INVESTMENT OPPORTUNITIES IN THE NIGERIAN MARITIME SECTOR A PAPER PRESENTATION BY

Transcription

1 INVESTMENT OPPORTUNITIES IN THE NIGERIAN MARITIME SECTOR A PAPER PRESENTATION BY 1 MR. HASSAN BELLO EXECUTIVE SECRETARY/CEO NIGERIAN SHIPPERS COUNCIL CHAIRMAN NIGERIAN FLEET IMPLEMENTATION COMMITTEE AT THE NIGERIAN MARITIME SUMMIT AT MARLBOROUGH HOUSE, LONDON ON WEDNESDAY 28 TH SEPTEMBER, 2016

2 OUTLINE OF THE PRESENTATION 2 General Overview of the Nigerian s Maritime Sector Nigeria as an Import and Export Economy The establishment and demise of Nigerian National Shipping Line Present Government Initiative in Establishing National Carrier in Nigeria Available Investment Opportunities in the Nigerian Maritime Sector Conclusion

3 INTRODUCTION It is a privilege and my pleasure to be in your midst to make this presentation on the investment opportunities in the Nigerian Maritime Sector. 3 The Maritime Environment will continue to be a veritable medium of transportation, global commerce resource exploitation and recreation. It would continue to remain relevant for the economic prosperity and development of most nations because of its huge marine ecosystem and abundant mineral resources.

4 GENERAL OVERVIEW OF THE NIGERIAN MARITIME SECTOR Nigeria covers a total of 923,768 square kilometres with a land area of 910 square kilometre and a coastline of 853 kilometres and inland waterways totalling 8,575 kilometres. 4

5 GENERAL OVERVIEW CONTINUE 5 This therefore implies that Nigeria s maritime environment will remain attractive due to the potential of her maritime sector for socio-economic development. Nigeria is a leading Maritime nation with enormous natural maritime resources and a major hub for local and international trade in Africa, contributing significantly to Gross domestic product (GDP) with annual contribution to GDP of about 15 Billion USD as reported in 2013 which is second to oil and gas sector.

6 GENERAL OVERVIEW CONTINUE In recent years the sector has been witnessing a lot of reforms to position it in order to achieve efficiency, growth and overall developmental objective of government in the sector and the economy? 6 The following are the major players in the Nigerian Maritime Sector 1. Ship owners 2. Port/Terminal Operators 3. Shipping Services Providers 4. Freight Forwarders/handlers 5. Regulatory Agencies e.g. Nigerian Shippers Council (NSC) Nigerian Ports Authority (NPA) Nigerian Maritime Administration and Safety Agency (NIMASA)

7 GENERAL OVERVIEW CONTINUE Nigeria Custom Service (NSC) National Agency for Food and Drug Administration and Control (NAFDAC) Standards Organisation of Nigeria (SON) 6. Service; Federal Ministry of Transportation and Federal Ministry of Finance 7. Financial Institutions e.g. Banks and Insurance companies It is pertinent to note that Nigeria s desire to have a large, strong, sustainable and competitive economy will depend largely on its ability to harness the potentials of its maritime sector for sustainable economic development. 7

8 The Establishment And Demise of Nigerian National Shipping Line (NNSL) 8 The Nigerian National Shipping Line (NNSL) was established by the Nigerian government in 1957 at first 33% of the capital was from Elder Dempster line and 16% by palm line, both British companies while Nigerian government held 51%. In 1961, the Nigerian government acquired all the shares. The NNSL started operations in 1959 with 3 vessels. Nigerian seamen Who were employed by British Shipping Companies in the colonial era Moved to work for the NNSL and by 1964 had grown to 16 vessels. In 1977 the Nigerian government ordered the construction of 19 new vessels and by 1979 NNSL had 24 oceangoing ships. It became an important source of training for seamen of the Nigerian Merchant Navy.

9 NNSL CONTINUE 9 In 1988 the 24 ships of Nigerian National Carriers including the NNSL took only 11% of the cargoes at Nigerian Ports. The NNSL due to a combination of financial and administrative issues could no longer attract cargo for her vessels. In the 1990s several of the company s vessels were seized in different port of the world for alleged breach of contract and unpaid bills.

10 NNSL CONTINUE 10 The NNSL was subsequently liquidated in September its assets were assumed by the newly formed National Unity Line (NUL). The NUL began commercial operations in July 1996 as Nigeria s National flag Carrier. In August 2005 the government put the NUL up for sale. Since then, Nigeria has no National Carrier despite her huge maritime activities.

11 NIGERIA AS AN IMPORT AND EXPORT ECONOMY 11 Prior to oil production, which surged after the 1970s, Agricultural production was the largest export sector for Nigeria. Later the country became largely oil-intensive economy, Agricultural sector took a back seat. Oil and natural gas are the most important export products for Nigerian trade. The country exports approximately million barrels per day according to 2015 OPEC figures, and in terms of total oil exports, Nigerian ranks 6 th in the world with a value of USD 38 Billion. Imports reached over US Dollar 42.1 billion this comprised mainly of machinery, heavy equipments, consumer goods and food products. A large portion of the imports are from the EU, particularly the Netherlands, the UK, France and Germany, China, the US and South Korea are also major import trade Partners with Nigeria.

12 PRESENT GOVERNMENT INITIATIVE IN ESTABLISHING NATIONAL CARRIER IN NIGERIA The present government has identified the need for development of Nigerian Fleet for active participation in international maritime trades mainly due to the following benefits: Massively support Nigeria s economic diversification drives Ensure the provision of employment to Nigerian seafarers Enhance Nigeria status in comity of maritime Nationals including membership of International Maritime Organization (IMO) Provide requisite training for Nigerian Seafarers The new initiative by the federal government is to establish a private sector driven National Carrier this will consist of international trading ships involved in dry/bulk cargo import/export and crude, Container and refined product affreightment 12

13 GOVERNMENT INITIATIVES CONTINUE The National Carrier will be a Joint Venture between Nigerian investors and foreign partners. 13 The federal government will provide support and enabling environment for the National Carrier in the following areas. 1. Enforce section 37 of Nigerian Maritime and Safety and Administration (NIMASA) Act which guarantees carriage of all government cargoes by the National Carrier. 2. Tax relief to the Joint Venture for a reasonable period between (5 to 10 years) 3. Exemption from import tax for vessels imported into Nigeria, registered in the Nigerian ship registry including vessel spare parts and equipment.

14 GOVERNMENT INITIATIVES CONTINUE Reduction of port dues for Nigerian flagged vessels. 3. Reduce delays in the process of obtaining regulatory approvals 4. Exemption from the payment of Sea Protection Levy for Nigerian flagged ships. 5. Government will encourage importers and exporters to patronise Nigerian registered vessels. 6. Government will carry out legislative reforms that will further support the sustainability of the National Carrier e.g. Attractive fiscal policies.

15 INVESTMENT OPPORTUNITIES IN THE NIGERIAN MARITIME SECTOR The robust activities in the sector and continuous growth premised on the above developments presents enormous opportunities for investors. For instance, the deregulation and liberalization of the Port Sector has given additional impetus for private initiatives in terminal operations. There is currently investment opportunity in the establishment of a National Carrier through Joint Venture with Nigerian Private Investors in wet and dry Cargo operation. Apart from terminal operations and shipping line another area of investment is in fleet acquisition. Vessels represent major segment of assets in the sector where tanker and cargo vessels are very popular. Due to the huge capital outlay involved in purchase of new vessels, some Nigeria investors buy used vessels and some new vessels will be needed for take off of the Nigerian Fleet. 15

16 INVESTMENT CONTINUE Investments There are also areas of investment in ancillary services such as Ship/Vessel Support Services which include: - coastal water transportation service - servicing oil platforms and driller of gas and oil. - supply of boats e.g. tug boats - ship building and repairs - medium and small fishing vessels - ship chandling - operating cable and pipeline laying vessels - shipping company agency. 16

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19 CONCLUSION 19 Commonwealth nations trading with Nigeria should be invited to PATRONISE the emerging Nigerian Shipping Fleet in the afreightment of cargo between our two countries.

20 20 Thank you for your attention