With the Nigerian economy in recession, the spiralling negative effects have already begun to impact on the operations of key sectors of the economy. One of the sub-sectors that is at the receiving end of the current economic downturn is the shipping business.
Groaning under intense hardship as a result of government policies and global economic problems, the news from the Maritime sub-sector is not heartening, as over 20 shipping firms were reported to have exited the nation’s shores. Consequently, no fewer than 3,000 dockworkers have been laid off by various shipping companies, terminal operators and logistics firms. This is largely due to lack of poor import policies recently introduced by the Federal Government. According to the Dockworkers Union of Nigeria (DUN), the massive retrenchment in the sub-sector was due to the Federal Government inability to meet its joint venture obligation with the international oil companies which are major partners with the marine logistic companies.
The shipping lines exited our shores because of growing losses resulting from declining traffic volumes and recent government import policy.
It will be recalled that the Federal Government last year placed restriction on the importation of about 41 items due to Foreign Exchange scarcity. But, government defended its action and promised to encourage domestic production of some of the goods that could be produced locally. However, the shipping firms are complaining that the ban has adversely affected their operations. Therefore, they are asking that the restriction be lifted or else it will encourage smuggling, diversion of ships to neighbouring countries, leaving our ports virtually empty and general loss of revenue to government.
We urge the government and the relevant agencies in the maritime sub-sector to take a detailed analysis of the complaints that have resulted in the exit of the shipping firms with a view to restore the smooth operations of the maritime industry.
While it is necessary to restrict the importation of goods that can be manufactured locally and save scarce forex, the significance of the maritime sector of which shipping operators play a vital role should not be ignored. Statistics show that since this year, the number of goods imported into the country has shrunk by over 30 percent. This is because the shipping lines are reportedly shifting base to other West African countries in response to government new policy.
Government should review some of the policies as it affects the shipping operations in our shores.
There is need to meet the joint venture obligations with the international oil companies, which are major partners in the sector.
Government should not allow the shipping sub-sector to lag behind in the global sector.
Our country is vastly endowed with coastlines and navigable inland waterways, and strategically placed on the Atlantic Coast of West Africa. And 76 percent of shipping business that takes place in the whole of West Africa is reportedly done in Nigeria. That means that Nigeria should remain a key player in West Africa.
Therefore, government should do everything to contain the exit of shipping firms in our shores and save the jobs of millions of workers. According to Financial Intelligence that monitors the maritime sub-sector, despite Nigeria’s large export of crude and import of over 100 million tons of general cargo, no Nigerian flagship is currently plying international routes.
Also, statistics from the Nigerian Ports Authority (NPA) on ship calls to the country reveal that between 2009 and 2012, Nigeria’s tonnage has grown from 82m tons to over 150m with an estimated freight payment of rising from $4.1bn to above $7.5bn annually. But the participation of Nigerians remains almost zero.
Although the exit of foreign shipping firms may be the opportunity our local shipping firms may be waiting for, we doubt if they have the capacity and competency now to fill the void without harming an already bleeding economy with its other adverse consequences. Government should swiftly intervene and arrest a similar experience that saw the exit of some airlines to neighbouring countries.