Ship Owners Should Know CVFF Earnings Since Inception – Onyung

By Kenneth Jukpor

Dr. Mkgeorge Onyung is the President of Ship Owners Association of Nigeria (SOAN). In this exclusive interview with MMS Plus newspaper, he speaks on a wide range of maritime issues ranging from ship ownership to seafarers training and development, uncertainties surrounding the Cabotage Vessel Finance Fund (CVFF) and success story of the Nigerian Content Intervention Fund (NCI Fund) managed by the Nigerian Content Development and Monitoring Board (NCDMB), among other pertinent issues.

Excerpts:

What are your expectations or agenda for the nation’s maritime sector from the standpoint of a ship owner?

The industry needs to change because we are merely scratching the surface of issues without addressing them. If we want Cabotage to work, there should be opportunities that need the shipping assets. One shouldn’t consider buying a ship if there are no businesses to do with that asset.

It has been widely reported that the challenges at Nigerian ports have seen more shippers prefer foreign ports. However, Nigerians should also be concerned about the smaller vessels that would bring the cargoes to the country as port related challenges continue. Are we prepared for such development? Do we have shuttle vessels that would bring goods into Nigeria or are we creating more businesses by allowing another set of foreign ships to bring those goods?

A situation where Nigeria owns crude oil and decides to sell this product in a manner where the buyers decide the ships to receive the crude oil is laughable.

Global shipping statistics from 2021 shows that ten leading shipping companies around the world  such as Maersk Line, MSC, Grimaldi, Cosco, among others made $127billion. Nigeria has to be interested in the core of shipping which is ship acquisition.

Apapa port is Nigeria’s busiest seaport but it isn’t a deep seaport. What can we do about it? The port is shallow, outdated and ineffective. A drastic solution will be to relocate the Ajegunle community because no port is built in the city. This is my opinion, even though I can’t claim to be a port expert. Nevertheless, if there are no ships there will be no ports.

Looking at the development of the deep seaport in Lekki, do we understand that we are transferring the traffic and logistics crisis in Apapa and Tin Can environs to the Lekki axis?

There is no additional road that has been built to support the projected output from the seaport. The major difference between Lekki seaports and others in the state is that in Lekki the vessels stop offshore. There ought to be areas to move the consignments before they eventually leave the ports, but people have bought lands all around the facility to build estates like Ajegunle. There is a scramble around the Lekki seaport because investors see the environment as an opportunity to make money.

These are issues that should be brought forward by shipping stakeholders in the country. It’s not sufficient to state that Apapa port isn’t functioning optimally, even though that’s the truth, there should be robust discussions about solutions and how to prevent some of the costly mistakes from reoccurring at new seaport projects.

Cabotage and the issue of seafarer training is another very important aspect of shipping in Nigeria. We are looking up to foreigners and established indigenous shipping companies to train seafarers but this situation can be likened to road transport business. One can’t buy an expensive car or bus and just pick someone by the roadside to be the driver.

When we talk about maritime; it’s a very broad concept. However, in a real sense, maritime can be broken down into two major aspects which are; shipping and non-shipping activities. The proportion is quite striking because shipping represents 98% while non-shipping is 2%. Non-shipping services are more of complementary services but in Nigeria, we aren’t focused on the core area which is shipping. While I’m not trying to discredit other aspects of maritime, if the nation has to make maritime its focus and make greater impact, the discourse and emphasis has to be on shipping. If there are no ships, there is no trade. No shipping, no shopping. No shipping, no medicals. No shipping, no humanity. No shipping, no agriculture. No shipping, no industries. No shipping, no oil.

This understanding is needed for Nigeria’s maritime sector to grow, but it appears to be missing. The top shipping companies that we highlighted earlier have ships as their major assets and they contribute significantly to their respective nation’s economy.

Some of the questions asked by people termed ‘shipping experts’ in Nigeria show some level of ignorance and buttresses the fact that for one to truly understand the maritime industry, he must be involved in the operation of a ship. You must have interest in ship operations and interact with the seafarers who are at the heart of shipping. These are the people who when they go out there, the winds blow them, the pirates attack them, the currents push them. Yet, they are to account for the ocean and they are responsible for the sustainability of the ocean.

Ship owners under SOAN recently visited the Executive Secretary of Nigerian Shippers’ Council (NSC), Hon. Emmanuel Jime. What were the key issues discussed at that meeting?

We had a robust discussion with the NSC boss and we discovered that the most knowledge-driven maritime agency is the Shippers’ Council. During that meeting, we found that the Council has a thorough understanding of the shipping industry. One of the problems of NIMASA is that their priorities are misplaced. Nigeria lost at the International Maritime Organization (IMO) Council election but we shouldn’t stop there.

It’s time to discuss why Nigeria lost and the factors to change the outcome at the next polls.  The truth is that it wasn’t the ports or the maritime security that made Nigeria lose the election; Nigeria isn’t a shipping nation. You identify a shipping nation by its commitment to core shipping activities. You identify a serious maritime nation by the number of ships in its registry.

If Nigeria keeps concentrating on non-shipping activities that represent 2% in the scheme of things, the nation wouldn’t make headway. Maritime security, pollution, wreck removal and environmental issues are non-shipping services, but that’s where Nigeria’s main interest has been.

 

Cabotage Vessel Finance Fund (CVFF) disbursement is one prolonged issue that affects ship owners. What’s the latest on CVFF?

There is an argument that the money in CVFF wouldn’t be sufficient to buy vessels but this assertion is faulty. Those making such arguments may not have a full grasp of shipping. It doesn’t matter if they are retired sailors. If you look at the aviation sector, a pilot that flies an airplane wouldn’t take the role of the Managing Director of an airline simultaneously. Such a pilot could grow in the business, but the fact that he is a pilot doesn’t necessarily mean that he could manage an airline. The same thing applies to shipping. Ship owners who have been successful have got experience that cut-across ship chandling, freight forwarding, logistics, management of goods and resources, bunkering, etc.

NCDMB takes only 1% of the contracts in the oil and gas industry while NIMASA collects 3% from imports including petroleum imports, LNG and every ship operation. Indigenous operators pay 2% and this has been running for 18years with the CVFF. NCDMB is barely 10 years old but it has generated almost $750million. CVFF should have amassed over $2billion since inception. It’s a different matter to argue if the money has been utilized for a different purpose, but we should start by finding out how much is actually in the CVFF. It’s time to know exactly how much has come into CVFF and ship owners have asked this question repeatedly.