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Nigeria loses US$7b annually by not fully tapping maritime shipping sector

NIGERIA is looking to unlock the full potential of its maritime shipping industry that has the scope to become a major revenue earner for the federal government - to the tune of trillions of naira annually - as the nation attempts to reduce its dependency on the oil and gas sectors in a drive to diversify its economy

Nigeria loses US$7b annually by not fully tapping maritime shipping sector

NIGERIA is looking to unlock the full potential of its maritime shipping industry that has the scope to become a major revenue earner for the federal government - to the tune of trillions of naira annually - as the nation attempts to reduce its dependency on the oil and gas sectors in a drive to diversify its economy

18 December 2018 - 19:00

NIGERIA is looking to unlock the full potential of its maritime shipping industry that has the scope to become a major revenue earner for the federal government - to the tune of trillions of naira annually - as the nation attempts to reduce its dependency on the oil and gas sectors in a drive to diversify its economy.

At present Nigeria is said to be losing an estimated US$7 billion in revenue annually due to its inability to tap the full potential of the shipping industry.



Lagos' Daily Sun investigations revealed that Nigeria is not taking full advantage of its offshore maritime potential. These include services that involve the movement of petroleum products and the shipping of bulk cargo such as rice and cement.



It also learnt that in offshore marine cargo business, Nigeria controls only 15 to 16 per cent of market share. 'In the real shipping of cargo, Nigeria does not have four to five per cent of the business,' an industry source was quoted as saying.



At the recent stakeholders' meeting hosted by Royal Norwegian Embassy in Lagos, Shipowners Forum chairwoman Margaret Orakwusi highlighted that there are vast opportunities for investors who would want to realise financial gains from Nigeria's sea trade.



'There is huge revenue of over $7 billion yearly in shipping but we have relied heavily on importation of goods and exportation of crude oil. The oil is even currently exported as Free on Board (FOB) because we don't have a national fleet. This is an opportunity for investor,' said Ms Orakwusi.



'It holds a huge revenue base, high job opportunities and foreign exchange earner. But it is so underdeveloped.'



Citing infrastructure deficiency as part of the problem stifling the growth of the maritime sector, she demanded that the federal government fix port access roads and make the eastern ports business friendly.



While speaking with Daily Sun,Kamany Marine Services Ltd CEO Charles Okorefe lamented the huge losses associated with Nigeria's inability to utilise its maritime potential for national growth. Mr Okorefe faulted the $7 billion loss to the untapped shipping market, saying that figure is overtly conservative.



He said: 'As a matter of fact, the nation loses more than that only from the leakages in the nation's cabotage trade where lack of adequate enforcement of the letters of the Act and the unabated granting of waivers to foreign operators constitute a major Achilles heel to the expected huge returns from that sector.



'Foreign ship owners still dominate Nigeria's maritime trade in all ramifications and that constitutes a huge capital flight to the nation's economy.



'Aside from this, the continued utilisation of free on board (FOB) rather than cost insurance and freight (CIF) in the carriage of the nation's crude oil will constitute another major drain on Nigeria's shipping trade. FOB in our case simply indicate that the buyers of Nigeria's crude also reserve the right to nominate the vessels to freight the commodity.



'Nigeria as such, does not earn any freight from all the crude oil she exports. This trade term needs to be reversed in favour of CIF so that the nation can begin to earn sizable freight from her massive crude oil export,' he added.



According to Mr Okorefe, other major problems are the high tariff charged by Nigerian ports and the gross under utilisation of other Nigerian ports in favour of Lagos ports claiming these trends were responsible for huge revenue losses in the nation's shipping trade.



He called for the upgrade of the Delta, Calabar and port Harcourt old ports in order to attract ship owners and charterers so as to widen the nation's revenue base outside the Lagos ports.


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