The President, Ship Owners Association of Nigeria (SOAN), Engineer Greg Ogbeifun has urged the Federal Government to encourage Nigerians to acquire more ships to tackle rising unemployment for seafarers in the maritime sector as the MoU between Nigeria and the PIL shipping group of Singapore collapsed.
Ogbeifun, who made the observation at the 2018 Lagos International Maritime Week at the Oriental Hotel, Lekki, Lagos, frowned at the current Nigerian fiscal policy which stipulates that a vessel owner bringing ship into the country should first pay a duty charge of 14% of the total cost of the vessel to Customs. He specifically noted that in other developed countries, the reverse is actually the case.
According to him, “The PIL pulled out because the Nigerian Fiscal Policy does not make an establishment where fleet of that nature will be competitive in global trade.
“The fiscal policies are tax laws, tonnage tax laws, and other laws that affect international shipping, and we had to, as a body, appoint a company as consultant to do an international study of what other countries and rulers create, what did they do to be able to establish fleets that are trading globally; and that study revealed that most of those countries first of all, declared zero duty.
“If you are national and you acquire a vessel and you are bringing that vessel into the country, your duty is zero; but in this country, the duty payable on an average if you are bringing in a vessel is about 14% of the value of that vessel, so if you take a vessel of $80m, of crude oil tanker, you pay $80m and then you have to pay another 14% of that to be able to import it into your country because you are flying your flag, and you are going to be competing with the current foreign countries who are carrying your cargo and who didn’t have to pay such duty in their country. Their commercial terms for carrying the cargo will be cheaper than yours, so you cannot be competitive internationally, that is just an example of why PIL said in their writing that Nigeria must review the fiscal policy if they must continue in that relationship”, adding that the duty charges were being paid to “Customs, NPA, all sort of importation cost when you are coming in.”
He enjoined the authorities to create a more enabling environment that would not only ensure a level playing field, but also empower the nation’s operators in the shipping sector, the ability to compete, unhindered.
Engr. Greg identified the major challenges vessels owners face as mostly breakdown maintenance among others, which are frequently also solved through hard currency.
Speaking also on the occasion, the nation’s Attorney-General and Minister of Justice, Abubakar Malami, called on maritime stakeholders to address security challenges in the sector, stressing that there must be a seriously improved safety situation within the nation’s territorial waters, if enduring development, and progress would be achieved.. He however emphasized that Nigeria, at the moment has no law in place, approving the carriage of private armed guards onboard, wondering who would accept responsibility, in the event that such private armed guards act beyond their mandate.
Speaking on the theme: “Armed Guards Aboard Merchant Vessels in Nigeria -Legal or Illegal”, Malami who was represented by Special Assistant to the President on Financial Crimes, Mr Abiodun Aikomo posited that maritime security has become an important requirement for merchants’ vessels over the last decade due to the increasing threats from pirates across the world. He maintained that the issue of maritime security in the Nigerian territorial waters should be taken seriously.