Mr. Emmanuel Maiguwa is the President of Maritime Security Providers Association of Nigeria (MASPAN) and President of the Alumni of Maritime Academy of Nigeria Oron (AMANO). In this exclusive interview with MARAN News, Maiguwa speaks on a wide range pertinent maritime issues. Enjoy it:

What are your expectations for this year 2025 and which areas do you want government to pay special attention to?

I am not really particularly about the year. I think serious development will take place when government decides to wake up to its responsibilities. Whether it is 2025 or 2026, like it is said that whenever you wake up, it’s your morning. Generally, I want government to pay attention to what drives the maritime economy. Ships drive this sector and it is not just the availability of ships, but the profitability of running a vessel.

It doesn’t make sense if we encourage Nigeria to move from 200 to 500 ships within a timeframe when they are not operating profitably. So, it is very important that we pay attention to the issues related to operational expenses of a vessel.

Today, we have a situation in Nigeria where if you acquire a vessel from outside, well, there’s absolutely no way you can have a vessel built  here because at the moment, we don’t have the capacity to build.

So, when you purchase a vessel from outside the country, you are paying about 14% in terms of Customs duty for that vessel to trade in our coastal trade. This is a huge cost that puts you  14% above your competitors that are buying the same vessel in Ghana and trading in Ghana.

You also have significant port fees with a situation where the port regime, offshore charges regime for boats have not been separated from the conventional spot market. Vessels are being asked to pay green light fees similar to those that are going to operate offshore in the offshore market contract. Meanwhile, they are actually not going into offshore field for offshore contracts.

 

There are equally other issues related to how vessels are bunkered, how vessels are supplied with water, food and other essentials. For example, imagine every time you are going to board an aircraft from Abuja to Lagos or Port Harcourt, and when you get there, the aircraft has to write an application for Air Force approval before they can take fuel.

Imagine if that is a process that they have introduced into the aviation sector and for each vessel fuel bunker that you will take, you will need to do that for ships. Unfortunately, when we raise these issues that are causing bureaucratic problems in the shipping industry, people turn around to say others are stealing.

 

We also have it on record that people have been stealing petroleum products from filling stations, but the solution was never to introduce police approvals before refilling or selling. Trucks loading from depot to take to a particular filling station sometimes divert it to a black market, yet we never had a situation where the country said go and get police approval before doing that business. These practices have constrained the growth of the maritime industry.There has been lots of clamour for acquisition of Nigerian ships especially with the Cabotage Vessel Financing Fund (CVFF).

What would you recommend as guidelines?

There should be a study that will reveal where our comparative advantage as a country. If you want to buy ships.

what kind of ships are you going to buy?

The outcome of the research should guide the choice of vessels. Perhaps, the study could find that tugboats or security vessels are better investments.
What prospect do they have for us in achieving our goal?

 

Is security vessel or tugboat and the rest going to train our seafarers? To what extent?

These are smaller vessels, so are they going to help us with the biggest problem of carrying cargoes from Lagos to the other eastern part of the country? All these considerations should inform the decision for CVFF disbursement.

 

However, I can give you an example which is something that can stimulate the study. Vessels were built to float on water and the naval engineering factored in the depth of the water. In the past, trading in Asia was done by shallow draft riverboats to be able to assess remote areas, carry more cargoes with a lower draft to assess remote areas. But the development of deep seaports and other transport infrastructure phased those vessels out.

 

Who says that we cannot revive that technology, that naval engineering back. If we discover that there is advantage in moving our cargoes from Lekki deep seaport to Onitsha, to Calabar, Edo, and other places across the nation that have shallow waters, by investing in shipyards that will build shallow river vessels in Nigeria, we can generate enough tonnage.

These shallow river vessels, because they are seagoing, they can load from other African countries. Automatically, you create a regional coastal trade that will overlap the maritime, I mean the Cabotage trade parameters. So, if that is what we discover, we can decide that those operating these kind of vessels could have certain guidelines to assess the fund.

 

The idea of Cabotage is not to make profit out of lending out the money, but to build local capacity. Building local capacity of Nigerians such that a company that has enough capacity to trade locally can use that capacity to grow into operating foreign going vessels. Of course, when such person wants to build his foreign going vessel, he is not going to assess Cabotage funding. However, because he has grown his capacity he can get foreign funds to acquire that ocean-going vessel. It starts with an improved local capacity before one begins to explore international shipping.

The situation where we just want a simple guideline to show how you will assess CVFF is a difficult one.

 

Why has the Nigerian Content Development and Monitoring Board (NCDMB) been successful in collecting and disbursing the NCI fund which is similar to CVFF?

 

The Local Content Act collects just one percent. One percent of the contract value against the two percent that Cabotage is collecting. I am aware that the local content arrangement is in collaboration with the Bank of Industry (BoI) and BoI is a strategic partner with clear understanding of such kind of financing.

 

They have been able to disburse the NCI fund to several people, about six persons that I know have assessed money from the local content funding to acquire vessels. This is because the local content is peculiar. I mean it is clear about what you are buying and for what purposes. If you are contributing to the local content and you go to buy the vessel; you are definitely buying a vessel that would work in the offshore industry. So you assess the money and you acquire the vessel, but the local content will also ensure that you get a contract in the offshore industry. This means that you are protected all through. What protection is the Nigerian Maritime Administration and Safety Agency (NIMASA) going to give those who acquire vessels with CVFF?  There is no protection like the guarantees that the NCDMB avails its operators.

 

The trade that NIMASA is supposed to guarantee you is not existing, which is coastal shipping. Coastal shipping itself, where you will carry cargo from one port to the other. If you turn to the Dangote refinery, some part of it will come back into the petroleum tanker market, where products will be picked from Dangote refinery and taken to maybe Port Harcourt to discharge in tank farms and be distributed against moving by road. Some vessels will come back into that trade, but that is very insignificant.

 

We need to be able to move cargoes from Lekki port. As container vessels discharge in Lekki port, a container freighter should carry these cargoes from Lekki port to Calabar, Port Harcourt, Onitsha and other parts of the country.

 

In cases where the cargoes are dropped in Port Harcourt, it will be transshipped in different ways including barges, smaller ships, roads, etc.

But that is not existing. So I am afraid for those that will even assess the Cabotage funding if it is disbursed today. The only way to be profitable with that venture is to end up buying vessels that will work in offshore oil and gas because the protection for coastal shipping in terms of container freighting will not be sufficient for you to repay the funding.

 

Industry stakeholders are missing this aspect of the CVFF quagmire as we are mostly worried about the disbursement of the fund. It is important to look at the profitability of the operations.