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How government policies crippled local ship chandling business

how government policies crippled local ship chandling business
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By Steve Agbota, [email protected].com 

Despite Nigeria’s lo-cal con-tent pol-icy to protect indigenous operators, 95 per cent of indigenous ship chandlers are out of business due to lack of support from the government.

In the 70s, Nigerians were in the forefront of ship chandling business operating between 2010 and 2021 as a third party, even as over 600 chandlers are being replaced in the industry by foreigners with financial muscles to operate easily. 

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Ship chandling is an international dollar-denominated business around the world which used to be a subsector of the maritime sector generating foreign exchange to the nation’s coffers.

Today, the business, described as a foreign exchnage spinner and lucrative sector in the the maritime sector, hardly contribute one per cent today of foreign exchange to the economy as it is now being dominated by foreigners.

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Today, hardly do peopletalk about local chandlers even as their association is no longer effective while some of those who are still in the business are operating under the license of their foreign counterparts. 

Ship chandling,  a business which was established in Nigeria through an Act in 1958, is made up of retail dealers who specialise in the supply of equipment and goods for ships, known as ship stores. 

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By law, ship chandling business is meant for local operators who are made up of retail dealers who specialise in the supply of equipment and goods for ships, known as ships stores.

However, the law guiding ship chandling has not been effective and remains stagnant for years, even as Section 24 of the Customs and Excise Management Act (CEMA), which regulates the business, has not been reviewed since 1968 to reflect new trends.

The local chandlers supply items such as ship hardware items, chemicals, galley equipment and supplies, charts and binoculars, paint and varnish, chipping hammers and scrapers, lubricants, foods and beverages, spare parts, water and other allied services to make the next trip smooth for the ship’s master and its crews. These services are handled by indigenes of the port where such vessels berth.

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For instance,  a ship of 5,000 Gross Registered Tonnage (GRT), would require about $50,000 monthly to take foods, pharmaceuticals, oil, lubricants and other stuffs to go to sea and return to the port.

Ironically, there are more than 10,000 ships, oil platforms, rigs and barges operating in the oil gas and port sectors every year that need essential provisions and services to maintain their crew on board the ships.

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Unfortunately, these items and services needed during a trip have been hijacked by foreigners in Nigeria today.

With the dominance of foreigners, Nigeria has lost over $70 billion in the last 16 years, an equivalent of $4.375 billion annual loss. The money, which ought to be ploughed back into the nation’s economy, is now being repatriated by foreigners, a loss to Nigeria over over the past 16 years and fueling capital flight in the country. 

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However, over 5000 direct employment and 20,000 indirect employment to the dominance of chandling business by foreigners due to the inability of Nigeria to design policy favourable to local operators.

Daily Sun learnt that less than one per cent of Nigerian chandlers are engaged by multinationals in the nation’s petroleum upstream sector to provide supplies for more than 2500 vessels and other oil facilities, that operate in the sector as against the 95 per cent allocated to Nigerians by the Nigerian Local Content Policy.

Speaking with Daily Sun, a former ship chandlers who left the business three years ago, Felix Anaye-Benson, said that 95 per cent of chandlers are no longer in the business due to financial burdens and lack of government support to compete with foreigners. 

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He said most chandlers chased out of the industry by their foreign counterparts are now into clearing and forwarding, farming and other businesses to survive. 

“In previous years, ship chandling was one of the wings in the maritime sector that generated foreign exchange into the government’s coffers because everything we do has to revolve around dollars. Today, the dollars are being taking back to foreign countries.

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“The foreign counterparts have more financial muscles to send us out of business because they are being supported by their government. And shipping companies chose foreigners above us even though the local content law gives us upper hand. But the law is being shelved aside by these shipping companies and engage the services of the foreigners,” he lamented. 

Meanwhile, the National President, National Council of Managing Director of Licensed Customs Agents (NCMDLCA), Lucky Amiwero, said presently, ship chandling is facing a lot of challenges like low capital base and a lot of ship chandlers are left the business and the industry is just there. 

“In the 60s, 70s and 80s, ship chandling business thrived within the port environment. But for now, it is not as booming as it used to be for the local chandlers. So there is need for government to intervene and see how they can have supporting role because it is an area where alot of foreign exchange can be repartriated back into the country,” he said.

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According to him, ship chandling businesses are supposed to be handled by Nigerians because they actually obtained their licences from the Nigeria Customs Service (NCS). 

“Ship chandlers provide those things that ships need, which will make the ship last for time being. They have ship stores and all the rest, which include food and other things.

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“The issue of foreign dominant is not only synonymous to ship chandling. If you go to Customs agents, you have the same problem and the rest. 

The ship chandling business is a supplying things and needed a kind of government participation to assist the ship Chandlers to be able to have more capital base to be able to do this job,” he added.

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For his part, Advisory Head/CEO, Kamany Marine Services Limited, Charles Okorefe, said  the question that should be asked is who lincences the foreign ship chandlers? 

He said, “If they are operating within the port environment and that is a critical question to be asked. 

“It is the same Customs that licenced Customs brokers or what you called clearing agents, it is the same Customs that licences ship chandlers. So if the Customs dedicate their responsibility and feels foreigners deserve more to do, then Nigerians who are supposed to handling the job, it is their responsibility to cry out because we have chandlers association but I’m not sure if they are still exist. 

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“So when they must  is a vacuum, there must always be occupied. I know there is used to be chandlers association, I know if it was still there, they will not allow such anormalies to happen. But if it is no longer there and a vacuum is created, it must be filled. 

“So the issue with indegenous chandlers, it is there territory and it is there right to protect it because Nigeria cannot go to London or Italy for instance, and be licenced as ship chandlers.

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So the ball is in the court of Nigerian licenced chandlers, they have form theirselves together again if the association has broken up because it is their right and their food they are taking out of their mouths,” he said.

He said the Customs has to determine the criteria for licencing ship chandlers because it is an indegenous thing that goes a line with the cabotage act. 

He added that ship chandlers business has to be localised for indigenous people, adding that there is nothing foreingers are doing that indegenous people cannot do in terms of chandling.

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“Chandling is simply replenishment of food stuffs and spare parts for vessels, supply of fresh waters and possibly fuel to the vessels. Those are the basic responsibilities of chandlers and the shipping companies also that give their jobs to foreigners, is it that they create department of chandling in their offices? That is another issue that may need to look into because usually it is the shipping companies that allocate chandling jobs to chandlers. 

“So if they decided to create their own inhouse chandling department that is another issue that needs to be investigated. These are the issues you need to look into otherwise, chandling is supposed to be localised basically for Nigerians because it is our maritime net and it is our duty to handle jobs,” he said.

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