The Director-General of the Nigerian Maritime Administration and Safety Agency (NIMASA), Dr. Dakuku Peterside has identified foreign dominance as the most pronounced challenge common to the maritime and the oil and gas sectors in Nigeria.
Peterside made this known in a paper he presented at a one day sensitization seminar on Local Content Development in Shipping, Oil and Gas Logistics Operations in Nigeria titled: The Role of Shipping in Oil and Gas Logistics Services, organized by the Maritime Association of Nigeria (MARAN) in Lagos yesterday, regretted that despite the huge activities and revenue generated by these two industries, their impact in terms of employment and generation of economic growth has been so low.
Represented by the Assistant Director, Shipping Development of the agency, Mrs. Anna Akpan, the NIMASA boss added that the oil and gas sector of the Nigerian economy accounts for almost 90% of the foreign exchange earnings for the country but less than 20% contribution to GDP and 5% of total employment which according to him was a misnomer.
He posited that the situation in the maritime industry was not different saying that Nigeria which was ranked the 7th largest oil producer in the world was the only oil producing country that does not carry a drop of its crude.
According to him, “Industry statistics shows that the country generates an estimated annual cargo throughput of 150 million metric tons with freight earnings in excess of $5billion in her international trade transactions. 95% of this income is earned by foreigners, with the job deprivation to the country that goes with it.
“The same dominance by foreigners is also extended to the domestic shipping market, where the estimated $3billion annual marine related spending in the oil and gas production activities are virtually earned by foreigners.
“This situation of so much activity and so much money, but little impact on the lives of Nigerians, accounts for the high level of frustration and restiveness in the country especially in the Niger Delta region. With this in mind, the Federal Government of Nigeria came up with the Cabotage law in the maritime industry and the Local Content policy in the oil and gas sector to tackle this challenge”.
He explained that the Nigerian Cabotage law is primarily an economic interventionist policy by the government adding that the law which was designed to be a catalyst to drive the development of the indigenous maritime industry as a whole was structured along four major target areas which were now referred to as the four pillars of the Cabotage Act 2003 namely; that all Cabotage trade vessels in Nigeria must be owned by Nigerians, built in Nigeria, manned by Nigerians and registered in Nigeria.
The apex maritime regulatory agency boss further said that that the objective of the Cabotage law was to achieve self-sufficiency in the area of domestic tonnage capacity, building capacity, manning capacity and registration.
“However, due to the fact that the indigenous capacities were not adequate, the concept of waivers was introduced to allow for a gradual build-up of indigenous capacities and also to avoid destabilizing the smooth running of the Nigerian oil and gas sector which is the target market of the Cabotage law.
“Balancing the act of implementing the Cabotage law and not destabilizing the smooth running of the oil and gas sector has not been easy, but with the enactment of the Local Content policy in the oil and gas industry, NIMASA was presented with a veritable tool to leverage on to effectively implement the Cabotage law in order to boost the indigenous maritime capacity”, he said.