- Operators Positive About Turnaround for Local Shipping in 2019
Operators in the local shipping industry are optimistic that 2019 will signal a positive turnaround in the development of the industry.
The President, Nigerian Shipowners Association, Alhaji Aminu Umar, expressed this optimism to our correspondent in an exclusive chat on Monday.
He said that the rising freight rates in the upstream petroleum sector were already having positive impact on the Nigerian industry.
Although Nigeria is one of the biggest oil producers in the world, Nigerian vessels are not involved in lifting of the country’s crude.
Lack of a national shipping line and poor local participation had created a shipping industry dominated mostly by foreign shipping lines.
The downstream sector, however, has a lot of local players and Umar expressed the hope that the sector would be deregulated this year, so that business could boom for owners of service boats.
He said the number of operators would increase with the deregulation of the sector.
The sector had also witnessed increase in the number of service boats from 9,418 in 2016 to 12,243 in 2017.
In 2018 and the years prior, the local shipping industry was bedevilled with challenges of low capacity utilisation and paucity of funds.
Operators mostly blamed lack of funding for their inability to participate fully in the shipping business.
They intensified their quest to access the Cabotage Vessel Financing Fund, which was set up in 2007 and which was derived from the annual contributions of individual shipowners.
The purpose of the fund was to assist shipowners in the acquisition of new vessels and maintenance of existing ones.
The amount, according to published reports, has accumulated to $124m as of end of last year.
The President, Shipowners Association of Nigeria, Greg Ogbeifun, said the number of local shipping companies had dropped by 42 per cent between 2015 and 2018, as a result of the funding challenge besetting the operators.
He regretted that with the steady and painful contraction of shipping companies, a multitude of seafarers were also reluctantly thrown into the labour market.
According to him, unfavourable maritime policies in Nigeria have made shipowners weak, vulnerable and grossly incapable of adequately pulling their expected weight, in the task of building up the economy; even as some areas of ship scrap yard in Port Harcourt now look like a mortuary for ships.
He said most shipowners were currently fighting for survival amid staggering and intimidating bank debts.