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Coastal Trade: Nigerian Operators Fall Behind Amid Challenges

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NEPC
  • Coastal Trade: Nigerian Operators Fall Behind Amid Challenges

The implementation of the Coastal and Inland Shipping (Cabotage) Act is being hampered by the myriad of challenges facing local operators in the shipping sector, ANNA OKON writes.

Cabotage, otherwise known as coastal trade, involves carriage of goods (and passengers) within the territorial and inland waters of any nation by ships and any other means of transportation from one place to the other in the same country.

As part of maritime reforms, Nigeria enacted the Cabotage Act 2003, which was designed to restrict foreign participation in Nigeria’s domestic coastal trade.

The Act makes provision for only ships that are built, flagged and manned by Nigerians to operate in Nigerian coastal waters.

The Nigerian Maritime Administration and Safety Agency had stated that even though the Act reserved the right of coastal trade to Nigerians, opportunities existed for foreign involvement.

But foreign participation in Nigerian coastal waters has overshadowed local participation owing to challenges peculiar to the Nigerian environment.

For instance, 90 per cent of the vessels trading on Nigerian waters are owned, manned and operated by foreign shipping lines, with Nigerian operators managing fishing boats and inland water transport boats that ferry goods and passengers to and from short distances.

The large cargo vessels and oil bunkers are all operated by foreign shipping lines.

The participation of local shipowners in the transportation of petroleum products ended when the Nigerian National Petroleum Corporation became the sole importer of products.

“Local shipping firms are hurting,” The President, Shipowners Association of Nigeria, Dr Mkgeorge Onyung, responded when asked about the fate of the industry in the light of the NNPC monopoly.

He said most of the shipowners had invested money and time in the business, adding, “Some of them borrowed money from banks to acquire those assets and the interest on the loans is increasing.

“When there is no business for them to do, the assets will decay and people will say local operators don’t have capacity. How can they develop capacity when they don’t have business?”

The President, Nigerian Shipowners Association, Aminu Umar, told our correspondent that the NNPC employed the services of foreign vessels to lift its products.

He said the practice was a departure from the past when oil marketers employed local shipowners to ferry petroleum products for them.

Responding to the yearnings of local operators, NIMASA had made several attempts, in collaboration with the Nigerian Content Development and Monitoring Board, to enforce the Cabotage law and increase participation of indigenous operators in the coastal trade.

In 2018, the agency cancelled waivers for foreign seafarers intending to work in vessels operating in Nigerian waters.

In February this year, the Director-General, NIMASA, Dr Dakuku Peterside, said the agency would no longer entertain any form of application for waivers under the Cabotage Act, particularly from oil firms.

Recently, the agency placed an embargo on the importation of cabotage vessels.

But all these efforts have been unable to bring about a significant increase in the participation of local operators in the shipping business.

Challenges facing local operators

Local operators are hampered majorly by finance.

Shipping business is capital-intensive and it would take the involvement of government for operators to build and operate a successful shipyard, according to the Managing Director, Genesis Worldwide Shipping, Capt. Emmanuel Iheanacho.

“The only thing that one would like to see is where the government recognises the critical nature of some of the things you are trying to do and provides a kind of guarantee that can get you the funding you need. When the government stands as a surety, then the financial institutions will have confidence to lend money to the investor.”

According to him, about $10m to $12m is needed to build a 15,000-tonne ship that can sail on a shallow sea with a draft of 6.5 metres.

Iheanacho disclosed that he obtained foreign grant to invest in his refinery and shipping business and the condition for that grant was that he must employ people from the country that gave him the grant.

Most Nigerian operators do not have access to finance, even for acquisition and maintenance of service boats.

This, in part, has resulted in their inability to build capacity and maintain their existing boats.

Our correspondent learnt that some local operators’ contracts were terminated by international oil companies because they did not have functional service boats and often defaulted in the contracts.

The Chief Executive Officer, Marine Platforms Limited, Taofeek Adegbite, highlighted the challenge of operating a shipping firm.

He said, “A vessel is a very expensive thing to maintain. You need to provision monthly. In fact, you must set your day rate per month aside for dry docking and it is simply not money you start running around looking for when you want to dry-dock your boat.

“If you want to dry-dock your boat, you are looking at a million naira a month; that is not money you can call your friends to lend you. You must understand what we are talking about here. It is not meant for the lily-livered.”

Operators had set their sights on the Cabotage Vessel Financing Fund but their hopes had proved futile as they had been unable to access the $124m fund set up to aid them in buying new vessels and maintaining existing ones.

Another challenge has been the shortage of skilled workers in the industry.

The maritime institutions in Nigeria cannot offer Certificate of Competence to seafarers and this necessitated additional training in foreign schools to enable them to obtain the CoC and be employed aboard ocean-going vessels.

As long as Nigerians do not have the necessary qualifications, they cannot be employed on ocean-going vessels, including the ones calling on Nigeria.

The National President, Nigerian Merchant Navy Officers and Water Transport Senior Staff Association, Mr Mathew Alalade, pointed out that if the foreigners were made to stop operating in Nigeria, there may be no indigenous seafarers to take up their jobs.

He said, “We don’t have people to replace these people because our training institutions have not been upgraded to higher level to issue CoC that accommodates all cadres of people on water.

“We must take it easy with the Cabotage law because our schools need be upgraded to issue first-class CoC.”

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.

Appointments

Standard Bank Appoints Sanni Chief Executive for Africa

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The Standard Bank Group, Africa’s largest bank by assets has appointed Yinka Sanni as its new Chief Executive for Africa Regions and a member of the Group Leadership Council.

Sanni, the group’s Regional Chief Executive for West Africa, takes over from Sola David-Borha, who is retiring after 31 years of service to the banking group.

This was disclosed in a statement.

Sanni holds a B. Agric. (Hons) degree in Agricultural Economics from the University of Nigeria and an MBA from Obafemi Awolowo University. He attended the Advanced Management Programme at Harvard Business School in 2009, and the Global CEO Programme at the Wharton School in 2017. He has over 30 years of experience in the financial sector across wholesale, retail and asset management, and joined Standard Bank Group’s Nigerian subsidiary, Stanbic IBTC Bank Plc, in December 1990.

In a note to employees, Standard Bank Group CEO, Sim Tshabalala, congratulated Sanni on his appointment and thanked David-Borha for her extraordinary contributions to the group.

“Sola was appointed as the Chief Executive of Africa Regions in January 2017 and is one of the group’s most deeply expert and experienced bankers,” Tshabalala said.

“Under her leadership, the Africa Regions portfolio has grown remarkably in capacity, market share and contribution to the group’s headline earnings.”

David-Borha has been a passionate advocate of culture change and executive leadership development, having sponsored the ‘Last Mile’ programme, which has resulted in the successful promotion of talented people into both Regional Chief Executive and Country Chief Executive positions, including the appointment of two female Chief Executives in the Africa Regions business.

“It has been a great honour and privilege to serve and contribute to the growth of the Standard Bank Group,” David-Borha said.

“I am delighted to be handing over to Yinka Sanni, an exceptional, authentic and experienced leader who will take the baton forward in driving Africa’s growth.”

David-Borha will remain with the group until the end of June to ensure a successful leadership transition and handover process. Sanni’s appointment is effective from today, 15 April.

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Experts to Provide Insights on Tech & Digital Transformation at MSME Dialogue 3.0

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msme dialogue - investorsking.com

The third edition of MSME Dialogue will take place on Saturday, April 24, 2021 at 10am (WAT). Experts at the virtual event will provide insights while discussing the theme: Powering MSMEs with Technology and Digital Transformation.

The event, which is organized by MSME Africa, is expected to have owners and managers of Micro, Small and Medium Enterprises, Entrepreneurs and Business owners from different sector in attendance.

MSME Dialogue which holds every quarter, seeks to address, burning and relevant  issues about entrepreneurship and running a small business as well as proffering solutions to those issues.

The event aims to provide the right knowledge and know-how for MSMEs, Entrepreneurs, and Startups to enable them to grow and thrive and features subject matter experts, seasoned entrepreneurs, professionals, and players within the MSME Ecosystem.

The speakers expected at the event are: Akeem Lawal, Divisional CEO, Interswitch Group, Rex Mafiana: CEO, FPG Technologies, Fatma Nasujo, Global Head of Operational Excellence at Sokowatch, Kenya, David Lanre Messan, CEO, FirstFounders, Bisoye Coker, CEO/Co-founder, Kiakia FX. The session will be moderated by Solape Akinpelu: CEO/Founder, HerVest.

According to the convener of the event who is also the founder of MSME Africa, Seye Olurotimi “Every business owner who is serious with their business would agree with me that technology and digital transformation are important factors for business growth and success. We all can’t all run or won Tech startups but we can always drive our businesses and operations with Technology and Digital Tools”

“Tech-driven Businesses are making waves and turning in almost unbelievable results against all odds. Businesses who have embraced technology, automation and digital transformation are enjoying unquantifiable advantages. It is because of this that I am calling on business owners and managers to join us at the 3rd Edition of MSME Dialogue, on Saturday April 24, 2021 at 10am ( WAT), as we bring in experts to provide insights on this theme” Olurotimi added.

MSME Africa is a multi-faceted resource platform for Micro, Small, and Medium Enterprises (MSME) in Africa providing capacity development, news, opportunities, business articles and other resources for MSMEs, entrepreneurs, and startups.

Olurotimi said the platform was poised to build the biggest network and community of MSMEs in Africa in the nearest future.

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Ericsson Launches Automation Hub in Nigeria

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Ericsson

Ericsson announces plans to create an Automation Hub in Nigeria to support operators for improved consumer experience.

Ericsson Automation Hub is an open innovation platform, inspired by lean startup methodology in which the Ericsson team works in close dialog with customers, users and partners to showcase and reach the high potential that network automation allows in configuration, provisioning, assurance and orchestration of network services.

This will enable service providers to gain the ability in their environments to govern, manage and orchestrate hybrid networks holistically and in real time and as a result, offer an enhanced consumer experience.

Fields to be covered include but not limited to 5G and Internet of Things (IoT) use cases, Network Slicing and Orchestration, Hologram Calls, Complex Standalone, Business Support System (BSS) and Operations Support System (OSS), Cloud and Core product cases, Automated Acceptance Tests demonstration and enhancements as well as complex charging scenarios for 5G and 4G networks.

Lucky La Riccia, Vice President and Head of Digital Services at Ericsson Middle East and Africa at Ericsson says: “As Industry 4.0 accelerates in Africa, automation in operations is proven to boost customer experiences. Ericsson continues to support the telecom industry players in setting #AfricaInMotion, and with the Ericsson Automation Hub in Nigeria, we will focus on driving business outcomes for our partners in Africa as they aim to leverage digital transformation to turn complexities into opportunities while offering a greater experience and value to consumers.”

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