An X-ray of Nigeria’s Marine and Blue Economy: Potentials still untapped, innovation needed to drive growth in 2024
The Nigerian Marine and Blue Economy sector witnessed some developmental strides in 2023, with innovations that improve the workability raising optimism of a better future, despite strides some potentials are still yet untapped, writes SEUN IBIYEMI. Excerpts:
Security Improvement
Over the years, the spate of piracy attacks in Nigerian waters has been on the decline following efforts by the Nigerian Maritime Administration and Safety Agency (NIMASA) in collaboration with the Nigerian Navy to ensure adequate policing of the nation’s maritime domain.
Speaking in April 2023 when he received the Norwegian Minister of Foreign Affairs, Ms Huitfeldt Anniken in his office in Lagos, NIMASA DG, Dr. Bashir Jamoh revealed that, “Nigeria recorded 82 cases of sea piracy in its waters in 2018, but that dropped to 61 in 2019 and down to 34 cases in 2021.
“By 2022, we recorded zero piracy attacks and maintained that record up till the first quarter of 2023.”
With the zero-record feat which started in 2022, the International Bargaining Forum (IBF) in February 2023 removed Nigeria from the list of countries designated as risk maritime nations.
Even though the International Maritime Bureau (IMB) has raised the alarm over the likely resurgence of piracy in the Gulf of Guinea waters, NIMASA in collaboration with the Nigerian Navy has been able to keep the threat level within check all through 2023, leading to further calls for the removal of War Risk surcharges on Nigerian bound cargoes.
Ports
The $1.5 billion Lekki Deep seaport was commissioned by former President Muhammadu Buhari in January 2023. The new port, Nigeria’s first automated port, was expected to wrest lost cargoes from rival neighboring ports of Accra, Lome and Abidjan.
The new port, which can handle very large vessels, commenced commercial operations by the beginning of the second quarter of 2023, and sent shockwaves through the nation’s maritime space, forcing operators of river ports like Apapa and Tin-Can to also announce arrival of very large vessels in their port terminals.
The entrant of Lekki Port into Nigeria’s maritime space has had positive impact on the nations port operations because very large vessels that previously wouldn’t want to come to Apapa and Tin-Can Ports, now come to these ports following improvement in vessel handling capacities by the various port operators of these river ports due to the competition posed by the presence of Lekki Port.
This river ports had to up their game not to get frozen out of business by Lekki Port which could handle very large vessels. Thus, it became a tradition to see Apapa and Tin-Can port operators celebrating the arrival of very large vessels in their port terminals. This wasn’t the situation before the emergence of Lekki Port.
All through 2023, the issue of collapsing quays and berths at many Nigerian ports made the headlines as the Managing Director of the Nigerian Ports Authority (NPA), Mr. Mohammed Bello Koko said that the rehabilitation of Apapa and Tin-Can Island Ports in Lagos, including Onne port in Rivers State and Calabar port in Cross River State will gulp $800 million.
“Palliative and remedial works are no more effective. These ports need total rehabilitation. The rehabilitation would help in achieving the digitalisation of all the four ports in Nigeria.
“The rehabilitation of Apapa, Tin Can Island Port in Lagos, Onne and Calabar ports in the Eastern port will cost $800million. The $800million will either come in as a loan or NPA will fund the rehabilitation, which will reduce its contribution to the CRF,” the NPA MD had told newsmen in February 2023.
With the creation of a Ministry of Marine & Blue Economy by President Bola Tinubu, expectations are high that the approval for the rehabilitation of Nigeria’s major ports will soon commence in the new year.
Failed CVFF Disbursement
The year also began on a high for indigenous ship owners seeking the disbursement of the over $700m Cabotage Vessel Financing Fund (CVFF).
Recall that the CVFF was established alongside the Nigerian Coastal and Inland Shipping (Cabotage) Act of 2003, to empower indigenous ship-owners to take control of the nation’s coastal and inland shipping business, otherwise known as the Cabotage trade.
Towards the tail end of the administration of Muhamadu Buhari presidency, five Primary Lending Institutions (PLI’s), Zenith, Polaris, United Bank of Africa (UBA) Jaiz and Union Bank were all appointed to handle modalities for the disbursement of the CVFF to indigenous shipowners.
Briefing journalists after a meeting at NIMASA headquarters in January, the Director General of NIMASA, Dr Bashir Jamoh stated that the modalities to be released by the five banks include the interest rate, tenure, collateral and requirements needed to access the fund.
However, the end of President Buhari’s tenure as Commander-In-Chief mid-2023 and the emergence of President Bola Ahmed Tinubu’s era seems to have slowed down the disbursement of the CVFF, as the fund has remained undisbursed all through 2023 and the country has continued to incur losses due to a lack of capacity on the part of the indigenous ship-owners.
Untapped Blue Economy potential holds key to growth
Over the past 10 years, the phrase ‘blue economy’ has gained popularity as more people, governments and economists have come to understand the enormous possibilities that the ocean and its resources present. The concept, blue economy, can be traced to Gunter Pauli’s 2010 publication and its currency gaining status at the 2012 United Nations Conference on Sustainable Development in Rio de Janeiro, Brazil.
The blue economy concept aims to market economic processes and social inclusion, hence the preservation or enhancement of livelihoods while also protecting the seas and coastal areas environmental properties. The concept is therefore a cohesive and deliberate sustainable development plan that strives to integrate the ocean into all levels of an economy. Even as the oceans are exploited for economic gains, its sustainability is always emphasised.
Fishing, coastal leisure and tourism, shipbuilding, seawater desalination, offshore oil and gas and shipping are some of the economic activities in the traditional sector. But more recently, new industries have emerged in deep sea mining, biotechnology, aquaculture, seabed extraction, offshore renewable energy and blue carbon sequestration.
The blue economy has tremendous economic promise and capability. The Organisation for Economic Cooperation and Development has estimated that oceans contribute $1.5 trillion to the global economy annually and has an estimated asset value of $24 trillion. More so, the livelihood of nearly three billion people depends on ocean resources. According to estimates from the African Union, the blue economy currently brings in $300 billion for the continent and supports 49 million jobs.
Blue economy has a huge importance to national development, especially for a maritime nation. It goes beyond shipping as well as oil and gas, to encompass all the activities that involve harnessing ocean resources including fishery, renewable energy, offshore power, support network and repairs.
According to data from the Nigerian Maritime Administration and Safety Agency (NIMASA), it is estimated that Nigeria’s untapped blue economy potential is valued at $296 billion.
This shows that sustainable exploitation of resources in the blue economy can lead to job creation, improved food security, tourism and infrastructure development, and green energy, among others.
Sustainable exploitation of the blue economy resource will not only help Nigeria to generate revenue but to create employment for Nigeria’s growing population.
Most importantly, the blue economy can be driven effectively by private operators, but Ahmed believed that it is critical for the government to strengthen regulations and oversight functions that will ensure safety in line with international standards.
The following are core potentials that are yet to be tapped by the Minister of Marine and Blue Economy:
Single Window
The Nigerian maritime sector is due for a single window platform where functions of all government agencies operating at the nation’s ports are domiciled in one single document.
Port users over the years have been subjected to rigorous port processes that have led to payment of huge fees because the port is housed to many agencies of government, answerable to different ministries, both at the federal and state level.
Due to a litany of government agencies answerable to different ministries of government, many issues till date have remained unresolved. Notable amongst such issues plaguing the ports are prevalence of overtime cargoes at the nation’s ports, amongst others.
While the Nigeria Customs Service (NCS), the agency of government that has the final say on evacuation of overtime cargoes from the ports, answers to the Federal Ministry of Finance, the Nigerian Ports Authority (NPA), the agency that feels the pain of the menace of overtime cargoes inside the port, used to answer to the Federal Ministry of Transportation until now due to the creation of the Federal Ministry of Marine and Blue Economy.
With agencies like Customs, NPA, Nigerian Immigration Service (NIS), Nigeria Agricultural Quarantine Service (NAQS), National Agency for Food and Drug Administration and Control (NAFDAC) and the Nigerian Drug Law Enforcement Agency (NDLEA) all domiciled in the ports but answering to different ministries of the Federal Government, port users have been exposed to all sorts of irregularities in terms of payments during cargo clearance processes.
With a new ministry solely in charge of maritime, expectations are now high on the new minister to push for the establishment of a single window platform that will eradicate human-to-human interface at the ports while, at the same time, collapsing the different functions of all the government agencies inside the ports under one document.
Catalysing Indigenous Shipping via the Cabotage Act
To seize control of its maritime destiny, Nigeria enacted the Coastal and Inland Shipping (Cabotage) Act in 2003. This legislation was designed to empower Nigerian shipowners with exclusive rights over locally generated seaborne trade. However, the past misuse of waivers dilutes its intended impact. A calculated and judicious administration of waivers by the Minister of Marine and Blue Economy can reinvigorate the Cabotage Act. This strategic approach would empower Nigerian shipowners, safeguarding local participation and fortifying employment opportunities within the sector.
Curtailing illegal fishing activities through fishing regulation
Nigeria’s oceans are not only a source of economic opportunity but also a delicate ecosystem that requires vigilant stewardship. Rampant illegal, unreported, and unregulated fishing activities by foreign vessels have siphoned revenue and employment prospects from the nation. To address this, the introduction of the Maritime Zone Bill is crucial to safeguarding aquatic resources. Concurrently, revisiting maritime laws to establish punitive measures for foreign trawlers involved in illegal fishing can act as a deterrent. By prioritizing responsible fishing practices, Nigeria can ensure sustained economic gains from its marine resources.
The Director General of the Nigerian Maritime Administration and Safety Agency (NIMASA), Bashir Jamoh, has asserted that exploring the Nigerian blue economy offers huge opportunities for economic growth and development.
Nigeria’s vastly underutilised economy can provide a platform for opportunities but the potentials are untapped, Jamoh said on Channels Television Business Morning show.
He stated that utilising the fishery industry and wind energy is advantageous for job opportunities.
“If you take the Fishery industry alone, the value chain that creates the fishing industry is enough for Nigeria. The blue economy provides 350 million jobs worldwide,” he said.
“So, it is left for every country to stimulate what they can maximize from the 350 million jobs only in the blue economy alone. If you take fishery, you take wind energy, now we are having a problem with energy, if you take wind energy, it is underutilised.”
The NIMASA boss described the non-realization of these opportunities as “sea blindness,” adding that the blue economy also affects the state of agriculture.
“Our coastal lines are underutilised, you see packaging, you look at the oil bunkers. We have over 110, 000 ships coming into Nigeria and going out of Nigeria per annum,” the NIMASA chief added.
“There are legal bunkers, to fuel those ships is another business, it is another economy itself. Today less than 10 percent of Nigerians have the capacity to provide oil bunkers for 110,000 ships coming into Nigeria.”
Renewable Energy
Renewable energy is another aspect of the blue economy that Nigeria can harness. The country’s vast water resources provide an ideal environment for the development of hydroelectric power and other forms of renewable energy.
In this case, the ministry would have to synchronise with the Ministry of Power. By investing in renewable energy infrastructure, Nigeria can reduce its reliance on fossil fuels, mitigate climate change, and provide clean and affordable energy to its citizens. This would not only contribute to sustainable development but also create employment opportunities and attract investments in the renewable energy sector.
Tourism
Nigeria’s blue economy potential extends to tourism. It would be therefore important that the ministry collaborates and cooperates with the Ministry of Tourism in order to promote tourism and achieve its full potential.
The country’s beautiful coastlines, diverse marine ecosystems, and rich cultural heritage make it an attractive destination for both domestic and international tourists. By investing in coastal tourism infrastructure, promoting sustainable tourism practices, and preserving marine biodiversity, Nigeria can boost its tourism industry, create jobs, and generate revenue. This would not only contribute to economic growth but also promote cultural exchange and environmental conservation.
Ship Repair Industry
The absence of comprehensive ship repair facilities is an economic leak that Nigeria must plug. A thriving ship repair sub-industry, focused initially on smaller vessels, marine crafts, and tugboats, can generate employment and conserve valuable capital. As it stands, shipowners are compelled to seek repair services abroad, leading to substantial capital flight. Initiating localised ship repair operations would not only save capital but also foster job creation, ultimately contributing to the nation’s overall economic self-sufficiency.
Some analysts report that Nigeria’s exploration of the untapped potential within the blue economy holds immense promise for the nation’s development. By diversifying its economy away from overreliance on crude oil, Nigeria can unlock numerous opportunities in sectors such as fisheries, maritime transport, renewable energy, and tourism.
However, to fully harness this potential, Nigeria must invest in modern technologies, improve infrastructure, implement effective regulations, and promote sustainable practices. By doing so, Nigeria can pave the way for sustainable economic growth, job creation, and a brighter future for its citizens.
