The Director General, Nigerian Maritime Administration and Safety Agency Dr. Dakuku Peterside, said that due to prohibitive Customs duties in Nigeria was one of the factors that led to the collapse of the local shipping industry.
Peterside who was represented by the Executive Director, Operations, NIMASA, Rotimi Fashaki, stated this at the 6th Annual Conference of the Nigerian Society of Engineers, Marine and Naval Architecture division on Tuesday in Lagos.
According to him, high Customs duties imposed on vessels made imported alternatives cheaper.
He said, “Last year, we went to Onne, West Atlantic Shipyard. I was horrified by the enormity of decay that had taken place there.
“That shipyard had churned out over 500 metric tonne-size vessels before then but owing to some adverse economic downturns and the parlous state of the economy and the industry, that shipyard has now become a shadow of itself.
“One of the things they talked about was the prohibitive customs duty that makes it cheaper to bring in vessels from China and Korea than actually building vessels here. This is because the moment you build your vessel, yes the place is a free trade zone, and it lands onshore, it attracts huge prohibitive import duties, which wipe off whatever gains you may want to make on that vessel.”
Peterside added that the agency had planned to hold talks with the Comptroller General of Customs, Col. Hameed Ali(retd.), on the need to reduce duties on vessels built in the country as part of efforts to encourage investment in the ship building industry in Nigeria.
He said NIMASA was also partnering industry professionals towards growing indigenous capacity in shipping development in Nigeria.
“One of the things that we are doing as an agency is trying to make the right representation in government. We have had a kind of interaction with the NCS before now and we are still going to continue the interaction in order to build the right indigenous capacity that will attract less import duties in Nigeria so that Nigerian shipyards can hope to thrive. That is the only way you can encourage and bring the right investment in that area,” he said.
Speaking on the theme of the event, ‘The Role of Marine and Infrastructure in Sustainable Economic Development: Nigeria in Focus’, the Chairman of Starz Investment Company, Greg Ogbeifun, noted that with the exception of West Atlantic Shipyard, ship building in Nigeria was relatively non-existent due to lack of infrastructure such as power and a viable steel production industry.
He said to ensure that the sector achieved its full potential, focus needed to be placed on resuscitating the moribund steel industry and improving electricity generation.
He said, “Our steel industry is key to the growth of ship building and ship repairs in the country. The power industry is vital as well; so, government needs to take a holistic look at this but more importantly, even countries that have come to Nigeria to try and develop this sector have struggled because of the fiscal policies of the government. The tax regime here makes it very unfavourable for the industry to strive.”