The Director-General of the Nigerian Maritime Administration and Safety Agency (NIMASA), Dr. Dakuku Peterside has identified foreign dominance as the most pronounced challenge common to the maritime and the oil and gas sectors in Nigeria.
Peterside made this known in a paper he presented at a one day sensitization seminar on Local Content Development in Shipping, Oil and Gas Logistics Operations in Nigeria titled: The Role of Shipping in Oil and Gas Logistics Services, organized by the Maritime Association of Nigeria (MARAN) in Lagos yesterday, regretted that despite the huge activities and revenue generated by these two industries, their impact in terms of employment and generation of economic growth has been so low.
Represented by the Assistant Director, Shipping Development of the agency, Mrs. Anna Akpan, the NIMASA boss added that the oil and gas sector of the Nigerian economy accounts for almost 90% of the foreign exchange earnings for the country but less than 20% contribution to GDP and 5% of total employment which according to him was a misnomer.
He posited that the situation in the maritime industry was not different saying that Nigeria which was ranked the 7th largest oil producer in the world was the only oil producing country that does not carry a drop of its crude.
According to him, “Industry statistics shows that the country generates an estimated annual cargo throughput of 150 million metric tons with freight earnings in excess of $5billion in her international trade transactions. 95% of this income is earned by foreigners, with the job deprivation to the country that goes with it.
“The same dominance by foreigners is also extended to the domestic shipping market, where the estimated $3billion annual marine related spending in the oil and gas production activities are virtually earned by foreigners.
“This situation of so much activity and so much money, but little impact on the lives of Nigerians, accounts for the high level of frustration and restiveness in the country especially in the Niger Delta region. With this in mind, the Federal Government of Nigeria came up with the Cabotage law in the maritime industry and the Local Content policy in the oil and gas sector to tackle this challenge”.
He explained that the Nigerian Cabotage law is primarily an economic interventionist policy by the government adding that the law which was designed to be a catalyst to drive the development of the indigenous maritime industry as a whole was structured along four major target areas which were now referred to as the four pillars of the Cabotage Act 2003 namely; that all Cabotage trade vessels in Nigeria must be owned by Nigerians, built in Nigeria, manned by Nigerians and registered in Nigeria.
The apex maritime regulatory agency boss further said that that the objective of the Cabotage law was to achieve self-sufficiency in the area of domestic tonnage capacity, building capacity, manning capacity and registration.
“However, due to the fact that the indigenous capacities were not adequate, the concept of waivers was introduced to allow for a gradual build-up of indigenous capacities and also to avoid destabilizing the smooth running of the Nigerian oil and gas sector which is the target market of the Cabotage law.
“Balancing the act of implementing the Cabotage law and not destabilizing the smooth running of the oil and gas sector has not been easy, but with the enactment of the Local Content policy in the oil and gas industry, NIMASA was presented with a veritable tool to leverage on to effectively implement the Cabotage law in order to boost the indigenous maritime capacity”, he said.
Speaking further, he observed that in order to create a platform for the country to maximize the opportunities available in the oil and gas industry, the Federal Government in 2005 enunciated the Nigerian Content Development Policy which he said spelt out activities in the oil and gas industry that must be carried out in Nigeria even as it was assumed that when this policy was carried out, it would rapidly develop Nigerian skill-set in the industry and also build the required capacity in the country.
In his words,” The aim was to achieve at least 70% local content target in areas such as engineering design, fabrication, well drilling, operations and maintenance, manufacturing, insurance and most importantly for Nigeria, offshore oil and gas shipping logistics . In 2010, the Federal Government signed into law the Nigerian Oil and Gas Industry Content Development Act. This Act provides a roadmap for the achievement of these goals by laying out guidelines for Nigerian content plan, supervision, coordination, monitoring and implementation of Nigerian content”.
He disclosed that while the Nigerian oil and Gas Content Development Act 2010 covers the broad spectrum of the production activities of the oil and gas industry in Nigeria, which includes shipping logistic related activities, the Cabotage Act 2003 on the other hand, dealt specifically with all coastal shipping trade which also included all oil and gas shipping logistic operations in Nigeria.
“These two Acts were not meant to be in conflict with each other, but to achieve the same purpose. It is therefore important that the two implementing agencies of these two laws must identify areas of common interest and design a strategy for an effective implementation for the benefit of the country which NIMASA has been doing over the years.
“In order to leverage on the local content policy to boost indigenous maritime growth in Nigeria, NIMASA has examined the provisions of the Local Content Act as it relates to maritime activities and has come up with how best these provisions can be effectively implemented within the ambit of the Cabotage law”, he added.
He therefore believed that with an effective synergy between NIMASA and NNPC in the implementation of the Local Content Policy and the Cabotage law, the maritime industry in Nigeria would be better for it saying,”These two Acts have presented a clear opportunity for Nigerian entrepreneurs to gradually build their capacities and take over the marine logistics business of the oil and gas industry in Nigeria.
“The opportunities are there, the opportunities are real, only those who take advantage of them today would reap in the future”.
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