The general secretary, Indigenous Shipowners’ Association of Nigeria (ISAN), Capt. Niyi Labinjo, is one man who is passionate about Nigeria’s maritime industry. From a naval captain to a shipping line owner and maritime analyst, he has a great wealth of experience in his profession. In this interview with SAMSON ECHENIM, Labinjo speaks on how the poor implementation of the Cabotage Law is costing? the country? five million jobs and billions of naira in capital flight. Excerpts.
Nigeria still ranks 146th out of 183 countries in terms of efficiency of its ports according to the World Trade Organisation (WTO). This is in spite of the concession of terminals which has brought about significant improvement. What is responsible for this poor record?
Shipping cost is about 40 per cent. The transport element itself is just 11.5 per cent. The other cost is associated with handling cost because there is the problem of double handling. So, our shipping cost is 40 per cent, whereas Europe’s shipping cost is five per cent, including handling cost. So, if you buy goods for N100 it will become N105 with the shipping cost. In the case of Nigeria, it will rise to N140 by the time it comes out of the port. The transportation element in our own case is 11.5 per cent of the cost of goods. The other 28.5 per cent comes in as a result of double handling, where more than one agency or contractor is doing one job. This is one of the factors responsible for the inefficiency of Nigerian ports. In the Nigeria system, we have about 27 agencies at the port. All we need is one agency, which will be in control of all the happenings and simply contact all other agencies on phone. All other agencies should be a phone call away. They don’t have to be located inside or around the port. That is the way it is done in other places.
Eight years after the Cabotage Law was enacted, foreign-owned ships still dominate Nigerian waters. How do the indigenous shippers feel about this?
We feel very bad about it because the Cabotage Act itself is a bill of right. So, when a bill of right is in place, it means that once we have local operators with their equipment in place, foreign ships must never be used. It is not for us to effect; it is the inefficiency in the implementation of the Cabotage Act that is leading to the domination of our coastline by foreign ships. It is sheer inefficiency and the various government agencies responsible for the implementation of Cabotage do not share government’s aspiration, so they are not developing local fleets. If you are put in charge of Nigeria Maritime Administration and Safety Agency (NIMASA), Nigeria Ports Authority (NPA), Nigeria Customs Service (NCS), Nigerian National Petroleum Corporation (NNPC) and the government of the land says we want our own people to handle this thing, it doesn’t lie with you to give excuses why your people cannot handle it.
So, what is the Indigenous Shipowners Association of Nigeria (ISAN) doing about this?
ISAN stands on this position, and it has even gone as far as arresting foreign vessels and taking? their owners to court; and we are still doing that. A situation where a public servant in NNPC says ‘no I cannot allow a Nigerian shipper to handle our oil’, what is that person saying? That person is saying that he does not believe in what the president is saying and does not share the aspirations of the government that put him there; that person is saying he does not believe in the policy of empowering Nigerians, creating wealth for Nigerians, or creating jobs for Nigerians; that person is saying he does not believe Nigerians can handle it. If a public servant continues to say Nigerians cannot handle it, it is because he does not share Mr. President’s aspirations. This is so because if he shares the president’s aspirations, he should know that he’s there to promote those aspirations. He should do everything to ensure that the indigenous shippers are the only ones lifting the products. So, such a person making such a statement should not be on that job a day longer. He should be sacked because he’s working against the interest of the government and the people of Nigeria.
Is it true that indigenous shippers use outdated vessels?
The issue about Nigerian ships being old, or indigenous shippers not having the capacity to lift cargo, still boil down to the same thing. You see, when we talk about ships or aircraft, it is not about age, it is about about maintenance. So, if as a civil servant, you are in charge of NIMASA, NPA, NNPC, your job is to ensure that Nigerians know how to do it, so that they will get it right. We are talking about making them to work within Nigeria. They are not asking them to go to Britain or America; we are saying that they should work within Nigeria. So, let us learn even if we don’t know. A lot of times, they hint this issue of Nigerian ships being old. If the ships are new and they have no jobs to do, what will happen to them? They won’t make returns and will still become old. So, it is not a matter of being new or being old, it is a matter of getting the contracts.
Give them the contracts. No foreign vessel will come all the way to Nigeria and be waiting before it will get job. They get the job while they out there and they come and work here. Give us that job and we will get the ship for you. Road contractors don’t go to buy equipment when they have no contract. They get contract before they buy equipment. Sometimes, they lease the equipment after they get the contract. A ship is a piece of equipment. Give us the contract and we acquire the equipment. Every time the Nigerian civil servant says anything against the ability of the Nigerian shippers to lift Nigerian cargo, what he’s saying is that he does not agree with Mr. President on his policies concerning the empowerment of Nigerians through Cabotage and Nigerian content laws, and that he does not share the aspirations of Mr. President towards creation of jobs for Nigerians. Mr President is there to encourage Nigerians, but it is the inefficiency in the implementation of Cabotage Act that is making the indigenous ships non-functional. And furthermore, all those excuses – they are old; they have a single haul; they are too small; they are too big – all are imperialist excuses. In shipping, there something called cartel. The cartel determines how things work.
Do you think American ships are not very good? As good as they are, can they work in Britain? They can’t work in Britain because the laws do not allow them. In the same vein, British ships cannot operate in America;? an American ship cannot work in Greece; an Indian ship cannot work in London, not because they are not good enough, but because the laws of the land forbid them. So, if there is a law and the law by default says foreign ships should not work in our waters, it is not for any Nigerian, particularly the public servants, to say that Nigerian ships are old. If a foreigner says so, he should be ignored.
As an industry analyst, you may have articulated in real terms, how much does Nigeria lose as a result of non-implementation of the Cabotage Act. How significant is the loss?
Nigeria is losing N2trillion annually from shipping business, that is, the transport element in shipping. Now, from? fisheries (because we are not protecting our waters and other nations are taking our fish away and we are instead importing fish), we are losing about $2billion, that is about N300billion from fisheries alone). Then we are also losing the entire insurance of that amount, because if these ships are working, they will be insured. So, our insurance companies also lose N16.5billion. In terms of employment, Nigeria is losing five million jobs.
How did you come about these figures?? ?
It is very simple. Nigeria is importing 100 million tonnes of cargo, general goods, annually, according to 2010 estimates. In 2009, it was 93 million tonnes, 87 million in 2008 and 80 million in 2007. If you look at the number of ships to be engaged, the total number of ships that called in Nigeria for one year is over 4,000, so you can imagine where 4,000 indigenous ships are working. Then we have our oil. We produce 2.5 million barrels per day. In one month, that gives us about 70 million barrels. Over 20 ships are needed to lift the oil. So, we calculated the number of ships that are required in every sector. We also realised that we need about one million direct employments. But you know that shipping also has ancillary services providers, including the financial sector – banks and insurance. So, if the indigenous ships are working well, won’t these people be working well, too? We have empower Nigerian ships and make sure the system is working well, which we can do, because there’s cargo to lift. What determines whether a ship is working or not is the cargo. Once the cargo is there, we have no problem. So, we have analysed all these and have found out that about five million jobs would be created if we allow the indigenous ships to be at? the centre.
The Cabotage Law in the maritime sector is similar to the petroleum industry bill (PIB). Do you think the PIB would be better implemented?
This is why Mr. President must look very well at the public servants he puts in critical positions. Some Nigerian civil servants do not share the government’s aspirations. For example, NIMASA is a very critical position in the maritime sector and the government should be mindful of who heads that agency. Look at the success story we are getting from the local content concerning engineering. If you pass in front of Marina, you will see one big oil rig. They have come there to repair their ship. Before now, they would take it to Houston, but because we insist that no more shall it be done in Houston, they had to bring it here to Nigeria. So, will Nigerians benefit or not? The government should put the right person at NIMASA and structure it in such a way that it is effective. It doesn’t mean that because somebody is a lawyer, or an accountant, he can work anywhere. Maritime business is a professional business. Just as you cannot make a pharmacist as attorney-general or justice minister, or bring a carpenter to become the editor of a newspaper, NIMASA should be manned by the right person.
How can anyone think that there’s room for an accountant to head a maritime regulatory agency?
The maritime industry is bigger than the aviation industry. 80 per cent of world trade is done by sea. In the case of Nigeria, 90 per cent is done by sea. So, we have more resources or inflow from maritime than from aviation, yet we have an aviation ministry, but we don’t have a maritime ministry. The maritime sector is bigger than agriculture, yet we have a ministry for agriculture, we have banks for agriculture, but we don’t have a single bank for maritime business. Comparing them indices-by-indices, maritime is 21 times more than aviation in terms of revenue inflow. When one aircraft falls, the country will mourn, the minister will visit and they will write many letters. But here in Nigeria, 16 ships were wrecked and not a single letter from the president to condole with the investors. You know why? When there is a plane crash, one big man, or his relative, will be involved. So, those of us at the sea, we don’t have relatives? So, those working in the ships, their lives are worthless?
Having experienced maritime from various sides as a naval captain too, are you willing to work with the government to make the maritime sector better?
Oh yes, if they will give me a free hand. There’s no point engaging a professional and restrict his ability to perform. Engr. Ernest Ndukwe had a free hand as the head of the Nigeria Communications Commission (NCC) and he transformed the telecommunications sector. In aviation too, they gave Demuren on the job and the free hand as well, and he did turn around the sector. So, if the government makes me a minister of maritime or the director-general of? NIMASA and gives me a free hand, it is something I’m very much at home with. A professional will become ineffective once you limit him.
Why is it that we don’t have big players in indigenous shipping?
We do have big indigenous shippers. What do you mean by big players? Capital Oil is big. Zenon is big. What we need is the contract. Give me a contract of $1billion? today, I will get funding.? If you give me contract for 10 ships, all I have to do is to go to my bank. If my bank does not have the money, it will go and borrow. If by default Nigeria has made the laws – the local content Act, the Cabotage Act, the shipping Act, it behoves on all the people heading the relevant agencies to implement them to the letter. If they want it changed, they should go back to the National Assembly. So, for any one of them not to do what the law says is anti-Nigeria and a breach of their oath of office. Such people should be relieved of their offices immediately. We are having many pirate attacks. Why won’t we have it? We will have it because we have able-bodied men who pass out of our various shipping institutions, as inadequate as shipping institutions appear to be.
Those of them that graduated from there have no jobs to do. You know that training in seafaring is paramilitary for very obvious reasons. So, you now see young men and women with paramilitary training roaming the streets. They become easy recruits for piracy. Nigeria created various economic policies and goals, but there’s none of such programmes for the development of maritime. Lately, the president set up an economic team and maritime was not represented, and this is a country that produces 2.5 million barrels of oil per day? – and all lifted by sea; this is a country that imports 100 million tonnes of goods every year, all lifted by sea; we import $2billion worth of fish annually, all lifted by sea. Should such a country not have a lot programmes to do with its maritime development? Should such a country have an economic team that will not consider maritime to have a representative? In everything we do, in all our economic patterning as a nation, we should be carrying maritime along.
Oil is a non-renewable commodity, whereas maritime has been there through ages, and it will always be there. Why can’t Nigeria be the hub of West Africa in terms of maritime; after all, 76 per cent of shipping activities in west and central Africa takes place in Nigeria. So, why don’t we create a maritime ministry, a maritime bank, a big sea port and an enabling atmosphere. We already have enabling laws, let us implement them and five million people will be employed. What stops Nigeria from producing 10 million seafarers so that we use some and export others? They don’t all have to work in Nigeria. We only have to make sure that their training is of world standard, and they will work anywhere in the world.? ?
Your ship, the Ray, was one of the 16 ships washed offshore last year. There was no insurance coverage for that loss. Why is this so? Does it mean that no insurance company in Nigeria is ready to insure ships?
It was natural disaster and no insurance company will cover a loss from a natural disaster. What happened on February 13 was a storm that blew across the world; it was not only Nigeria. It affected us here because it wrecked 16 vessels. Those 16 vessels are estimated to be about N2billion. We lost that much but we kept quiet. The people who are working in those ships and companies are jobless? today, whereas the man in Chile was relieved of his job because he failed to give adequate information about the storm to seafarers. The man in Sweden did not only provide minute-by-minute information, but also provided safety equipment for seamen, who still remained at sea and who must be saved from the storm. Our own meteorological department did not give us any warning; NIMASA did not say anything. We all woke up to see our vessels set ashore.
Do you think Nigeria needs another maritime safety agency?
No, we don’t need another maritime agency. Let us make the existing one effective; that’s all.
Considering the challenges in indigenous shipping, what motivate you in the business?
This is the business I have known all my life. I have had very good training, so what I’m doing now is only a continuation from the Navy to shipping operation.
?