Poor fiscal policies threaten maritime sector growth
For Nigeria to revive the maritime industry and attract Foreign Direct Investment (FDI), there is urgent need for the Federal Government to review the fiscal policies in the sector.
President, Shipowners Association of Nigeria (SOAN), Greg Ogbeifun, in a chat with The Guardian ahead of the 2017 yearly general meeting of the association, in Lagos, said the poor fiscal policies of the Federal Government have put Nigeria and Nigerian operators at a disadvantaged position in the global shipping market.
He said the Federal Government’s plan to float national fleet with private investors (Pacific International Lines of Singapore) collapsed because of the obsolete laws that the foreign partners felt would make it impossible to recoup their investment.
However, the Ogbeifun lamented that Nigeria cannot boast of a single crude oil tanker at the moment, due to paucity of funds and overbearing fiscal policies. He faulted the Nigerian Maritime Safety and Administration Agency (NIMASA) for its failure to disburse the Cabotage fund over the years.
The SOAN chief said: “I was part of the delegation that went with the Minister of Transportation to Singapore in 2016 during the signing of the MoU. Along the line, after we had signed the MoU in Singapore with PIL, the company came up with issues as regards our local tax laws.
“Firstly, PIL made reference to our local laws that will not make the agreement viable. And they put it in black and white that unless some of these laws are reviewed, it will be hard for them to fly the Nigerian flag. That was the biggest setback for that MoU.
“This is also affecting our crude oil tanker quest. We have to decide if we want these things to happen in Nigeria. Let’s review our laws, just like what Malta did. Malta turned around its maritime administration by reviewing its tax laws. Malta made its tax laws attractive for international participation, and today that country is the envy among maritime nations.”
He added: “What are we talking about? If you are an American, or a Briton or a Greek, and you decide to buy a crude oil tanker that will fly your country’s flag, the government has a law that allows you to bring in your tanker into your country on zero duty payment.
“In Nigeria, if you are bringing in a canoe, a tugboat, speedboat or a tanker, the sum total of the importation cost that you will pay is about 14 per cent. So if you buy a crude oil tanker for $100m dollars, if you take it to America, you will pay zero duty as long as it is carrying an American flag, same in the United Kingdom and Greece. But if you bring it to Nigeria, you will pay N14million even when it is flying Nigerian flag.
“Again, you have to remember that Nigerian flagged tankers will be competing with foreign flagged tankers in the same market, so automatically, the Nigerian flagged tanker is already disadvantaged.”
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