· Why sea-link project failed
· African ship-owners are myopic- Islamic P&I Club
By Kenneth Jukpor
As part of efforts to resolve the ravaging problem of maritime insecurity in the Gulf of Guinea, the Former Chairman, International Maritime Organization (IMO) Legal Committee, Dr. Kofi Mbiah has admonished African coastal states to pull resources together to tackle the menace.
Dr. Kofi Mbiah who was speaking to MMS Plus newspaper during an exclusive chat at the just concluded 2018 Lagos International Maritime Week, lamented that African nations lacked the finance and surveillance technologies to tackle the security challenges in the region.
However, he suggested that African countries could make headway by developing common policies to enable sharing of surveillance information and strategies.
“The issue of piracy on the Gulf of Guinea is about a vast expanse of water and no single African country has the surveillance resources to cover the entire area. We can only do that through joint arrangement. We need to address the problem from various facets and not just from the seas. We need to look at communication, surveillance, common policies of engagement along the West and Central African region so that as African countries communicate with each other and doing surveillance together” he said.
Dr. Kofi, who was also Former President of Union of African Shippers’ Council (UASC), noted that the problem of piracy and armed robbery at sea starts with the economic and social framework which causes disenchantment, leading to criminal gangs that transpose their activities to the seas.
Noting the efforts of IMO to solve the attacks or attempted attacks in the Gulf of Guinea, he said; “The IMO, through the ITCP provided support for various countries to develop the framework for ensuring that they deal with the issues of piracy and armed robbery at sea. The challenge has always been that African countries have been unable to prosecute those offenders. Also remember that piracy is not generated at sea; it is generated, conceived and strategized on the land. The issues that pertain to the land are the things that translate to the problems on the sea”
The maritime expert also commented on the impediments hindering lofty sea-link project in Africa. He stressed that the problem had been lack of coordination among African nations.
“This sea-link project was one of the viable options proposed to develop the maritime industry across Africa but the challenge has always been that there is no coordination among African nations. Despite the fact that we have the African Union (AU), Economic Community of West African States (ECOWAS), East African Community (EAC), Southern African Development Community (SADC), among others, the challenge has been coordination. We talk about these lofty ideas in conferences but the coordination hasn’t been there. If there was coordination, we would have been able to develop a common policy that would have enabled the sea-link project work”
Also speaking to MMS Plus at the event, the Regional Manager, Islamic P&I Club, Mr. Mohamad Ahmad Renno expressed dissatisfaction that Nigeria and most African coastal states were depriving themselves of the enormous benefits in controlling the stakes in shipping.
Mr. Renno blamed ship owners in the African region for being myopic with their vision of success and development in the aspect of ship acquisition.
“Forgive me if I must say this, Nigeria and most of African ship owners only seem to be interested in substandard ships just to work and get more money. The focus of these individuals isn’t on the region or their specific countries. Their focus has always been how to get more money. The argument is that the financial aid in Nigeria and Africa in general hasn’t matured but the available money isn’t invested in the country and when it is, it isn’t done correctly” he told our correspondent.
“With all due respect to Nigeria, I don’t want to start re-echoing the issues of corruption but they are not putting things in the right track for the benefit of the entire African people. Africa has everything (cargo and the market) required to be a success in shipping but they have to implement it correctly” he added.
However, in his comments on ownership of vessels in Africa, Dr. Kofi said the issue was a big challenge.
“We have to look at the competitive advantage and look at whether we can invest in the area of ship acquisition. If we aren’t able to invest in that area we shouldn’t force the government to own vessels as we had in the past with Nigerian National Shipping Line (NNSL) and Ghana’s Black Star Line. We have to come to the realization that ship acquisition is about economics, margins and profit. So, the idea would be to have Public-Private Partnerships (PPPs) to develop this area. Our governments can be conscious and decide to take up 10% or 20% of the business but the private sector should be allowed to operate it”, he said.
Meanwhile, addressing the issue from Nigeria’s perspective, the President of Ship Owners Association of Nigeria (SOAN), Engr. Greg Ogbeifun said the closet effort to attaining national carrier crumbled when the foreign investor, PIL, pulled out because Nigerian fiscal policies do not make the establishment of a fleet of that nature competitive in global trade.
He said, “We engaged a consultant to do an international study on what other countries like Angola and Kuwait did to establish fleets that are moving globally. That study revealed that most of these countries initially declared zero duty for internationals who acquired vessels that are coming into the country. In Nigeria, the duty payable on an average if you are bringing a vessel is about 14% of the value of that vessel. So, if you take a crude tanker that is $80million for instance, you pay the $80million and another 14% of that value to be able to import into your country”
“Remember that you’re going to be competing with the foreign companies who are carrying your cargo but don’t have to pay such duties in their countries. Their financial terms would be cheaper and you can’t compete with them. That was why PIL pulled out of that arrangement. They made their point obvious in writing, stating that if they must continue Nigeria must review that arrangement”
He also lamented that the committee set-up for the realization of the national carrier hasn’t been able to pull together indigenous investors that can provide the 60% equity for the ship acquisition.
