In 2023, there are lot of expectations from maritime stakeholders on the federal government. Though, President Muhammadu Buhari’s administration will ends its 8-year tenure by May 29th 2023, it is, however, difficult to predict if the low hanging fruits the minister of Transportation, Engr Mu’azu Sambo, promised stakeholders can be picked before the end of the year.
For instance, the minister promised to disburse CVFF, create National Transport Policy (NTP) for the transportation sector. Also, the industry expect the commercial operation of Lekki Deep seaport even though there are teething problems such as poor cargo evacuation plan. Though, despite the poor evacuation plan, the port has so much potentials to turn the nation’s shipping sector around especially with the planned disbursement of CVFF that will boost transhipment and increase Cabotage trade.
Also, the campaign for the removal of War Risk Surcharge on Nigerian bound cargoes and vessels and as well as linking the standard guage to the Apapa port.
Will these and many more be possible before May 23rd or the end of the year? Only time will tell.
CVFF Disbursement To Local Shipowners ,
One of the things that stakeholders in the maritime sector will want to come to pass is a disbursement of the Cabotage Vessels Finance Fund (CVFF), false disbursement of CVFF for local ship owners who have been struggling in the nation’s Marítime sector.
The CVFF, has been a tool of political manipulation by previous government that the planned disbursement by the current Minister of Transportation, Engr Mu’azu Sambo, sent frenzy down the spines of industry stakeholders with many seeing it as sign of a better tommorrow for the sector and others seeing it as another political announcement in a buildup to election.
The minister, had disclosed that, President Muhammadu Buhari, approved the disbursement of $350million CVFF to local Shipowners, saying five banks, Zenith, Polaris, United Bank for Africa (UBA), Union and Jaiz are the Primary Lending Institutions (PLI), for the disbursement of the fund.
The transportation minister said President Buhari, further approved that the fund should be further disbursed to shipowners immediately it hit $50million threshold in the Treasury Single Account (TSA).
Sambo said “President Muhammadu Buhari has approved my request for the disbursement of the CVFF Fund. Finally, we are breaking the 17-year old jinx.” He continued, “we have made a case that the fund belongs to the Nigerian shipowners and the president who is a respecter of the law, therefore, approved the disbursement of the fund with immediate effect.”
But, stakeholders have expressed pessimism even as they called for auditing of the fund.
According to the Nigerian Shipowners’ Association (NISA), the fund accrued into CVFF so far has grown to over $2billion.
The chairman Board of Trustees (BoT), Chief Issac Jolapamo, stated that indigenous Shipowners would have contributed more than $2billion to the fund in the last 17 years, saying $350 million cannot fund acquisition of 6 vessels.
According to him, it was the former Minister of State for Transportation, Sen. Gbemisola Saraki that revealed that the fund contributed so far was around $350 million which was against figures released by previous ministers.
His words, “It was because the former minister of state for Transportation, Sen. Gbemisola Saraki, that mentioned $350 million that changed the narrative. Nobody has ever mentioned a figure higher than $150 or $190 million.
For me who knows from the beginning an idea of how much the money is, the money is minimum, nothing less than $2 billion. And we want to get to the root of it. Where is the money? $350 million dollars will not do us anything. It can not even buy six ships. So, if we have waited for 17, or 18 years, we should know if anybody has dipped his hands in the money. We need to get to know.
Also speaking, the managing director, JAPAUL Oil and Maritime Service Limited, Paul Jegede, said it is not enough to be excited about the disbursement of the fund but, auditing must be carried out to know the exact amount that has been contributed by Shipowners.
Jegede who also noted that, against the general claim that it belongs to the government, the fund belongs to the Shipowners. He also urged the Federal Government to consult the contributors for suggestions which will inform the modalities to disburse the fund.
“The first step is to really know how much is the fund. This is because we’ve had different figures from different Ministers. Some will say it is just $200 million, others will say, $400 million. And this has been on for more than 17 years.
money?
“Another thing is, what are the modalities for sharing this money among the contributors? This money belongs to shipowners. It is the proceeds from shipowners’ contracts. It is not government money.
“So, we need to know how much and they need to give shipowners the opportunity to come out with suggestions on the modalities for disbursement so that nobody is cheated. So that you don’t find a situation whereby a company that is just two or three years taking part of the money, using political influence. That will not be right. Another thing to consider is that the Minister that is presenting CVFF for disbursement is not a full-fledged Maritime person. So, recommendations from shipowners are important to make it meaningful.”
Apapa Port Linkage To Standard Gauge
Also, several months after the completion of the standard guage rail line, the multi-billion dollars infrastructure hasn’t been linked to the nation’s premier port, Apapa.
This is coming despite FG’s assurance that the standard gauge rail line will be linked to Apapa port for cargo evacuation by July 2022, the standard gauge line is yet to be linked to the port for cargo evacuation.
The non-linkage of the rail to the seaport, according to stakeholders, have led to congestion in the port and fuelling traffic on the port access road as larger percentage of cargoes are being evacuated out of the seaport by road.
Though, the former minster of state for Transportation, Sen. Gbemisola Saraki, identified the building housing the Nigeria Customs Service (NCS), scanners as the facility obstructing the linkage but demolishing the building have taken so long.
She had stated that the FMOT will demolish the Nigeria Customs Service (NSC) building sitting along the rail gauge track inside the AP Muller Terminal Apapa, frustrating evacuation of cargoes in the port.
“We want to ensure that before the end of next month, the activities here have improved and by the end of this month, we want to ensure that the removal of this Customs facility, which is on the rail track, is resolved. The goal is to have this track operational by the end of July 2022,” she said
Recall that the deputy managing director, China Civil Engineering Construction Corporation (CCECC), Xia Lijun, said the building was the major reason why cargo evacuation by rail on the standard gauge trains had not commenced services inside the terminal.
He said for the past three years, several efforts made at removing the building sitting along the rail gauge track has been futile
Viable Options For Cargo Evacuation From Lekki Port
Before the end of January 2023, President Muhammadu Buhari, is expected to commission the $1.5billion Lekki Deep Seaport while the port will commence commercial operations before the end of the first quarter of 2023.
The port which was described as a game changer by relevant stakeholders and expected to help turn Nigeria into shipping hub in West and Central Africa as well as help reclaim lost transit cargoes from Ghana, Togo and Benin Republic.
However, the poor evacuation plan of the deep seaport have been a source of concern to major stakeholders who opined that the poor evacuation plan will stunt the capacity of the deep seaport.
But, will government, stakeholders and promoters of the project unanimously agree to design an evacuation plan that will make the seaport viable whenever it begins commercial operations by 2023?
Ending War Risk Surcharge By End 2023
Since 2021, the federal government has been campaigning against continued war Risk surcharge by foreign insurers on Nigeria bound cargoes and vessels.
The campaign against the surcharge was premised on the fact that piracy in the Gulf of Guinea (GoG), and coastal water has gone down drastically due to the implementation of the Integrated National Security and Waterways Protection Infrastructure, also known as the Deep Blue Project, by the Nigerian Marítime Administration and Safety Agency (NIMASA).
According to the director general of NIMASA, Dr Bashir Jamoh, continued war risk surcharge of Nigerian-bound cargoes is the reason why goods are so expensive.
He, however, called on major insurance companies around the world and Lloyd of London to stop the collection of the War Risk Insurance premium on Nigeria bound cargoes.
According to him, Nigeria is deserving of consideration for the removal of the war risk insurance from vessels and goods destined for Nigeriaas the country has done so much to stamp out piracy on its territorial waters and the Gulf of Guinea.
“So, the international community will be reciprocating the achievement Nigeria has recorded in the fight against piracy using the innovative deep blue project. That is the message I am taking to the world,” Jamoh said.
The NIMASA boss further disclosed that since inception of the deep blue project, Nigeria has maintained a zero pirate attack, adding that the two recent pirate incidents on the Nigerian waters were unsuccessful.
Jamoh further disclosed that the imposition of the war risk insurance on all Nigerian bound cargoes was a deadly blow on the economy as its negative impact on cost of goods is felt by all sundry.
However, stakeholders are hopeful that the government will successfully pursue and see to Nigeria being delisted from countries whose water are dangerous by ending war Risk Surcharge on vessels and cargoes coming to the country.
