Alhaji Aminu Umar, foremost ship owner and Acting President, Nigerian Shipowners Association (NISA), is the CEO of Sea Transport Services Nigeria Ltd, owners of MT AMIF and MT KINGIS, the only Nigerian- flagged vessels to ever get Oil Major Approvals. In a recent interview with IZUCHUKWU OZOEMENA and GLORIA EHIAGHE, he expressed concern about the dwindling fortunes of indigenous shipping in Nigeria and the need for urgent intervention by government. He hailed the recent merger between NISA and the Ship Owners Association of Nigeria, SOAN, describing it as the best way to start engaging government on how best to reverse the negative trends in the shipping sector for the good of the economy. Excerpts.
Previous governments failed to harness the huge resources in Nigeria’s maritime sector to the advantage of the economy. Now, it appears President Buhari is set to make a difference. What is your advice?
My advice is as a shipowner and as a stakeholder in the maritime industry, first I think it is a good thing that the President has realized that there are huge resources that are yet to be harnessed or tapped in the industry. There are lots of opportunities to develop, not only the maritime industry, but the economy of Nigeria.
As we all know, Nigeria is a coastal country. We have a huge population, which means there is a lot of shipping activities going on in the country. These shipping activities, how do they contribute to our economic development in terms of job creation, wealth creation and revenue generation? There are lots of opportunities that we are missing which we could have utilized.
My advice is, there is need for Mr. President and this new government to come together to engage the Nigerian stakeholders to be able to create this economic development. We are all everyday talking about job creation. We have huge shipping activities which do not contribute to the job creation that we are trying to establish, and the reason is because we are allowing non-Nigerians who are coming with their ships to seize the opportunities and give jobs to their own people in their own country while the business they are getting is here in Nigeria.
What the government should do, I believe, is to look at the relevant laws which are already in existence. These laws are supposed to support Nigerians so that they will be the ones that will own those assets that come to do the shipping activities here in this country. Nigerians can create jobs by employing their own.
Secondly, these Nigerian companies that have these assets that employ Nigerians would be paying taxes to this country. If they are paying taxes, they are contributing to revenue generation. Foreign exchange will come into the country on a daily basis. But today we are giving it to another country because Nigerians are not given the opportunity to participate. Mr President and his new government should sit down and engage the stakeholders. This is a great opportunity for Nigerians to create jobs which government wants, create revenue for the government and create economic development for everybody.
Is it true that for selfish reasons, some highly placed Nigerians in the shipping business back foreigners to register their establishments and reap all the gains to the detriment of the economy?
Yes, there are Nigerians that are acting as commission agents to international companies because back home, they are not given any advantages over their foreigner counterparts to be able to diversify. I think there are ways to make more Nigerians be the owners of such companies. One of the ways is that the government should put policies in place to give Nigerians needed advantages. As a Nigerian shipowner, a Nigerian citizen, running a Nigerian- registered company with ships that are registered in Nigeria, I pay United States Dollars to the Nigerian Ports Authority (NPA) and NIMASA which are Nigerian parastatals. Why should I be a Nigerian paying a Nigerian parastatal in a currency of another country? If I go to Senegal or Lome, I will pay them as a foreigner; I will pay in US Dollar or Euro or CFA as required. It does not make any sense for me as a Nigerian operating in Nigeria to transact business with my own government in a currency of another country.
This is not giving us any advantage. Actually, it makes the demand for foreign exchange in Nigeria to increase. What I feel for a Nigerian company that is operating in Nigeria is if it is necessary to transact business with a Nigerian company or Nigerian government agency, the payment of fees should be in Nigerian currency. This is the official currency of the country; this will make Nigerians now stand at an advantage over a foreigner that is coming. Because he is a foreigner, he is supposed to pay in foreign currency or whatever that the government of Nigeria decides. But because today the foreigner pays in foreign currency and Nigerians also pay in foreign currency, there’s no difference between you and a foreigner. You are actually being treated as a foreigner.
If government can just change this policy, it will give a lot of Nigerians opportunities. Even the foreigners will be encouraged to take advantage of this by going into a joint ventures and partnerships with Nigerians to bring those assets into the country instead of having fronts here. This will create more businesses and job opportunities with huge improvements in taxes and all other forms of revenue. I think this is one aspect government should look into.
Past governments failed to make the Cabotage work according to the Act that established it. What is the best way the present government can make it work?
There are two things involved in the cabotage.
One is the aspect of implementing the policy and the law so that it will encourage or give advantages to Nigerians in the coastal trade. The other aspect is the financing - the intervention fund which the government is setting aside.
In terms of the law of implementing the support to Nigerians in the coastal trade, I think there are lots of lapses. Some foreign companies who are not registered and who do not merit it are given waivers, thereby making it difficult for Nigerians to compete with them. However, I feel it is good to implement it. But I think also the policy implementers or government regulators should be given some awareness in the sense that the policies are actually to support Nigerians that are in the coastal trade. What we see sometimes is that the policy meant to create opportunities and support for Nigerians in this business becomes completely strangulating.
What many Nigerians are facing in cabotage policy implementation is that many Nigerians are actually placed at a disadvantage because they register their vessels to trade in this coastal or cabotage trading area. The law whose main purpose is to support, encourage and create an enabling environment for Nigerians, ends up frustrating or even killing the same Nigerians that are participating in it. The four cardinal fundamentals of cabotage are that vessels in use must be built in Nigeria, owned by Nigerians, registered in Nigeria and crewed/manned by Nigerians.
However, we have some things that are not in place: some of these ships are not built in Nigeria because we do not have the facilities. We say ‘owned by Nigerians’: we have the potentials of owning ships that are not built in Nigeria. ‘Registered in Nigeria’ - we look out for example the registration of a Nigerian flagged vessel. What we go through in terms of procedure is very cumbersome and very delaying for us. When a Nigerian shipowner puts his vessel to register in Nigeria, he undergoes a lot of bureaucracies and delays. At the end of the day, the ship stays without documents or flag registration. It’s easier for a shipowner to go and register his vessel in Liberia and Togo than for him to register in Nigeria, his own country.
What do you advise government to do in that aspect?
Government needs to look at the entire procedure of flag registration and make it independent of any factors. Presently, it is highly inefficient. I am saying this as a ship owner. If you sit down and talk to 100 shipowners, 99 will tell you exactly what I’ve said. The flag is supposed to be the one to encourage you in registering a vessel in Nigeria. You are registering and bringing it into their flag; you are paying fees and lot of charges for it. By doing that, you are creating a lot of employment in the country because on the rules of flag registration, you are supposed to employ Nigerians. If you are to employ, you are coming to employ Nigerians. But the experience instead is that you are being delayed and frustrated; you don’t even know what the rules are. It is so cumbersome.
Under the Shipowners Forum and our association, the NISA, we are going to make this presentation to the minister of transportation and the new DG of NIMASA to look at the procedure as actually it is not right presently even if it means to go and copy from other countries like Liberia which is close to us on how it is being done. I can tell you there are today Nigerian shipowners that own fleet of vessels who, because of this frustration, have decided not to even register in Nigeria. They have decided to go and register in other countries like Sierra Leone, Liberia, Togo; some have even gone to Panama to register. Why? Just because of the frustration. I am even a witness to one. When the minister had to intervene for a shipowner for him to have his certificate issued, for more than two months, the minister had to give an order before it was done. That is because the minister was involved in this case. What of others that do not have such privileges?
On the issue of a vessel being manned by Nigerians, unfortunately, this aspect is a little bit problematic. We the owner of ships believe we are lacking some capacities in certain positions that are supposed to man the ships. The reason is the institutions that are supposed to give training to Nigerians. Some are there and some have not been able to develop to the level they can train Nigerians to man those positions, especially some of the modern vessels that are here. Some shipowners or companies that are here have resorted to be the ones to finance the training of some Nigerians. An example is the Nigerian Liquefied Natural Gas company (NLNG). They take some Nigerians to some European countries and train them to be able to man their vessels. This is a Nigerian government company, a joint venture company with some oil companies. It is very rich companies that are able to do that. We have other shipowners even in the organization that are training some cadets. Starzs in Onne is an example. In my own company - Sea Transport Services Ltd too - we are also training; we have more than 100 cadets which we take and train. We train them and take them to different levels in order for them to meet those positions.
However, in the last administration, we had so many submissions in the media that they were training seafarers all over the world. In my opinion, that kind of training is not the right way. Government agencies like NIMASA should have partnered Nigerian shipowners. What is happening today is you have sent these young men to go and get trained in Asia and Europe. When they come back after the training, they have nowhere to go because ship training is not only classroom; it is 50% classroom, 50% on-board training. You can’t send somebody on training without having on-board shipping training experience. Nobody will take him. That is what is happening to the young men and women that have gone to be trained and then they come back. What we expected is the government agency to come to Starzs, Sea Transport or any other shipowner for example and say ‘look, we need this training to be done, how many can you train? This is what we can do for you.’ We are not expecting them to say ‘we’ll give money to your company’. If I train say 100 to 200 cadets, I expect some incentives.
If today NIMASA says ‘if you train say up to 50 Nigerians, all the vessels in your company fleet will enjoy 20% rebate on NIMASA fees’, it’s an incentive for me and I’m also happy I’m training my fellow brothers and sisters and I’m being recognized and given an incentive to make me do more. That means since another company will also want to enjoy the 20% rebate, we’ll take them, train them; they’re registered with NIMASA who monitors their training and check their certification. The more you train, the more you’re being encouraged. This thing should have been done in the case of the Nigerian Seafarers Development Programme (NSDP) if they had discussed with us. Somehow, nobody ever discussed with any shipowner. I don’t think any shipowner made any contribution to the seafarers training scheme that has been going on. These are parts of the things we’ll discuss with the new management of NIMASA and the minister. We intend to present this kind of things to him, so that they can see if there is a different way government will take a look at it and take decisions on things. This is policy side.
On the Cabotage Vessel Finance Fund (CVFF)?
To be honest, this is the most hidden thing in this country. Nobody knows what is happening there. As a shipowner in Nigeria, we don’t even know what the process and procedure is. Nobody makes it transparent. One year ago, we heard that some names were published; after some time, it disappeared. We didn’t hear anything. How they selected them, criteria used in selecting them, we didn’t know. Some of them are companies known, some are companies we never even see in the industry. Whether they are shipping companies or not, nobody knows. However, I feel that selection process was totally not transparent and not clear to anybody.
I feel what government did to put in place that intervention fund for the industry is very good. The industry needs that kind of intervention fund for maritime asset financing. Many are scared to go into financing maritime assets with our banks because there is actually limited knowledge of what is involved and how to secure it. Government placing intervention fund is perfectly okay but I think the procedure that is being taken to disburse it is not the right thing to do. There should be more transparency so that any Nigerian that wants to invest in maritime and thinks that he needs the intervention fund should be able to go and see the procedures to see if he can access it. The fund should not be for a selected few.
It will be good also to give approving authority to the banks than to the government agencies, because I understand banks are supposed to give 100% guarantee of the fund. I don’t think it will be bad if the banks are the ones to do the selection which will be based on merit since they are the ones to guarantee the funds to ensure they do not miss.
I have discussed within our association to see how we’ll advise government in the process, how to make proper procedure for this disbursement. Remember, the law is clear. This money is contribution of shipowners; it is not government money. Unfortunately, shipowners don’t even know the amount, what is there, what has been received, but is disbursed, nobody is accountable to it. There is so many hide- and -seek in the whole thing. We think there should be total change in the way that account is being run now. The account should not be in the sole arm of a government agency. If actually it is the contribution of the shipowners, they should be able to have like a committee that has some members of shipowners participate, so that they will know what is there, what is disbursed and what are the processes that are being followed for the disbursement for the person wishing to access it.
Rumours were rife at the twilight of the last administration that the accumulated fund had been depleted for other reasons. If the Shipowners Forum eventually discovers that there is nothing left in the coffers, what are you going to do?
The law of the federal republic of Nigeria is very clear. Cabotage fund and cabotage is an Act. It is clearly stated there that you can only disburse it to operators. So if somebody decides to take that money, the government agency saddled with the responsibility to secure that money has to be called to order; the money has to be recovered. It cannot just miss; it must be recovered like every other money that is taken illegally. I think it is the responsibility of the government to handle that.
Contrary to the popular feeling that a professional must head NIMASA, politics rather than professionalism recently took the centre stage with the appointment of Dr Dakuku Peterside. As a key industry person, what’s your view?
My own opinion is since he has taken over the helm of affairs, what we are looking for in him is to engage the stakeholders, to be able to come up with a good management team that will give him good support to guide him through some of these policies on how to develop the maritime sector. We all have to agree today that NIMASA is one of the most important government agencies or regulator of this shipping industry.
It has failed for some period over the years to make any positive impact in the industry in terms of stimulating growth. We have not seen NIMASA stimulating any growth in the industry. Some of the policies that are being executed are policies that are supposed to give supportive backing to Nigerian shipowners in order to grow the industry. But we are not seeing them.
We know that the new DG is a politician. We know that he contributed immensely in the House of Representatives where he served as the chairman of the downstream. We believe he will come with the mind to develop this industry, bring the stakeholders together, and bring about a very robust management team which will support and guide him in decision- making and look out for those areas that will stimulate maritime growth. Some of us have knowledge that can change a lot of things in this industry that will create jobs and that is what we actually need. NIMASA should be supportive to the shipowners. We don’t want a NIMASA that is isolated, that doesn’t even know who the shipowners in Nigeria are today. This I think is one of the fundamental issues that can bring failure. If you take some of the past DGs of NIMASA and ask them if they can at least list four to five names of shipowners, they cannot, because they never in any way discuss with anybody.
Now, the DG we know is a very good gentleman, some of the shipowners that have the privilege of knowing him in person say he’s a very intelligent, highly educated gentleman who is willing to communicate and engage with everybody. We pray that he engages the Nigerian shipowners and give us listening ears. We are never against NIMASA. What we need is for NIMASA to give us the support and execute supportive polices to create this awareness among his management and staff.
The recent merger of Nigerian Shipowners Association (NISA) and the Shipowners Association of Nigeria (SOAN) to form the Shipowners’ Forum is being applauded nationwide. How will this be of benefit to members’ individual businesses and the national economy?
As you know what happened one year ago, there was a bit of division in NISA and SOAN was formed. Now we have looked at it and all decided that it is not in the interest of anybody. In the interest of the industry, it is not right for us to be having all these divisions even though the laws of Nigeria allows you to form associations as you wish.
With the President of SOAN, Engr Greg Ogbeifun, we have looked at it in ways we gain by this division. Together with some very important shipowners who were not even part of either SOAN or NISA, we all came together and decided that we have a common platform. Yes, you are a member of NISA, you can still maintain your membership of NISA; you are a member of SOAN, and you can also still maintain your membership. You are a shipowner who decided not to be any member of the two, you can still be your independent person, but let us have shipowners forum which is for shipowners, so that we can discuss all the issues that affect us together under one umbrella to have one front to present to government agencies for them to see what is really happening. And through these our meetings and discussions, so many things have come up. Today, if you take the assets of Nigerians in the maritime sector where we have invested, we have the largest fleet in Africa. But because we never come together, nobody knows that there is even a shipowner in Nigeria. Nobody knows that there are Nigerians flying Nigerian flag. Our combined fleet is maybe the combined fleet of Africa totally. There are so many Nigerians who have invested hugely in this maritime asset in the oil and gas sector (upstream) or in the dry cargo sector, but nobody knows them. But this shipowners forum is a platform that we all come together and speak with one voice and we have agreed that the chairman of the shipowners forum will be Barr (Mrs) Margaret Orakwusi who has been in the industry for a very long time. She has participated in so many fora with industry merchants all over the world. She is the leader of the Shipowners Forum. Engr Greg Ogbeifun and I are the ones with her. Three of us are taking this platform.
We want to engage the government agencies, to show them what the country is losing, because of things that they don’t know. We believe that if we come together, we’ll be able to show them some of these things like how to generate employment, foreign exchange, etc. In the oil and gas sector, crude oil loading for example, there is a minimum of 70 to 76 crude oil tankers that load in Nigeria every month. This crude tankers freight is a minimum of maybe $2m to $4million per voyage. If you multiply 70 by $4million, how much do you get per month? Multiply it per annum and see. This is freight that we in Nigeria are losing. It does not even come through our bank; we do not get anything, they (foreigners) do not even pay tax, nobody is employed for that. It is money made in Nigeria that goes out. This is the money that even if 20% of it comes into Nigeria, that will make a huge difference in our forex demand in this country. This is what we are telling our agencies to support Nigerians so that these things will come into our country, into our banks so that this people will employ Nigerians. This is just one side I’ve talked about, there are so many.
When government talks about leakages, these are part of the leakages. These are not illegal leakages but legal leakages in the sense that opportunities that we could have used to develop the country are being denied us. If these monies come here, there would be taxes which will go into government coffers. These are part of the reasons we want to engage government, discuss with them and show them some of these things, so that slowly these things would be developed and money would start coming in and that is how the country will start to develop.
Do you support the view that by insisting on the merger, the Transportation Minister overstepped his bounds?
Actually I don’t agree that the minister has overstepped his boundaries. What the minister has done is great. He showed us that he is a father and that he cares for us. It is an important thing for shipowners in Nigeria to know that the minister actually cares, by him telling us to come together. One of the things that people will like about our minister is that he is very blunt and open. It is very encouraging for us, because we have so many agencies that don’t even care whether we exist or not. This is a morale booster for us and we really thank him for that.
Alhaji Aminu Umar
Who is Alhaji Aminu Umar and what has encouraged you to come this far?
It is about interest. I actually enjoy the maritime business. It has been a challenging industry but it’s an industry you learn every day, meet different people from different cultures. I was lucky that I had a background in shipping agency at an early age. From there, I went into ship brokerage for commercial management of ships and was able to develop a company to a certain level and set up Sea Transport Ltd. It has been encouraging because I have good management staff, good technical advisers. We discuss at par and I learn everyday from them. Thanks be to God, we are among the companies with the largest fleet in the country. In the tanker business, we have what is called Oil Major Approval for our vessels – MT AMIF and MT KINGIS. We are the only Nigerian flag vessel to ever get that kind of approval. It is a remarkable achievement because it has never happened before.
I believe we are Nigerians and we will achieve whatever anybody achieves because we have the same education and foundation like any other person. There is no limit to what we can achieve.