March 28, 2023

Maritime Today Online

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NIMASA targets zero duty on vessel import

ISPS Code crucial component of maritime security architecture in Nigeria- NIMASA

By Shulammite ‘Foyeku

The Nigerian Maritime Administration and Safety Agency (NIMASA) said it is projecting to achieve a zero-duty rate on importation of new Nigerian flagged vessels as part of incentives for indigenous shipowners.

Director General of NIMASA, Bashir Jamoh, who stated this while responding to questions from journalists during an interactive session in Lagos on Friday, said the proposed zero import duty is targeted at discouraging importation of rickety ships into the country.

Recall that indigenous shipowners have severally lamented the high Customs duty of 15 percent on importation of Nigerian flagged vessels as against vessels flying foreign flags which are required to pay as low as one percent.

Jamoh said NIMASA is engaging the Federal Ministry of Finance and the Central Bank of Nigeria (CBN) to develop the incentives for shipowners to enhance their competitiveness with their foreign counterpart, saying that the agency hopes to get the President’s approval in no distant time.

“Talking about the relief package, we have made two submissions. The first one has to do with fiscal incentive. The fiscal incentive for the maritime stakeholders is for them to have a relief package if they import a vessel. We want the government to look at the type of duties they are paying in order to discourage importation of rickey buckets into our shorelines. We encourage the government to give us approval so that anybody that brings in brand new ships would attract zero duty.

“If a shipowner brings in a two- or three-year-old ship, maybe there will be a collection of two or one percent duty but the older the ship, the higher the duty so that we can discourage people buying old ships. We don’t want to see old ships litter within our waters. We have recommended that and this is being handled by the Federal Ministry of Finance. I am sure any moment from now, it will be presented to Mr. President and very soon, we will get the conveyance of the approval to that effect.

“The second part has to do with monetary incentives. We have made our presentation to the Central Bank of Nigeria (CBN) and they responded that we should sit down with stakeholders. We will now also graduate and produce the type of monetary incentives we want. For example, the dollar is very expensive now and we have an exchange rate that is being approved by the government. So, we want to see that when you are importing spare parts, maintaining ships or when you are buying ships, you will be able to get it at the appropriate exchange rate so that the cost of purchase will be reduced through the controlled foreign exchange. We are yet to make a presentation on that as requested by CBN,” he said.

Speaking on disbursement of the Cabotage Vessel Financing Fund (CVFF) to shipowners, Jamoh said four primary lending institutions and eleven companies have been shortlisted to benefit from the fund.

“We have so far shortlisted 11 companies. We have made our presentation to the Ministry of Transportation for them to oversee that the four primary lending institutions as required by law come up with guidelines so that we can disburse. After this, the stakeholders would be asked to come up with the specifications of vessels they want to procure,” he said.

Also making clarification on the disbursement of the CVFF, the Executive Director, Maritime Labour and Cabotage Services, Victor Ochei, said the Treasury Single Account (TSA) policy has affected the timely disbursement of the fund.

He explained that contrary to insinuations that the money belongs to the shipowners, it is actually owned by the Federal government.

Giving a breakdown of the fund and its currency components, Ochei said as at the last update received by NIMASA, the dollar component stood at $209m and N32billion.

“The CVFF account is not under NIMASA’s control in the sense that it cannot use the money. It has to go through a process and that is why we have not been able to disburse the fund.

“With the way the Cabotage Act of 2003 is designed, disbursement from primary lending institutions as stated in the act cannot happen now because in reality, the operations of TSA in all government agencies accounts now comes from TSA. We now have to adapt to a system where we can operate from TSA and that is the process we are going through at the moment.

“The CVFF account has two components. There is a dollar and naira component. As of the time we came into office over a year ago and as at then, we have over N32 billion in naira and $209 million in dollars. As it is, even if we want to do anything with or through the CVFF, we will have to apply for and get approval before doing anything,” he said.