As President Muhammadu Buhari celebrates one year in office, the maritime industry was yet to feel the impact of the policies and actions of his administration in the maritime industry. BABALOLA YUSUF writes
Sunday, May 29th, 2016 makes it one year President Muhammadu Buhari assumed office for the second time as leader of the most populous black nation in the world. Buhari assumed office on the platform of the All Progressive Congress (APC) with barrage of promise that include implementation and review of policies that have stunted the growth of the maritime industry.
In line with the change mantra that propelled APC to power, expectations were high that every sector would witness drastic changes that would immediately restore Nigeria’s lost glory in all facets of life. The case of maritime industry was not different as stakeholders and operators also hoped for a quick restoration of Nigeria’s lost pride in the maritime sector
Unfortunately, one year is here already but most Nigerians seem not satisfied with what they have seen so far in the maritime sector under the present administration. There is no gainsaying to the fact that one year down the line, we can say President Buhari has done little or nothing to meet the high expectations of stakeholders and operators in the maritime industry.
Uncertainty over implementation of Auto policy
The National Automotive Policy is part of Federal Government’s response to the seeming uncontrolled influx of substandard and overaged vehicles into the country. The Government also believes that such influx contributes significantly in depleting the nation’s scarce foreign exchange. It was on the basis of this that the policy, which was first introduced in the 2013 fiscal year, proposed 70 per cent tariff on all Fully Built Units, FBU, of vehicles. This comprises 35 per cent levy and another 35 per cent duty on fully built vehicles imported outside the policy, while importers of Semi Knocked Down, SKD, parts are to enjoy 10 per cent tariff and five per cent tariff on other categories of SKD.
The policy also provides for zero per cent tariff on Completely Knocked Down, CKD, and capital equipment used in auto assembly parts, which is in line with the government’s policy of encouraging locally assembling of vehicles as against the importation of fully built units and other used vehicles with attendant capital flight. The first leg of the policy, which imposed the 35 per cent duty on all FBUs has taken effect since January 1, 2015, which led to an appreciable rise in the price of vehicles, including used ones popularly called ‘Tokunbo’ while the second leg, which consists of the 35 per cent levy, which was billed to take effect July, 1, 2015 is yet to takeoff.
However, in what appeared a relief to most stakeholders, the President Buhari-led government indicated that it would undertake a holistic review of the policy to make it implementable and realistic, given the current state of infrastructure, especially public power supply, which many believe might not support such power driven industry. The Vice-President, Prof. Yemi Osinbajo, had said that the government was working on plans to review the nation’s automotive policy introduced by the immediate past administration. Osinbajo, who gave the hint at the 2015 edition of Abuja International Trade Fair and exhibition, which held in the last quarter of the year, admitted that government was aware that low patronage was one of the challenges confronting the domestic automobile industry in Nigeria.
But, a year after the government is yet to make any further pronouncement on the proposed review, a development that has put the policy in limbo while many stakeholders, including vehicle importers and even assembly plants have been put in a permanent suspense, which many of them believed was not good enough for the economy.
CBN forex policy hampering Customs revenue
The revenue profile of the Nigerian Customs Service has continue to nosedive since the Cerntral Bank of Nigeria (CBN) introduced policy in 2015 to ban about 41 items from accessing the foreign exchange market.
The policy had however affected Revenue generation of the Nigeria Customs Service that the Cusatoms CG complained that the service lost over N230bn in the last quarter of 2015.
He attributed the shortfall to the Central Bank of Nigeria’s (CBN) policies, adding that service pleaded for sympathetic consideration by the CBN to review the policies.
Also recently, the Zonal Coordinator in charge of Zone ‘A’ of the Nigeria Customs Service, Assistant Comptroller General, Charles Edike has lamented that restriction placed on some 41 items is jeopardising the revenue target drive of commands in the Zone.
According to him the zone contributes the largest part of the overall customs revenue but since the restriction of forex placed on the 41 items, it has significantly affected customs revenue.
“The Customs revenue for this year is not doing well as we would want to and that is because of certain policies that are in place like the 41 items removed from the foreign exchange transactions. Those items would have generated revenue for customs but they have been removed from accessing forex and cannot participate in forex transactions. That is basically hampering our customs duty collection,” he said.
Uncertain future Seafarers still lack seatime
Seafarers from MAN, Oron, Nigerian Seafarers Development Programme of the Nigeria (NSDP) still face uncertain future because they lack seatime.
NSDP which has seen many young Nigerians beginning a career in seafaring, but the comment of the Nigerian Association of Master Mariners (NAMM) that the programme has failed to meet the yearning of the maritime sector for qualified seafarers is nothing but the truth.
President of the association, Captain Olopoenia has knocked both the NSDP and its promoter, NIMASA and demanded a total re-appraisal of the scheme by the government as it has not yielded fruits. Olopeania had noted that the problem of the NSDP’s cadets is similar to that of their counterparts at the Maritime Academy of Nigeria (MAN) Oron, which according to him had to do with lack of sea-time on board vessels.
“If you want to train seafarers from cadet to officer, it takes between four to five years, between that period, I don’t know how many of the cadets they trained have become officers now, if they have not become officers then there is a problem with the programme”.
With NIMASSA spending over N20m to train about 2500 cadets, the money woulkd be heading down the drain if little or nothing is done to assuage the lack of seatime for seafarers in Nigeria and no clear-cut policy yet from the government to solve the mirage of problems facing Nigerian seafarers.
Unabated pirate attacks increased insurance premiums
Since the start of 2016, Nigeria has recorded over six pirate attacks both on and off its coast and that has increased Protection and Indemnity insurers and has raised the rate of war-risk insurance for Nigeria.
Also, Nigeria has been classified among high-risk countries in doing international maritime business by the Philippine Overseas Employment Administration.
The association directed that vessels sailing into Nigeria would pay double to engage Filipino seafarers.
Confirming this in an interview with Nigerian NewsDirect recently, the Acting President, Nigerian Ship Owners Association, Aminu Umar lamented the negative implications of the persistent pirate attacks on the maritime sector.
He said, “This problem of piracy is very unfortunate because it is now happening regularly. My insurance broker told me recently that my war-risk insurance had gone up because piracy attacks had been on the increase of late.
“I cannot quantify the impact of this on all of us financially. It will not be easy engaging foreign crew to sail our vessels; they might start turning down jobs.”
Umar said he had also received a mail notifying him of an oil vessel, which was attacked last week with six of its crew members kidnapped.
He added that a Turkish vessel was attacked in the same region prior to the last incident.
He said, “These incidents have put us at a disadvantage because we are now going to pay more for insurance. It will be high for vessels staying permanently on Nigerian waters, especially for those of us who trade here. I expect it will be two or three times the previous amount.
“We intend to take this matter up with the government, especially as we are paying sea protection levy to the Nigerian Maritime Administration and Safety Agency,” he said.
Out of four years term in office of President Buhari, the government had spent just three years and they still cannot be judged based on this.
The president through the Minister of Transportation, Rotimi Amaechi should draw a roadmap for the development of the Transportation sector and the Nigeria Maritime industry should be focused on to generate revenue for the government especially at a time when crude oil was not selling high at the international market.
It would be recalled trhat expert have said that the Nigerian Maritime industry can generate over N7 trillion naira if well harnessed.
Culled from Nigerian NewsDirect