Cabotage Could Fail if…Galtima Liman

Alhaji Galtima Liman is a former Presidential Aspirant. He contested the presidency in 2003 alongside Obasanjo and others. A social commentator and analyst, Galtima is known for his openness and in-depth understanding of transport, economic and political issues. In this chat with Kelvin Kagbare, Galtima bares his mind on issues affecting shipping development in Nigeria…

NIMASA is on the verge of disbursing from the CVFF. What is your advice to NIMASA and would be beneficiaries?

The whole idea of a discounted interest loan should be to expand fleet. If companies have been short listed by NIMASA to benefit from the CVFF Fund, the critical question that would beg for answer is: Do we have a programme for Cabotage fleet expansion that this fund would go into? If we don’t have, it invariably means the experience of the SASBF fund is about to be repeated. Because beneficiaries would get this fund at single digit interest rate and go place it at double digit interest rates in commercial banks, use the proceeds to repay NIMASA, if at all with excuses here and there. At the end of the day, money made would be converted to conspicuous consumption without it going to fleet expansion.

Normally in shipping, you need to have guaranteed long term contracts, because most of these projects, I am aware, are offshore logistics projects-equipment supply, movement of products or personnel and other Cabotage services. If you want to do this with some expected returns in mind, NIMASA, as custodian of tax payers money must first of all find out whether you have an existing contract or a building plan for existing vessels that will ensure that fund received  under CVFF will go into fleet expansion or increase of tonnage. From statements made by NIMASA, it seems some of the CVFF funds will go into repair of some ISAN idle ships. After the repairs the ships will still sit fallow without contracts, where is the benefit to the country from such an arrangement? The whole history of Cabotage so far is hinged on waivers. So if solid contracts for affreightment is not in place before disbursing CVFF it would amount to throwing good money at bad projects.

What should be the primary objective of NIMASA, pay back of money received or empowerment of indigenous ship owners?

The whole idea is that of fleet expansion, increase of tonnage-lack of which has affected development of seafarers, employment generation, foreign exchange repatriation and so many other issues that has made us a blind nation. The whole idea of Cabotage is to develop your local capacity, so that from your domain you can advance into global shipping in which Nigeria traditionally had a glorious history even during the NNSL era before the Port State control detention was used by European countries to sabotage NNSL vessels. So NIMASA needs to sit down and look at the issues closely at how to integrate local content before disbursing the CVFF funds. As we speak, 99.9% of oil trade is controlled by the major oil companies and their subsidiaries so unless a deliberate effort is made to break in, some people will get the money, they wont get the jobs and at the end of the day you have rich people with lots of money who will only used such money for conspicuous consumption

Do you think CVVF could address the issue of crude lifting by Nigerians?

When the president signed some $30b to $40b crude contract recently, I expected  the Director General of NIMASA and other shipping managers at NIMASA and other shipping technocrats would be there to guide the president  on the need to sign such a  huge contract on Cost Insurance and Freight instead of the FOB term on which  the contract was signed.  CIF would have domiciled about $10b in this country which could have  had a positive  effect on shipping in particular and the economy in general. But unfortunately we have again sold our crude on FOB basis and you talk about Nigerians lifting crude? Under the present circumstances it is impossible.

Galtima Liman

You see we always like putting the cart before the horse. We are a blind nation in terms of shipping. So long as a nation does not have an export oriented economy that nation is a blind nation and this has affected our international trade. Right now we are importing kerosene, jet fuel and all other by products of crude oil which we have been exporting for over fifty years. We have refineries that we have spent more money maintaining instead of building new ones. Passengers get to our airports but cannot travel because there is no jet fuel, Nigerians spend their productive time searching for kerosene, how can this nation develop?

Talking of NSDP, you can have all  the boys in Oron going for training but at the end of the day they cannot be taken on board any of the foreign vessels because they lack sea experience.  NIMASA management is there collecting fat allowances, incurring high expenditure and  creating fat cats when they should be working on fleet expansion and increase tonnage.  Manning crude carriers is not rocket science, but most of the accident are caused by human error, human errors because you have not trained them and you cannot train them because you do not have the vessels and what are we doing about it? Is CVFF the answer? It is the same dance that we have been dancing in the last thirty years that we are still dancing when the music in shipping, in technology, economic management has changed globally.

When His Excellency President Goodluck Jonathan was signing a $35b contract for crude forward contract his adviser on maritime should have told him that there is a freight implication and the freight implication will translate to foreign exchange which he needs for his power sector reforms and address the needs of Nigerians, so wherever there is a foreign exchange leakage, he must, as custodian of the wealth of the people, see that such funds are attracted back to the country for the greater good. So the maritime sector, banking, manufacturing, insurance are critical sectors. Countries like India, Britain and others are making huge sums from their service sectors. So if leakages are checked needed revenue can be generated for this country therefrom.

Let us look at the issue of corruption at the National Assembly. What is your view?

I don’t want to be carried away by the issue of corruption in the National Assembly; there is corruption to at the Executive. The National Assembly is supposed to be the watch dog with their over sight functions. I am afraid that if  we bug the senators down with issues of corruption we may not go any where in terms of development.

Corruption in Nigeria is a system thing. It is not that people want to be corrupt but because the system is so lax people take advantage. Take the case of Bode George, after building a great carrier like that nobody would want to destroy it but it is the system that lures people into corrupt practices. The thing to do is to stop corruption from taking place because studies have shown that 90% of the proceeds of corruption are never found because they have been converted to hotel bills, casinos and useless consumptions that leave no trace. It sad because funds that should go into development are been siphoned outside. Our institutions need to be strengthened. The electoral processes must be such that brings out the best amongst us otherwise we just keep running from pillar to post, motion without movement with nothing to show. In all this, there are a few persons who are taking advantage of the lapses in the system to enrich themselves, by so doing they create unemployment and insecurity. So corruption is about the system and not the individuals.