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How MDAs, State Govts Can Grow Nigeria’s Shipping Sector

How MDAs, State Govts Can Grow Nigeria’s Shipping Sector

Cargo ship

·  Indigenous ship-owners should lift cargoes which require CBN’s forex

·  Freight agents lament exclusion from government cargoes, PPP projects

By Kenneth Jukpor

Ministries of Works and Housing, Power, Transportation, among others have been identified as key entities that could help Nigeria realize its quest to grow indigenous shipping by patronizing Nigerian ship-owners and freight agents for their cargoes.

This proposal was put forward by the immediate-past Secretary General of the Abuja Memorandum of Understanding (MoU), on Port State Control for West and Central African Region, Barr. (Mrs.) Mfon Usoro.

Usoro, who was speaking at a maritime conference, also stated state governments and federal government agencies should also engage indigenous players in the shipping sector to help grow the sector.

Her words: “There is a need for a holistic government approach to develop shipping. This is something that ship owners have been clamouring for and it is the practice worldwide. Federal government has to recognize the importance of maritime transport and it has to be integrated in the national policy of the country.”

“All the MDAs that generate cargoes as well as state governments should also be part of the efforts to grow the nation’s shipping sector. The Ministry of Transportation doesn’t have cargoes when compared to Ministries like Works and Housing, Petroleum, Trade and Industry, among others. It is very important that these MDAs are onboard to develop shipping. On the trade policy of Free on Board (FOB) or Cost Insurance and Freight (CIF), even if as the seller Nigeria doesn’t want to have the responsibility that goes with CIF, all other products shouldn’t go on FOB. These are issues that the Minister should address.”

She stressed that there should be a policy stipulating that for any cargo which would require forex gotten from the CBN, the freight should be carried onboard Nigerian owned vessels.

According to her, a similar policy has already been developed and enforced in Ethopia and several other countries as part of efforts to boost indigenous shipping.

The shipping expert also argued that Nigeria should have a clear plan to develop the shipping sector, adding that calving a niche in any aspect of shipping would see the nation get a reputation as one of the shipping nations to be reckon with in the world.

“When we talk about providing jobs for our young population and increasing our foreign reserve and that will lead to our economic development; we should have a plan. We must aspire that Nigeria flagged vessels carry large percentage of the total national vessel exported and also Nigeria flagged vessels should carry a large percentage of Africa’s trade,” she said.

Meanwhile, freight forwarders practicing in Nigeria have appealed to the federal government to reserve freight forwarding aspect of government cargoes and project consignment for indigenous practitioners.

Speaking with MMS Plus last week, a former President of the National Association of Government Approved Freight Forwarders (NAGAFF), Chief Eugene Nweke posited that reserving such cargoes for indigenous players would help grow the capabilities of the practitioners.

Nweke, however, noted that freight forwarders have to be adequately trained to handle the dynamics and huge responsibility with project cargoes.

“The ideal process when awarding contracts for projects is that whoever is given that contract engages indigenous freight forwarders to clear it and deliver it. Before the contractors submit their budgets, the freight forwarder should be consulted to get his cost, clearance and advice that should be factored into the contract. This will help government in saving funds rather than awarding contracts with over bloated figures,” the veteran freight forwarder said.

He also argued that the officials sitting on the export seat at banks should also be freight forwarders or individuals with relevant training on the profession.

Also speaking on this, an ex-Governing Board Chairman of the Council for the Regulation of Freight Forwarding in Nigeria (CRFFN), Alhaji Hakeem Olanrewaju told our correspondent that this disadvantage could also be traced to the inefficiencies of CRFFN.

Olanrewaju in an interview with MMS Plus said the 40% freight component in rail contracts ought to have been given to Nigerians under the Local Content Law, but lamented that the contract was given out to foreigners.

According to the ex-CRFFN boss, there are lots of employment opportunities wasting away in the freight forwarding sector, but Nigerian freight forwarders are not accessing it.

Noting that most of the project cargoes in the country are being handled by Chinese and other foreigners, Olanrewaju blamed lack of experience and education by Nigerian freight forwarders as the main reason most of them could not get government contracts.

His words: “In most countries, if you aren’t an indigene you can’t practice Customs brokerage and you can’t access the ports. This is the practice in America, Benin Republic, Ghana, among others. Besides creating employment for Nigerian citizens, there is also the issue of security which should be prioritized; but in Nigeria everyone has access to the ports.”

“Customs brokers also have the onus of protecting their nations. A broker will be indicted if a foreigner should import arms using his company. There are lots of employment opportunities wasting away in the freight forwarding sector, but we are losing out. For example, in the railway project, how many freight forwarders are involved? The Chinese have taken over the total packaging of the job, and you cannot blame them. It is because most Nigerian freight forwarders are not trained, indigenous freight forwarders are not involved in most of the projects in Nigeria. If you look at the contract package, they have included the freight, transportation and warehousing, among others but these ought to be separated and paid locally. The Chinese would repatriate these monies back to their countries, and only give peanuts to Nigerians to clear the cargoes at the port”

“Any contract issued in Nigeria, whether as federal government or state government, it has 40% freight component, but freight forwarders are not allowed to access this moneys, you begin to ask yourself, what is the interplay between the Cabotage Law and the Nigerian Local Content Development Board? Our local content law in Nigeria is off.”

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