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The Renewed Bid for National Shipping Line

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Container Shipping
  • The Renewed Bid for National Shipping Line

For decades, the nation’s shipping industry did not record significant progress. This has made stakeholders to cry out to no avail. The matter was made worse when the only national carrier, the Nigerian National Shipping Line (NNSL), was liquidated about 21 years ago. Since then, the shipping sector has been dominated by foreigners. Government had moved about 13 years ago to address this by establishing the Cabotage Policy, which limited carriage of local cargoes within the territorial waters to indigenous operators. But this again failed to work.

The cargo owners, mainly the Nigerian National Petroleum Company (NNPC), and the oil majors have not patronised the local operators adequately. The claim by the NNPC executives has always been that many indigenous ship-owners do not have the required capacity for the wet cargo job within the nation’s waters. For the foreign companies, this was a good development and they were issued waivers by the Transport Ministry for most of the jobs. Only few Nigerian companies have been lucky. But no one has been discussing the carriage of crude oil by Nigerian companies because of the trade terms that favour only foreign carriers. But recently, the NNPC welcomed the idea of a national carrier to be able to participate in crude oil transportation.

Multiplier Effect on Economy

At a gala dinner organised by the Ship Owners Association of Nigeria (SOAN) at Eko Hotel, Lagos, the NNPC Group Managing Director, Dr. Maikanti Kacalla Baru, made every stakeholder happy when he stated the readiness of his corporation to support the national carrier project.

Baru said establishment of a national fleet for crude oil affreightment would be of huge economic benefits to the country with multiplier effect on the nation’s economy. Apart from earning billions of dollars which will address the nation’s foreign exchange nightmare, a national fleet programme will also increase capacity building as it will provide a training ground for the nation’s cadets from which Nigeria can earn foreign exchange like other countries.

Baru said that since Nigeria exports her crude oil on FOB basis, a national fleet programme for the country will make the nation transact her crude oil business on CIF basis. Under Free on Board trade terms, the buyers determine who carries the products as against Cost, Insurance and Freight in which the seller will determine who carries the wet crude.

The transportation of the nation’s crude products has been in the hands of foreigners because those who buy the products nominate their own carriers for the products, most times their own liners.

Baru stated that the establishment of a national fleet for crude oil affreightment helps the country save some of the foreign exchange paid to foreign ship owners.

He said that, “The establishment of a National Fleet for crude oil affreightment helps the country save some of the foreign exchange paid to foreign ship owners. A total of 771,689,625bbl (197,179, 115mt) of crude oil was lifted from Nigeria in 2015. The current freight rate for 130,000tonnes vessel from West Africa-UKC/med is $7.99/tonne. Assuming that the total tonnage of the nation’s crude oil was freighted to UKC/Med using a 130,000 vessel (which could take 950,000bbl), it means that a total of about $6,165,800,104 was paid to foreign ship-owners. Some of these monies could have been saved if the nation had a national fleet for crude affreightment”.

Caution by NNPC

For the national carrier to succeed, Baru gave his advice. He cautioned that the establishment of a national fleet should not be considered solely as the responsibility of government, but should be private sector-driven like in other countries of the world. He also said there was the need to be very careful in the choice of the business model, adding this was very important for the success of the business.

He said, “The establishment of a national fleet should not be considered solely as the responsibility of government. Having a national fleet is about ensuring global presence of a nation’s flagged vessels. The shipping industry in Greece which is the largest in the world is mainly driven by private sector. The ship-owners association should thrive to grow the business of its members such that Nigerian flagged vessels are visible globally. The association therefore, should identify what government needs to put in place to make the shipping business of its members extremely successful.

Applauding SOAN for the efforts to have a national fleet, he advised everyone involved in the plans to learn from the mistakes of the liquidated NNSL. He warned about establishing a national fleet that will be operated by foreigners, adding that this will be against the provisions of the cabotage law.

He said, “Owning a ship is no mean feat, considering the amount of money involved in maintaining a ship, her crew, insurance, regulatory dues etc. The association should be applauded for its worthy objectives which are largely aimed at growing the shipping industry in Nigeria.

“I am sure that you all are aware that our country once had a National fleet under a company called Nigerian Shipping Line (NNSL). One cannot speak therefore on the benefit of establishing a National Shipping Fleet for Crude oil affreightment without referring to NNSL.

Views by Stakeholders

To open up indigenous shipping development in the country, SOAN wants the federal government to review some of its policies and programmes to drive the desired growth in the industry. The President of SOAN, Engr. Greg Ogbeifun, called for a review of duties paid on imported vessels, corporation income tax for companies acquiring new Nigerian flagged vessels and port cost concessions. Others include a review of fines and penalties for offences as contained in the Maritime Agencies Act.

Ogbeifun urged the federal government to amend the Act to support the Nigerian shipping fleet, adding that the Sea Protection levy for instance should be stopped. He also demanded that Nigerian ship owners should be allowed to carry at least 50 of government owned cargoes, adding that this was necessary for the development of the local industry. He called for the creation of priority berthing for Nigerian registered ships and a review of the “extant policy that traders should not earn foreign exchange to pay for product if that cargo is already on Nigerian waters”.

The association equally demanded for the amendment of the cabotage law to effectively enforce local content. The body also called for a review of the maritime law to permit the setting up of a Protection and Indemnity (P & I) Club in Nigeria.

Government’s Readiness

As part of the efforts to establish a national carrier, Nigeria and Singapore has already signed a Memorandum of Understanding on the planned re-establishment of a national fleet. A delegation of the committee was in Singapore with the Transport Minister, Rotimi Chibuike Amaechi, to sign the MoU. Since then, there has been a follow up with members of the Ministerial Committee on national carrier committee headed by Hassan Bello who is also the Chief Executive Officer of the Nigerian Shippers’ Council. Bello and other members of the committee were in China last week to continue discussion with the authorities connected with the project. The Chinese contact will handle areas of fish trawling in the national fleet and was referred to the committee by the Singaporean company.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Nigeria Corporations Paid N238.1 Billion Income Tax Via E-channels in 2020

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electronic channel

Nigeria Corporations Paid N238.1 Billion Income Tax Via E-channels in 2020

Companies in Nigeria have started embracing electronic payment platforms established to ease the tax payment process and facilitate accountability.

According to the National Bureau of Statistics (NBS), businesses operating in Nigeria paid the highest amount of taxes through electronic channels in five years in 2020.

The statistics office puts the total amount paid in Company Income Tax (CIT) through the electronic channels at N238.1 billion in 2020.

The amount represents 16.9 percent of the total CIT paid in 2020 as more businesses adopt safer online payment methods.

NBS noted that payments were done through E-transact, E-tax pay and Remita.

However, a further breakdown of the report showed taxes fell by 13.5 percent from N1.63 trillion in 2019 to 1.41 trillion in 2020 due to the lockdown that crippled business activities in the first half of the year.

Taxes paid by Nigerian owned companies declined by 2.78 percent from N813.17 billion in 2019 to N790.58 billion in 2020. While taxes paid by international companies declined from N615.52 billion achieved in 2019 to N388.77 billion in 2020.

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Aliko Dangote Remains Africa’s Richest Man With $12.1 Billion Net Worth -Forbes

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Aliko Dangote Remains Africa’s Richest Man With $12.1 Billion Net Worth -Forbes

Nigerian industrialist, Aliko Dangote, is Africa’s richest person for the tenth year in a row.

In the Forbes Africa latest billionaires list, Dangote’s total net worth stood at $12.1 billion, a $2 billion increment when compared to last year. Thanks to the 30 percent increase in the price of Dangote Cement share.

Nassef Sawiris of Egypt followed Dangote with $8.5 billion net worth with the majority of his investments coming from construction and other investments.

In third place was Nicky Oppenheimer of South Africa with an $8 billion total net worth.

Mike Adenuga and Abdulsamad Rabio, the two Nigerians, came fifth and sixth with $6.3 billion and $5.5 billion net worth, respectively.Forbes Africa's billionaires list

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Portland Paints, Chemical and Allied Products Plc Agreed to Merge

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Portland Paints

Portland Paints, Chemical and Allied Products Plc Agreed to Merge

Portland Paints and Products Nigeria Plc and Chemical and Allied Products Plc have agreed to merge, according to the latest statement from both companies.

In a statement released through the Nigerian Stock Exchange, the Board of Directors of CAP said we are “pleased to inform you that following discussions and negotiations, the Boards of CAP and Portland Paints have reached an agreement to undertake a merger between both entities (the “Merger” or the “Proposed Merger”).

Accordingly, we “hereby present to you the terms and benefits of the Proposed Merger for your consideration and seek your support and approval to effect the Proposed Merger.

“The Proposed Merger presents a compelling opportunity to create significant value for shareholders of CAP and achieve the company’s strategic growth objectives as a larger company with a broader product portfolio, more corporate owned brands and diversified revenues.

“The resultant entity is also expected to benefit from enhanced distribution capabilities in addition to economies of scale and operational efficiencies.”

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