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•Red tape, weak laws sink local players
By Steve Agbota
Despite local content laws meant to protect indigenous operators in Nigeria’s maritime sector, about 95 per cent of local ship chandlers have been forced out of business, Daily Sun has learnt.
Fingers are being pointed at the laxity of the enforcement of Nigerian laws, a harsh operating environment, inadequate access to capital, activities of government agencies and other bureaucratic processes in the country.
However, this has made it difficult for Nigerian ship chandlers to compete favourably with their foreign counterparts in the dollar-dominated business. Daily Sun learnt that Nigeria is losing about $15 billion to foreign dominance in the ship chandling business and other allied services, and has also lost more than 25,000 direct and indirect jobs.
Established through an Act in 1958, the chandling business is made up of retail dealers who specialise in the supply of equipment and goods for ships, known as ship stores.
Ship chandlers supply items such as rosin, linseed oil, whale oil, tallow, rope and cordage, chisels, planes, boats, hooks, leather goods, engine oil, water and other materials that the captain and other crews of the ship may require.
By law, ship chandling was designed to be driven by local operators. But the implementation of the necessary policy framework witnessed the entrance of foreign operators. Section 24 of the Customs and Excise Management Act (CEMA), which used to regulate the business, has reportedly not been reviewed since 1968 to reflect emerging trends in the sector.
Daily Sun also learnt that foreigners who have single-digit interest rates come into Nigeria and do all the big jobs ranging from Floating Production Storage and Offloading (FPSO), Floating Storage and Offloading units, rigs, platforms, floating barges, LNG vessels and super oil tankers. These foreigners bring offshore finance to carry out these jobs, noting that, unfortunately, Nigeria does not participate because there is no support.
Operators who spoke with Daily Sun alleged that after the Nigeria Customs Service (NCS) regulates ship chandling practice in the country and gives approval, other agencies like the Nigerian Navy, Nigerian Police, Civil Defence, Immigration, among others, will still proliferate the approvals. These bureaucratic processes have made Nigeria unstable for ships and the reasons why they go to Ghana, Togo, the Republic of Benin, Côte d’Ivoire and South Africa with extra fuel to take full ship chandling operations en-route Nigeria.
Speaking with Daily Sun, the Advisory Head/Chief Executive Officer, Kamany Marine Services Limited, Charles Okorefe, said that the challenges associated with the local ship chandlers have to do with the laxity of the enforcement of the nation’s laws.
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“We allow every person, even in declaring and forwarding fields, you find out that foreigners are also making very strong inroads into cargo handling. Something you cannot see even in Cotonou, as small as they are.
“So when there is a crack or a hole in a building, what happens? Lizards will crawl in, so when you don’t enforce your laws, which is what you see. Otherwise, the ports are supposed to be no-go areas for foreigners, as it is elsewhere.
“But we allow every person to go in, foreigners, because they have the financial muscle, the muscle their way, and muscle out Nigerians. So what can be done is the enforcement of our laws to prevent foreigners from taking over. It’s as simple as that,” he explained.
He added that licensing foreigners to do what locals are supposed to do is a problem, and that is they are taking over what is lawfully owned by the Nigerians.
“Who are those licensing them to do chandling? Chandlers are licensed by Customs, just like customs brokers or customs agents. So how do these foreigners get involved? Who provides the inroads for them? These are the critical questions you need to raise.
“And that is the only way the issues can be resolved. When foreigners are put in their place, and locals are encouraged to do the job. End of story,” he said.
Conversely, an operator, Timothy Eberechi, said that it is unfortunate that Nigeria loses over $15 annually due to the foreign domination of the ship chandling business in the maritime sector despite the 95 per cent allocated to indigenous companies in the Nigerian Local Content Policy Act.
According to him, this situation required the urgent need for the government to address the factors that hinder local ship chandlers from playing a dominant role in the maritime subsector of the economy, which used to generate huge foreign exchange.
“It is equally sad that only one per cent of Nigerian chandlers are currently engaged by the multinationals operating in the nation’s petroleum upstream sector. Previously, Nigerians were at the forefront of the lucrative business that is denominated in foreign currencies.
“However, following the exit of 20 shipping firms from the country a few years ago due to low business, the bulk of the business is now in the hands of foreigners. 95 per cent of chandlers are no longer in the business due to financial burden and lack of support from the government. Most chandlers who were chased out of the industry by their foreign counterparts are now into clearing and forwarding, farming and other businesses to survive.
“The ship chandling business needs a kind of government participation to assist the local ship chandlers have more capital base to do this job. So the issue with indigenous chandlers, it is their territory, and it is their right to protect it because Nigerians cannot go to London or Italy, for instance, and be licensed as ship chandlers. The government needs to streamline all the agencies that are causing bottlenecks for the regulation of ship chandling at the nation’s ports,” he said.
