As part of the efforts geared towards increasing the internally generated revenue of Nigeria, the House of Representatives has beamed its search light on the maritime sector with the intention of increasing the involvement of Nigerian vessels in trade activities along the nation’s coastal lines. Adesuwa Tsan writes on the plans made by lawmakers to amend the existing cabotage law.
When the seventh assembly was inaugurated, they discussed several challenges in the economy. One of such challenges is the issue of putting the gains of participating in the maritime sector in the hands of Nigerians. Legal luminary and former chairman of the Nigerian Bar Association, Olisa Agbakoba had asked the lawmakers to examine solutions to the issue which lead to the loss of millions of dollars which can be used to further the development of the country. He suggested the lawmakers address this through the amendment of the existing Cabotage Law.
Jointly sponsored by the deputy speaker of the House of Representatives, Hon Emeka Ihedioha and the chairman of the House Committee on Marine Transport, Hon Ifeanyi Ugwanyi, the amendment which scaled second reading on the floor of the House, is aimed at expanding the jurisdiction of the Act to cover all vessels in oil and gas exploration and exploitation activities on or under water as well as all forms of transhipment activities within Nigeria’s domestic waters.
For eight years after the enactment of the Cabotage Law, the purpose of the law failed to yield its desired outcomes, the reason being majorly because of the non-coverage of indigenous vessels in oil and gas off shore operations and other obligations under the law.
It is a global trend for governments to reserve the domestic shipping activities for indigenous participation but the case has not been the same in Nigeria. Thought the government has sought to achieve this aim, cabotage was still largely comprised of foreign operators with foreign built, crewed and flagged vessels.
The 2003 Cabotage law sought to address this issue and develop the nation’s economy as well as the agitation of operators and stakeholders in the sector through the Act by restricting the use of foreign vessels in the Nigerian coastal trade and promoting indigenous tonnage, establishing financing and related matters.
While it looked good on paper, it was a tale of woes for experts in the sector who lamented that the piece of legislature was still deficient and impossible to implement in favour of local companies. One key area they fingered as the problem was the seeming exclusion from jurisdiction of several offshore operations in the Oil and Gas sector as prescribed in the Act.
According to part II of the amendment to the Act prescribed in the clause titled ‘Restricting of Vessels in Domestic Coastal Trade’, “A vessel other than a vessel wholly owned and manned by a Nigerian citizen, built and registered in Nigeria shall not engage in the domestic coastal carriage or cargo and passengers within the coastal, territorial, inland waters, island or any point within the waters of the Exclusive Economic Zone of Nigeria”.
It also adds in clause 4(1) “A tug or vessel not wholly owned by a person who is a Nigerian citizen shall not tow any vessel from or to any port or point in Nigerian Waters, or tow any vessel carrying any substance whatsoever, whether of value or not or any dredge material whether or not has commercial value from a port or point within Nigerian waters”.
Explaining the situation to his colleagues during the lead debate on the general principles of the amendment bill, Ugwanyi stated, “As legislators, we have a duty to contribute our own to the success of the Cabotage in order to bring it in line with other international jurisdictions. The Amendment sought will expand jurisdiction to cover all vessels in oil and gas exploration and exploitation activities on or under water, as well as forms of trans-shipment activities within our domestic waters reflecting the trend of our nation’s oil and gas operations”.
He argued that at a time when the federal government is looking inwards and away from petroleum to sustain its economy, there is a serious need to consciously explore all avenues that will generate income for the national purse. One of such ways to generate a substantial chunk of the needed funds, he continued, can be achieved through participation of Nigerians in the huge shipping and logistics services in the oil and gas sector as statistics show that average cargo traffic of 152 million metric tons worth $5billion is generated in freight earnings annually.
Ugwanyi however regretted that, “As at today, over 90 percent of this income is earned by foreign shipping companies who deny employment opportunities to our seafarers and refuse to make use of our local ship and refuse to invest in local maritime infrastructure development”.
On the intendment of the amendment to the Act, he added that by expanding the jurisdiction of cabotage to cover hitherto excluded operators, it will “open up job opportunities for more Nigerians, increase the nation’s domestic tonnage through mandatory flagging, promote indigenous entrepreneurship and detail development of maritime infrastructure and transfer of technology and ultimately increase the revenue share of the government and people of Nigeria”.
Other reasons have also been adduced for the amendment aside the economic benefits to the country include political and security gains to the country. At a time when the nation is facing challenges of insecurity, there is a need to ensure that cargos ferried within the shores of the country are in the hands of Nigerians and subject to the necessary checks by local authorities.
Recent revelations by the House of Representatives probe panel that investigated the fuel subsidy regime of the federal government showed that most of the coastal and shipping activities involved in the importation of fuel were carried out by foreign shipping lines while local shipping companies could not even participate in the internal haulage of products. This is part of the ways the House believes that such imbalances will be addressed in the future.