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Ogbeifun gives insights how FG can create enabling environment to support indigenous participation in shipping trade

Chairman/CEO Starzs Group, Engr. Greg Ogbeifun
Although Nigeria has been exporting crude oil in the
last 50 years and presently marking export of about two million barrels of
crude daily, no Nigerian shipowner has ever been involved in the lifting of the
product, a venture that would have otherwise earned the nation huge revenue in
foreign exchange.

Concerned about the situation, Nigerian Shipowner and Chairman/Chief Executive of Starzs Group, Engr. Greg Ogbeifun, believes that immediate
action to address the problem should be the concern of the Federal Government
much as it is a problem to private business owners in the maritime sub-sector.

Ogbeifun was giving insights to the issue raised on
Tuesday at the fourth Lagos International Shipping Week.
He said: “Nigeria has been exporting crude oil in over
50 years. Today we are exporting about 2 million barrels of crude daily. So, if
you imagine the number of ships coming into our waters daily to take out the
product for export. In over these 50 years, not one barrel of the crude oil has
been carried by a Nigerian shipowner.
“That calls for urgent action by both government and
the private sector, because the benefits we are losing by not getting involved
in our crude oil shipping and the amount of freight charges running into
billions of dollars that this country is losing, we need to begin to wonder
what we should do about it.”
Ogbeifun told the gathering that as a member of a
ministerial committee tasked to work out how Nigeria could develop a national
fleet, the committee found out, from its survey, that countries floated global
trading ships by first creating an environment that supported the plan.
“Countries that were able to float global trading ships
started by creating an enabling environment for their nationals; public or
private or public private partnerships to be able to establish global fleets.
One of the incentives for example is on the issue of their tax laws. If you are
Greek, America or A British and you buy a ship to trade globally and you want
to flag or register that ship in their flag, the importation for that ship is
zero-duty. That is fundamental.
“Because shipping is capital intensive business, you
need a long amortisation period to be able to pay back whatever financing you
are getting. So, some of these countries even go further to introduce tax
holidays. Maybe for the first five years of your operation you are not required
to pay any of those things that put pressure on your cash flow. So, it becomes
easy for you to be able to trade, pay your debt and operate your fleet. But
what do we have here?”
Sharing a personal experience, the shipowner said he
had to pay 14 per cent of the cost of his ship as import duty, bringing the
ship from China where it was built, to Nigeria.
That import duty paid was because the ship was flagged
Nigerian, whereas, foreigners brought in same category of ship for the purpose
of bidding for same job, but required to only post a one per cent Customs Bond.
Of course, the foreign shipowner would have a cost
advantage, bearing in mind also that he would have accessed financing at
single-digit rate when a Nigerian would get such financing for building ships
at double-digit rate.
Ogbeifun, therefore, called on the government to urgently
address the problems as it has the powers to do so, in order to encourage
indigenous shipowners, and in turn increase revenue from such operators.   

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