasing port’s output, productivity and efficiency of the port system.[18] It is also recommended that, the Government should as a matter of policy through the supervisory coordination of the Nigerian Shipper’s Council to ensure that all the approved ICDs should be functional in terms of effective operational modality through the effective rail movements of these goods to the ICDs as expected.[19] This will serve as a fillip to the efficient functioning of our ports system at the end of the day. he Nigerian Port Authority (NPA and other relevant agencies should maintain and employ more equipment for cargo operations as it is necessary for the facilitation of port effectiveness and there should be constant and consistent dredging and maintenance of the waterways, port terminals and other facilities as it will enhance sub-regional transhipment trade in the country. There should be adequate port security to avoid unnecessary breakdown of operations and other fraudulent activities within the port.[20]
- Effective implementation and Enforcement of the Anti-Piracy bill.
CONCLUSION
The government has taken some appropriate measures to curb the various problems plagued with the Nigerian Maritime Industry. However, Nigeria still has a long way to go in making its maritime sector rank one of the world’s best maritime sectors in the world. Various solutions have been proffered but the government boldly turns a blind eye to these resolutions. It is important for the government to take these solutions into consideration as the maritime sector in Nigeria is one of the most important sectors that should not be ignored as it is a major factor for developing the country itself.
Animashaun Olamide Ololade is a Final Year student of the Faculty of Law, University of Lagos. She has a keen interest in Dispute Resolution and is an Associate Member of the Institute of Chartered Mediators and Conciliators of Nigeria. She is the current Director of Research of the Maritime Forum Unilag and she has also attained a certification from Harvard University’s
Copyright X program. Olamide has interned in prestigious firms such as Banwo and Ighodalo, Aluko and Oyebode amongst others. She has also participated both in delegate and Staff capacity at Various Model United Nations regionally in Lagos and Ghana and internationally in the United States. She is a seasoned writer and has been featured on Lawyard occasionally and Unilag Law Review and has been an Editor-in-Chief for an online and print publication. She is the immediate past Public Relations Officer of the Law Students Society. She has also maintained a good academic standing throughout her stay in school till date. She is driven by
excellence and aspires to be an expert in Dispute Resolution.
[1] Impact of shipping on Nigerian Maritime Economy: Implication for sustainable development – Ekpo Imoh Ekpo
[2] Ibid.
[3] How has the Nigerian Maritime Industry performed in the last 50 years? – Orji Chukwuma Jerume.
[4] Ibid.
[5] Ibid
[6] https://www.proshareng.com/news/TRANSPORTATION/Nigeria-Maritime-Industry/43571
[7] Badejo 1997
[8] 2004.
[9] 2011
[10] 2009
[11] CRITICAL ASSESSMENT OF MARITIME INDUSTRY IN NIGERIA: CHALLENGES AND PROSPECTS OF POLICY ISSUES. – Ndikom Obed, B. C. 2Buhari, S.O, 3Okeke, O.K, and 4 Matthew W Samuel
[12] Ibid
[13] Ibid
[14] Ibid
[15] Ibid
[16] Ndikom 2010
[17] Gwandu 2000
[18] file:///C:/Users/supertolu/Downloads/361-1060-1-PB.pdf
[19] Ibid.
[20] Ibid.
