…Says Nigerian tax laws stalling re-establishment of national fleet
As argument continues in some quarters as to the readiness of Nigeria as a country to participate in the African Continental Free Trade Area (AfCFTA), the Chairman, Starzs Investment Company Limited, Engr. Greg Ogbeifun has said that the maritime industry stakeholders are ready from the private sector perspective to trade globally but are hampered by government policies that don’t create enabling environment even for this noble initiative to thrive.
Ogbeifun who made this submission while speaking to the press on the sideline of the 3rd annual lecture and awards with the theme, “Assessing Nigeria’s Preparedness to Maximize the Gains of AfCFTA”, organized by Primetime Reporters in Lagos last week observed that the development remained a challenge.
Citing an example, Ogbeifun who is the immediate past President of the Ship owners Association of Nigeria (SOAN) said, “For fifteen years, I have been applying for a long term lease of my facility in my ship yard in Onne. I got that Onne facility in 1998 and I started operating the ship yard in the year 2000 successfully. So, the government policy is to give you five years lease and watch if you do something with it. If you don’t, they will take it back but if you are doing something with it, they will give you 21 years lease to attract investment if you want to expand.
“For fifteen years, I have been applying for this, so, I couldn’t get foreign investment to develop the ship yard. The project is about $150 million, to expand it so that we can build our own ships. Like you know, my last ship was built in China, our ship yard now can build that ship in Onne, with what we are developing. Thanks to Hadiza (Bala Usman), when she came on board, she took on the fight with the Honourable Minister and I won’t talk about the people in government who sat on it because I wouldn’t put certain people in my board. That is the challenge.
“So, eventually, they pushed through and now that I got my 21 years lease, actually, that was government’s 70th birthday present they gave to me, guess what? We have gotten Transaction Advisers who are running with the project and people are fighting to put money to make it a reality.
“So, government has a role to play if stakeholders, private sector can actualize their potential and what they can do. We will continue to point at the government. The government is not doing enough to create an enabling environment for economic, job creation, you name it. So, the leadership needs to wake up. We have to tell them the truth, they are not doing the right thing, they are creating challenges everywhere.”
He however urged the media to continue reporting stakeholders’ opinion who according to him would not give up speaking hoping that as the government listens, they will begin to feel sorry for the nation’s youths, millions of whom he said were suffering when they shouldn’t be suffering.
“Why am I a motor mechanic in Benin? I saw an opportunity to create something different that will challenge the government. Now, if you come to our workshop, we have university graduates with Masters proudly telling you I am a mechanic, the technology is there, it is ICT driven and of course, I take the lead as the Chief Mechanic of the Workshop”, he said.
On what is stalling the re-establishment of the national fleet, he pointed out that the Nigerian tax laws was responsible as it did not favour global trading arguing that the British, the Greek or the American would get zero duty, five years tax holiday and zero VAT once he buys a ship and flags or registers in the country.
He explained that the governments of those countries created it because “it is a capital intensive business, so, they make it possible for you to manage your cash flow and be competitive.”
“So, now, why would you an importer hire a Nigerian ship and pay a hundred Dollar per tonne for your freight when the Greeks are giving you the same ship at $70, you will naturally patronize him. Our laws will make you so uncompetitive that you will never even make it and they know these things and we are now saying, why don’t you look at the benefit of enabling a fleet to grow, job creation, you are reducing your capital flight, you are creating skill in-country, everybody is benefiting – maritime lawyers, maritime insurance, brokers and everything.
“Now, when you compare that benefit with what the entire customs generates in billions and in trillions, so, the customs don’t even want to hear anything like zero duty. Customs is government, the other side is government, let everybody sit down and say okay, what do we gain? Put it on the scale, that is what Ghana did at a time. Ghana decided to review their tax laws to enable the middle class emerge as a private sector economic driven country and everybody is rushing to Ghana now”, he submitted.
However faulted the claims by the Transportation Minister that the re-establishment of national fleet was being stalled because Nigerian ship owners do not have money to fund the fleet acquisition noting that “I told him it is a lie, we have not gotten to the point where anybody was expected to bring money on board.”
Ogbeifun continued, “He set up that committee, we followed him to Singapore and in Singapore, the PIL people were very bullish, they want people to sin MOU. We came back and the PIL people wrote a letter to the committee that our Nigerian tax laws does not favour commercially competitive fleet anywhere in the world and that they were pulling out. It is in black and white. After all, some of us have 100% funded our own ships, so, how can he say that we don’t have money to put in there?”
Photo: Chairman, Starzs Investment Company Limited, Engr. Greg Ogbeifun.
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