January 29, 2023

Maritime Today Online

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Nigeria loses $45billion in freight charges to foreign shipowners

The Nigerian economy has lost $45billion as freight charges paid to foreign shipowners for dry and wet cargo from 2015 to 2019 due to the absence of a national fleet plying international trade.

According to statistics by the Nigerian Ports Authority (NPA) a total of 26,147 vessels berthed at the Nigerian ports with total dry cargo throughput of 372 million metric tonnes and total wet cargo throughput of 613 million metric tonnes within the review period.

Executive Secretary, Nigerian Shippers’ Council (NSC) Hassan Bello, who gave the figures at the public presentation of the book, “The Rise, Fall and Liquidation of Africa’s pioneer Carriers: Nigerian National Shipping Line and Black Star Line” authored by mass media producer and publisher of a dredging and maritime magazine, Edmund Chilaka, in Lagos on Thursday, said the amount lost represents an average of more than $8billion paid to foreign shipowners annually.

Bello said it is embarrassing that a coastal nation like Nigeria with abundant natural resources conceded the transportation of its export and import cargoes to foreign carriers thereby denying the country the huge economic gains derived from maritime business.

“If we apply the NIMASA benchmark freight rate of $92.5 per metric ton for general dry cargo from Europe, total freight of more than $34billion was paid for the period while with a bench mark freight rate of $18 per metric ton for crude oil to Europe, freight paid to foreign shipowners on crude oil export was more than $11billion for the period.

“This means that more than $45 billion was paid as freight for dry and wet cargo to foreign shipowners by Nigerians from 2015 to 2019 alone (an average of more than $8 billion paid to foreign shipowners annually.

“This is an economic opportunity loss to the nation as the country did not benefit anything as freight from carriage of her cargo due to absence of Nigerian fleet plying international trade,” Bello who was represented by the Deputy Director, Consumers Affairs Department, NSC, Akujobi Celestine said.

The NSC boss noted that challenges bordering on ship registration issues, absence of incentives for the maritime industry, trade terms and absence of institutional framework have hampered the development of the Nigerian fleet over the years thereby giving opportunities for foreign vessels to dominate the nation’s shipping trade.

Bello, who is also the Chairman of the Nigerian Fleet Implementation Committee

noted that the decision to constitute the committee was to avoid the failures of past attempts and address the in-balance in the nation’s shipping sector to enable the country to play significant role in the carriage of its import and export cargo.

While urging the government to provide the required business environment to encourage private sector buy-in into the initiative, Bello said the committee is currently working with relevant government agencies and the private sector to revitalise indigenous shipping capacity and to accelerate participation in international maritime shipping services.

Head of the Department of History and Strategic Studies, University of Lagos, Prof. David Aworawo, who reviewed the book said it detailed the activities and eventual collapse of the Nigerian National Shipping Line and the Black Star Line.

He noted that while government should not have much business to be in business as it was in the case of the defunct shipping lines, there is however the need for government.

In his remarks, Chilaka posited that there isn’t need for a national fleet but for the government to support indigenous shipowners.