Aminu Umar is the Chief Executive Officer of Sea Transport Services Nigeria Limited and the President of Nigeria Shipowners Association (NISA). His company controls one of the largest tanker fleets in the country. Aminu is a young man with the command of shipping business in his fingertips. In this interview with MMSPlus Weekly,he handles the challenges of shipowners in the country with the confidence that soon members of NISA will smile and be proud of being members. He explains why foreign flag vessel do better in Nigeria and what Gen. Buhari’s government must do fast to create thousands of jobs in the maritime industry. Excerpts.
How would you describe NISA as it is now after the crisis that led to the formation of a rival group?
NISA is still Nigeria’s Ship owners Association. Our membership has actually increased because the shipowners in Nigeria have realized that the stand we are taking and our approach are more encouraging. As it is now, we are representing the real Nigerian shipowners.
Since we had the crisis of confidence with one of our ex-presidents,the executive committee has been together. We have also met with some of our Board of Trustees members. And we have discussed with some of our members. Now, what we are doing is that we are carrying out a revalidation of our membership to make sure that the members are fully registered, have the correct documentation. The ones that have questions in their documentation will go and revalidate it or correct their documentation before they will be registered as members of NISA. This is what we are doing and it will continue till about the first week of May,2015. So, the moment we conclude that we intend to call for an Annual General Meeting (AGM) to ratify all the decisions we have taken.
Do you by any means feel threatened by the rival group?
Not at all, they are not a threat, we are strong, and we represent the true Nigeria’s ship owners. Under the Nigeria’s Constitution, everybody has the freedom of association. So, we do not think that the new association is equal to NISA. NISA is strong and will continue to be strong. We represent the Nigeria’s ship-owners.
What can you say about the Nigerian shipping industry?
The position now is that there is a noticeable increase in growth. We can look at the Nigeria shipping sector in three forms. One is the oil and gas, the downstream sector, and the people that participate in lifting of products. They are all growing. We have more Nigerians that are ship-owners now compared to a number of Nigerians that were ship-owners ten or fifteen years ago. And if you look at the upstream sector, we have more Nigerians participating in this business, than it used to be ten years ago. And if you look at the other side, which is dry cargo, for now, Nigerians are not participating, but we believe we are going there. The target is to participate in all the sectors of the maritime industry, so we are moving closer, because now that the numbers are increasing, the percentage is increasing. What we need is more support from the government and the relevant government agencies that are regulating the maritime sector. We intend to engage the new government on a number of issues affecting the shipping industry in Nigeria and shipowners. This is our intention.
What are the challenges you are having?
The shipping market has a lot of challenges. One of them is finance,as you know, and shipping is a capital- intensive business. The assets are very expensive. Some of the banks are not ready to finance maritime business, some look at the risk ratio as high. That is why you have intervention funds set aside by the government like the Cabotage Vessel Finance Funds (CVFF), which the government is supposed to use to support operators. We intend also to write and look for how these funds can be used by operators to stand on their own. On one side is the marketing side, the client’s side, and the business side. Up till now, for example, in the upstream, the major clients there are these oil majors, the International Oil Companies (IOCs). Nigerians find it difficult to break into that circle just like any company to participate.
So, we want the government to support and encourage these people to give business to Nigerians at the same standard like any international company. In the downstream sector like I told you, many of the cargoes that come in here and go out are mostly carried by international vessels. We intend also to make a presentation to the government, to encourage the people that are giving this contract so that they can give more support to Nigerian stakeholders.
This, on one side, on the other side is the support of the regulatory bodies because Nigerian ship owners pay more taxes than the foreign ship owners, a factor which places us at a disadvantaged position because we are not competitive, if we pay more tax as Nigerian ship owners than the foreigners. We feel that the intention of some of these policies is to support Nigerian ship-owners but the charges and the financial cost implications place the Nigerian ship owner at a disadvantaged point. We want to look at it with the relevant institutions so that they can review this, place us at an advantage position. The fourth problem we have is man- power. Any ship owner needs the seafarers. We have the problem of inadequate man- power to manage our ships and in that case we have to go and look for expatriates. However, we believe that the Nigerian Maritime Administration and Safety Agency NIMASA) should partner with the ship-owners so that we can be given chances to also train Cadets on sea. Let them have seatime training to know how to do it practically, not the certification alone.
In addition to school, they should go for training also. But we have to work with NIMASA on that, so we will make a presentation towards that.
Why do indigenous ship-owners pay more taxes than foreigners?
Unfortunately, we don’t know why. Some of these charges I cannot explain but I can tell you that ships that are flying Nigerian flags today pay more charges, the charges they pay are higher than that of foreign ship owners who come here and do business and leave. Unfortunately because the put cost to some of these charges, they charge you for you to operate in the Cabotage business. Secondly, for you to register your vessel under the Nigerian flag, you pay some charges too to the NIMASA. You also pay what they call the sea protection levy, you pay dues to NPA, you pay a lot of charges to the port authority when your ship is coming in, and so these make the cost higher. And in addition to that, you pay custom duty of your ship which the foreign ships do not pay, because you are an indigenous ship, because you are flying the Nigerian flag. So you are forced to pay a custom duty on the ship which the foreign vessels do not pay. It is not applicable to him. You have paid millions of dollars than your foreign competitor. But he will get more business than you because he has less cost, so he can afford to bring his price down, but you, your price will be higher as a result of the many charges you pay. We intend to itemize these charges and make them public. It is really tough on us.
Was it NIMASA that introduced these charges?
NIMASA has part of the charges, the Nigerian Ports Authority (NPA) has a part, the Customs, the Immigration, and all other agencies have their charges. So, there are so many charges that Nigerian flag ships pay that foreign vessels do not pay.
What kind of partnership, do you intend to develop on capacity building?
I am saying as a Nigerian ship owner, if we employ a lot of Nigerians, it will be to our own advantage. So, instead of NIMASA training seafarers abroad, let them come to our ships, we will send them to school, train them on ship and they will have automatic employment. So, it is better than NIMASA training them abroad, and even when they come back, they (NIMASA) do not have a place to put them. So, we feel that they are supposed to work with us, look at the incentives that should be given to Nigerian ship owners , so we can be encouraged to take more Nigerians, take them on broad, take them everywhere around the world and give them sea time experience, put them to school training and when they are through with the training, they will automatically be employed, than training as many as they can, and there is no place to put them as NIMASA is doing. And because they have no sea time, you cannot put them on a ship. You start them from the lower cadre and there are so many of them, so there have to be certain number of them that have to go for next level certification. So, the young men and women that came back are so many that they cannot get any position. It is frustrating to them. They have put in their best to get their certificates and there is no place for them. We believe that they should work with NISA. We will take them to school, start their training, send them for courses and from there, give them their training on ship. We intend to even bring trainers from abroad, who will train them, and they are automatically employed. And you can see, it makes it easy also because, one of the key problems is, if you want to employ somebody to man your ship, you have to check his knowledge and his know-how. You need to know whether he knows what he says he can do. And ship is so expensive that you cannot take risk. If you don’t know or you don’t trust him, you might not want to use him on board the ship, but if you train him from the beginning, you already know him, he is part of your organisation and that is how it is supposed to be.
At MAN Oron, what kind of training do they get that is different from what they go abroad to get?
As far as I am concerned, they give the same training but what is happening is that there is a limited number of young men and women they absorb in that college. So, in the process some of them have nowhere to go. So, if they are unable to absorb some of them and send them abroad, I understand that some of them are sent to Malaysia for training. But i think we should encourage the boys coming out of Oron, the ones that finished from the colleges here.. They are the ones that we will take, train and then move them over to get higher class certification. We have the original maritime university in Ghana, which also gives them the class certification they need.
Your past president said that he struck a deal to lift AGO, that members will start the lifting of crude soon?
As far as I am concerned, at NISA, we have no idea what he was talking about. When someone said that he struck a deal to lift products, I don’t understand what he meant by that. Is it that he struck a deal with NNPC or he struck a deal with one of the oil companies? We don’t know the deal he struck, but I think for us in NISA , we are not aware of this deal and we don’t think that there is anything like that and it is not likely to happen in the country as it is today.
Does he have anybody especially from the executive with him?
No, there is nobody. He is standing alone.
What do you think about the CVFF, the way things are now?
Well, for us here in NISA based on what we understand from the Act, this CVFF is a contribution of operators and we understand that the funds are supposed to be accessed by operators. So as far as NISA is concerned, these funds are not really accessible by anybody but last year, we heard that some six names were shortlisted but nothing has happened so far. So, we intend also to make a presentation to discuss the issue with NIMASA to understand what their intention is. The Act says that it is operators’ funds so, we expect the government to say this is what we have, a particular amount so far generated, this is the procedure for accessing the funds and these are the conditions for you to access it. So far, to be honest, I don’t know the procedure, I have not seen anyone access it. So, we intend to make it to be a stakeholders’ meeting to look at how to chart a viable course for the maritime industry.
Olisa Agbakoba called for a meeting the other day, were you aware of it?
Unfortunately, I was out of town but NISA executive members attended. I have not heard anything about it from the executive to know what they discussed in the meeting but I understand it is supposed to be stakeholders’ meeting to look at how to chart a viable course for the maritime industry.
There are people that are not necessarily members of NISA or ship owners but participate in NISA’s activities, does the constitution support this?
I think the first decision we have taken is to revalidate NISA members. In NISA constitution, there are three categories of membership. There is full members who must be ship owners. There is associate member who is anybody that does business or provide services in the shipping industry. Then there are affiliate members who are members of associations that are affiliated to NISA so what we are doing is revalidating the entire membership. So this is anybody who provides services to ship owners or the shipping industry. Then ship owners are also revalidating because for every ship owner, for you to revalidate your membership, you have to give us or submit a copy of your certificate of registration of your company with NIMASA certificate of registration of any vessel that you have with NIMASA, that means the vessel must be a Nigerian flag vessel and it must be fully classed with valid papers not dead vessel. So, if you meet that, you are a full member. Copy of certificate of registration of CAC, copy of certificate of registration with NIMASA, copy of ship registration certificate with NIMASA and a vessel that is classed that is fully classed which is verified at NIMASA. The associate members have their own documents to present which are not the same as the full members so, after then we will publish the list of all valid members of NISA which will be made public and everybody will know the members. After that, we take these things to the AGM and it is ratified. We intend to also look at it based on the discussion we have at the AGM as agreed by all members to also review and look at the constitution in so many areas to make it better. We will constitute a committee to look at it.
How much has the present situation affected NIMAREX?
I don’t think it has affected it. We have been having meetings with the chairman of the NIMAREX planning committee. Actually, because of the political environment, the NIMAREX that was supposed to take place in March has now been shifted to July. So, depending on the situation on ground, at that point in time, we will look at it. Our plans which we have been discussing with the chairman of the planning committee from NISA position is that we want to make it a different NIMAREX. A different NIMAREX in the sense that we want to see that there is a lot of participation not only of ship owners but of the people that provide services for ship owners. We want to see that so many companies that did not attend before especially like machinery companies that provide equipment to ships that have not been participating. We intend to call all these people. We want to even look at the possibility to do it the way it is done in Europe. So, we are discussing these new ideas with the NIMAREX planning committee and Ayo Adedoyin has always been in our meetings.
Some people that attended NIMAREX in the past said that most of the discussions centered on tanker operators and nothing on offshore; will there be a change this time around?
This is one of the things we intend to also change in this year’s NIMAREX. In fact, Ayo Adedoyin is an offshore operator. So, this time around, we say let somebody from the offshore be the one to chair NIMAREX and he has already been making contact with the international oil companies, he has talked to many operators in the upstream and they have all shown interest in participating. For myself, I am a tanker operator; I am more of a tanker person but also looking towards investing in upstream.
I have been in the industry for more than ten years and currently I am the Managing Director of Sea Transport Services which is one of the largest tanker owners in the country. So, we operate one of the largest fleets of tankers and we have achieved a lot within the last ten years.
Let us look at the issue of off bar, where STS take place in Togo waters for Nigeria activities.
Actually, some years back, I cannot remember, we had a meeting with CBN representatives together with NISA executives and NIMASA to look at the problems because there is a CBN policy that makes it impossible for receivers of oil to load cargoes at offshore, Lagos. And we are moving these operations to Lome, Togo. There, we are generating more business for the Lome port, creating more employment there while on the Nigerian side, the agencies, those affiliate businesses that come up with this operation like Chandelling, bunkering, STS service providers, all those people that give these services are here in Lagos, Nigeria because the operations are in Lome so all these people go back to Lome to do this including surveys that are supposed to be witnessing these operations; there are mooring masters that are supposed to take the vessels along all these affiliate state for Nigeria. 90 to 95% of vessels that go to Lome is for Nigeria. We are developing the employment generation in that country; Income generated in that country, revenues for the country and we are losing them here. The question is: is it not part of the local content we are talking about? I think we should review this when the new government comes on stage by looking for a way to have a meeting with the CBN.
When was this done in the first place?
To be honest, nobody can say. We tried to find out the reason behind it but nobody can say anything and the former executive were unable to meet the CBN to discuss these matters. I made presentation to NIMASA and the CBN actually came and had a meeting with NIMASA but the people that came were unable to give the reason behind that policy but the truth is the policy makes Nigeria to lose revenue, lose employment generation, lose a lot of wealth creation that should have been done in Nigeria.