The downturn in the oil and gas sector of the economy has become a major threat to the shipping industry in the country. The fall in the price of crude oil in the international market and the restiveness in the Niger Delta region have led to significant declines in oil production in Nigeria, with attendant negative consequences for the indigenous shipping industry.

Local shipping firms in the country are consequently at great risk and may collapse with the billions of naira invested in them by their owners,  partly using loans sourced from Nigerian banks. If they are allowed to collapse, they will also go down with the jobs of thousands of their employees and the millions of naira   they pay to the Nigerian government annually in form of taxes and sundry levies, such as the cabotage fees.

Certainly, Nigeria cannot afford the collapse of the local shipping industry. The Federal Government should intervene on behalf of our shipping companies and put them on a firm standing.

 HIS is more so as local shippers are the primary casualties of the shrinking oil production in the country. This is quite apparent as the international oil producing companies are now cancelling their shipping contracts with Nigerian-owned shipping firms which have served them faithfully over the years, in favour of foreign shipping companies. One thing that has become clear is that our local shippers have been pushed into troubled waters, from which they must now be quickly rescued, if they are not go down and further compound the nation’s economic woes.

The time has come for the government to intervene in this critical sub-sector of the economy to save the humongous investments in oil vessels and other shipping equipment by our local investors. It is necessary to save the jobs in the industry, and ensure that the taxes and levies from local shipping firms are sustained.

The seriousness of the plight of the nation’s shipping industry can be gleaned from the fact that as at August 26, 2016, over 3000 dockworkers had been laid off by various shipping companies, terminal operators and logistics firms. The Dockworkers Union of Nigeria, at the time, rightly attributed the massive job losses to the failure of the Federal Government to meet its joint venture obligations to the international oil producing companies, which the shipping and marine logistics companies service. Over 20 shipping firms were also reported to have left the country over low business, while many more have either left or gone out of business since that time.

This dire economic outlook of the shipping industry does not bode well for Nigeria at this time that unemployment is raging in the country. Neither the declining oil production nor its attendant deleterious impact on shipping and other oil logistics companies is good for Nigeria’s economy. The government, therefore, has a responsibility to address this problem. The shipping companies that have, over the years, added great value to the nation’s economy through job and wealth creation, and have invested millions of dollars in borrowed funds in the acquisition of oil vessels, platform support vessels as well as crew and security boats, should not be abandoned by the Nigerian authorities.

One good place for the government to begin its intervention is to renew its commitment to meeting its joint venture obligations to the international oil producing companies. This will go a long way in boosting activities in the upstream oil sector and keep shipping and allied oil logistics companies busy.

In these difficult times, the Federal Government also has a responsibility to design policies for the protection of local shipping firms from the penchant of international oil companies for patronising foreign shippers, at the detriment of Nigerian-owned ships. It must weigh in on the side of Nigerians who took the bold and timely decision to invest in shipping at a time that there were no local players in the industry. The current difficulties in the industry are leaving the local shippers few options, other than the massive retrenchment of their workers. The government should reduce the high charges at our ports to boost the local shipping industry.

The commercial banks and other financial institutions that are heavily exposed to our shipping firms also have to design strategies to help the  firms weather this storm. They may need to reschedule the repayment of the huge, multi-million dollar loans given to the shipping firms. This is more so as many of these loans were given many years ago when the naira was exchanging at between N100 and N160 to the dollar, compared with now that the dollar is exchanged at between N350 and N520 to the dollar.

We call on all industry stakeholders, especially the Federal Government and its relevant agencies, to resolve the challenges confronting the shipping sub-sector of the economy.  In particular, the Nigerian Content Development and Monitoring Board (NCDMB), National Petroleum Investment Management Services (NAPIMS), Nigerian National Petroleum Corporation (NNPC), the Central Bank of Nigeria (CBN) and the commercial banks, should do whatever is required to boost the oil and shipping industries in the best interest of the economy.