FG projects 10% growth in maritime industry

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…As NIMASA predicts more shipping activities

L-R: Rector, Maritime Academy of Nigeria, (MAN) Oron, Commodore Emmanuel
Duja Effedua, Captain Martins Fakrongha from Headquarters Western Naval
Command, Executive Director Finance & Administration, Nigerian Maritime
Administration and Safety Agency (NIMASA), Mr. Bashir Yusuf Jamoh, Chairman,
Ship-owners Forum, Mrs. Margaret Orakwusi and the DG NIMASA, Dr. Dakuku
Peterside, during the public presentation of Nigeria’s Maritime Industry
Forecast for 2019-2020 held in Lagos on Tuesday, 29 January 2019.

The Federal Government on Tuesday projected a 10
per cent growth in the Nigerian maritime industry.

This was contained in the 2019/2020 maritime
forecast unveiled by the Nigerian Maritime Administration and Safety Agency
(NIMASA) in Lagos.

The forecast, the second in the series, tagged
“Harnessing the Maritime and Shipping Sector for Sustainable Growth.

It is meant to give direction to investors and
stakeholders in the industry in their planning and investment decisions as part
of efforts to attract more foreign direct investment to the economy.

Major plans covered by the forecast are the economic environment, the maritime industry (local and global),
regulatory framework, and emerging opportunities and challenges.

Speaking at the unveiling ceremony, the Director
General of NIMASA, Dr. Dakuku Peterside, said this year’s forecast will be addressing how emerging trends in the global maritime industry
would affect the Nigerian maritime sector as well as domestic factors that will
influence the sector. Dakuku said the maritime industry held a lot of promise
for Nigeria.

“The maritime sector has the potential of contributing at least 10% of
Nigeria’s GDP in no distant future, as Nigeria has the biggest market in
Africa; and generates about 65-67% of cargo throughput in West Africa, and 65%
of all cargo heading for these regions will most likely end up in the Nigerian
market,”the DG said.

According to
the forecast, the outlook for the economy in 2019 reflects, on the global side,
concerns about a substantial global economic growth slowdown, likely higher US
interest rates, a stronger dollar and volatile oil prices, possibly averaging
below US$60pb, and domestically, the impact of sentiments surrounding the 2019
general elections and post-electoral transition.

The empirical
analysis projects the growth of the total fleet size in 2019 over 2018 to be
10.33%, easing to 8.75% for 2020. Oil tanker fleet size is projected to
decrease by 11.2% for both 2019 and recover to a positive growth of 0.11% by
2020.

Non-oil tanker fleet size is estimated to increase by 14.3% in 2019 and
10.2% in 2020, while Oil Rig count is projected to increase by 6.98% and 6.5%
for 2019 and 2020, respectively.

Dakuku identified asset building/acquisition and
human capacity development as two factors that would enable Nigerians play a
major role in the maritime and shipping sector.

He said shipping is capital
intensive and the Cabotage Vessel Financing Fund (CVFF) will not be adequate to
address the huge demand for maritime asset. This propelled the Agency to seek
other ship financing models, he said.

“We have been engaging
with government at the highest level to push for special intervention fund,
special interest rate and other incentives that will drive optimal performance
in the sector. We shall not relent in our drive to put the right framework
together to help beneficiaries and investors have good return on investment.

“The country is also making huge investments in human capacity development in
the sector, which means that more Nigerians will get involved in shipping,
especially, in shipping operations,” Dakuku
stated.

The NIMASA DG
also disclosed that the government had made consistent effort to drive changes
in the maritime and shipping sector through regulatory and infrastructural
developments.

He added that the main public bodies regulating the maritime and
shipping sector had all keyed into the government’s strategies to reform the
operating environment and improve on the country’s ease of doing business
index, which has the potential of attracting more businesses to the maritime
industry.

He said 2018
offered government opportunities for strategic changes in policies to restore
growth in the economy, invest in the people and build a globally competitive
economy.

Dakuku assured the stakeholders of the Agency’s resolve to push for
reforms that will help grow the maritime sector, noting that building and
enhancing indigenous capacity in the shipping and maritime sector and ensuring
a conducive playing field for operators to tap into the vast economic benefits
inherent in shipping will be made a priority.

A consultant
and faculty at the Lagos Business School, Dr. Doyin
Salami, who reviewed the forecast, noted that it was
intended to provide the context in which the sector will operate in 2019 to
2020.

Salami said it was
expected that in 2019, the Petroleum Industry Bill (PIB) will be passed; the
anti-piracy bill will become law, and more International Maritime Organisation
(IMO) conventions would be domesticated in Nigeria.

Salami stated
that the general election and its aftermath was a major factor that will affect
the economy this year. The other, according to him, is happenings in the global
economy, especially the United States/China trade war.

He also
observed that NIMASA based the forecast on the Economic Recovery and Growth
Plan (ERGP) of the Federal Government and charged stakeholders to key into the
Agency’s vision.

Earlier in
his welcome address, the Minister of Transportation, Rt. Hon. Rotimi Amaechi,
emphasised the importance of shipping in poverty alleviation and wealth
creation.

Amaechi, who was represented by the Deputy Director, Cabotage and
Shipping Development in the Ministry, Mrs. Gloria Adie-Ayabie, informed
stakeholders that the Federal Government had initiated reforms to facilitate
the development of the Blue Economy, saying this involves the enactment of laws
and domestication of relevant international instruments.

Stakeholders
in attendance at the event, including the NIMASA Board Chairman, General
Jonathan India Garba (rtd.), and Rector, Maritime Academy of Nigeria (MAN),
Oron, Commodore Emmanuel Duja Effedua (rtd), agreed that the forecast was a
step in the right direction and called for continuous support for NIMASA to
enable it achieve its mandate of realising a robust maritime
sector.

It would be
recalled that the Agency unveiled the first maritime forecast in the industry
in February 2018, projected at 5% growth along with other potentials, most of
which were achieved and served as a guide to stakeholders and investors.

There
was a significant growth and development in the sector and it is also expected
to improve in the year 2019-2020.