Cabotage regime, also known as “The Coastal and Inland Shipping Act”, was enacted in 2003 so that the business of coastal shipping would be more favourable to indigenous ship owners.
Six years after the law, hope of indigenous ship owners having a vibrant coastal trade have become unrealistic.
The Act, which became operational in May 2004, was designed, basically, to promote and stimulate indigenous participation in coastal shipping business.
Despite huge sums of money sunk into the scheme over the years, its core objectives are yet to be realised.
In 2008, the agency overseeing the implementation of Cabotage, the Nigerian Maritime Administration and Safety Agency (NIMASA), spent N165 million in carrying out what it described as “Cabotage awareness campaign and mid-term evaluation of Cabotage”.
NIMASA also indicated in its 2008 budget performance — presented to the Senate Committee on Marine Transport — that it spent N300 Million on cabotage enforcement, routine safety compliance inspection, ship survey/registration and other expenditures.
The Chairman of the Committee, Sen. Gbemi Saraki, says that the recent review of the Cabotage Act shows that implementation of the Act has been very poor, particularly by NIMASA, the organisation charged with its enforcement.
“Since we agreed that objectives of Cabotage have not been met, six years after the law was enacted, there is need for a complete overhaul of the implementation apparatus”.
According to her, it appears to be common knowledge that in the past, the agency and to a large extent, the Federal Ministry of Transport, has no will to implement the Cabotage law.
The legislator enquired about what NIMASA has done in the last two-and-half to three years, to assist the Nigerian ship owners to acquire new vessels.
“How many ships have been added to the indigenous capacity, whether for international shipping or for coastal shipping?” Saraki asks.
Stakeholders in oil transport business note that the enactment of the Cabotage Act (which is currently under review in the National Assembly), has not created the desired enabling environment for the indigenous shipping operators.
They say that NIMASA could not empower them to fully participate in the lifting of the nation’s oil and gas.
Out of 2,000 vessels involved in Cabotage trade — comprising passenger vessels, crew boats, fishing trawlers, barges, tankers, offshore service vessels, tugs and supply vessels — less than 10 per cent are by indigenous ship owners.
They say that as far as oil transportation is concerned, only a mere 10 per cent of the operating vessels belong to Nigerians.
The Chairman, Indigenous Ship Owners Association (ISAN), Chief Isaac Jolapamo, says the stand of the association is that the Cabotage regime has failed in all its ramifications.
Jolapamo says that Cabotage failed because Nigeria could not take the initiative of doing it right at the onset.
Indigenous ship owners are worried that foreign shipping operators are flagrantly dominating the coastal trade meant for them, especially in the transportation of crude oil.
Jolapamo expresses concern about lack of cargoes, especially oil, for indigenous ship owners to transport.
The shipping magnate has repeatedly called on the Federal Government to assist indigenous operators to increase their fleet in order to be able to compete with the foreign shipping companies.
In 2008, Sen. Ugochukwu Uba, led a committee to review the Cabotage law, to find answers to many questions being asked by the indigenous shipping operators on why, up till now, the law has not brought the desired gains to them.
The terms of reference of the Committee include identification of all the vessels operating in the coastal and inland waters by ownership; examining the modalities for granting waivers and evaluating all the waivers granted so far to foreign shipping operators and the justification for each waiver.
The Committee is mandated to also evaluate the gains of the Cabotage regime to the Nigerian economy, since its inception, and to highlight drawbacks in the implementation process.
The Committee is to determine the total revenue generated from the trade since inception of the Act and identify lapses in the collection of the revenue.
Indigenous ship owners are now asking the Federal Government to empower them through timely disbursement of the Cabotage Vessel Financing Fund (CVFF) and the immediate take-off of the approved Ship Repair and Maintenance Subsidy to improve existing tonnage.
Saraki says that it is a pity that “the CVFF has remained what it is — only a document without any organic linkage with the aspirations of the indigenous ship owners”.
She suggests that prompt action be taken on Cabotage implementation, particularly its enforcement so that the objectives of the promoters of the scheme would be achieved.
Industry operators also note that without the requisite indigenous manpower, the Cabotage regime will never take-off fully.
In its 2009 proposed budget, NIMASA says that priority attention is being planned for full-scale implementation of Cabotage with wide coverage that will ensure the timely achievement of the spirit and purpose of the Act.
“We consider that for there to be successful implementation, acquisition and maintenance of boats for monitoring of operations, acquisition and furnishing of monitoring centers, training of enforcement officers, should be given priority”, says the Director-General of NIMASA, Dr Ade Dosunmu.
The timely disbursement of the Cabotage Vessel Financing Fund (CVFF) is regarded by stakeholders as crucial to empowering indigenous ship owners to sit at their rightful position in the cabotage regime.
Stakeholders believe that the Cabotage Act was good for the nation. They are, however, unhappy with what they describe as its sloppy implementation.
As the government strives to propel Nigeria into being one of the most industrialised 20 nations in the world by 2020, the shipping industry obviously has a big role to play.
Also, the role of indigenous shippers in the attainment of Vision 20:20:20, which is tied to the success of the Cabotage Act, is undoubtedly huge.
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