Maritime forecast for 2019/20: What shipping industry must expect- Says NIMASA DG
- CVFF Disbursement, better funding for indigenous operators
- Hope for Anti-Piracy Bill to reduce incidents
By Udeme Clement
As part of efforts to guide investors and encourage more participation in the maritime industry, the Nigerian Maritime Administration and Safety Agency, NIMASA, has set the tone with the unveiling of the 2019-2020 maritime forecast.
The forecast is intended to give direction to operators and investors, both local and international, as to what should be expected within the period.
Speaking shortly after unveiling of the document in Lagos recently, the Director General of NIMASA, Dr. Dakuku Peterside said the maritime sector has potential of increasing its contribution to Nigeria’s GDP, as the country has the biggest market in Africa; noting that the country generates about 65-67% of cargo throughput in West Africa, and 65% of all cargo heading for these regions would most likely end up in the Nigerian market.
At the event tagged; “Harnessing the Maritime and Shipping Sector for Sustainable Growth”, the DG stated that the sector remains a pivot to stability and growth of the economy, hence the need to provide guidance for industry players, as it would attract more foreign direct investment to improve the nation’s GDP.
“The 2019 – 2020 Forecast focuses on harnessing the shipping and maritime sector for sustainable growth. Essentially, the forecast would address; how emerging trends in the global maritime industry affect maritime activities in Nigeria; and what domestic factors could influence the sector in Nigeria,” he said.
NIMASA DG assured stakeholders that the agency would continue to push for reforms to assist in developing indigenous capacity in the shipping and maritime sector, to ensure a high level playing field for operators, as 2019-2020 period is full of hope for investors.
While noting that the drivers of macroeconomic outlook for 2019 include the general elections and its aftermath, prices of crude oil and policy imperatives such as fiscal, monetary and regulatory, Dr Dakuku disclosed that the maritime forecast model adopted by NIMASA projects an increase in demand for maritime services in Nigeria, considering the global and domestic economic conditions.
On the regulatory aspect of 2019 forecast, Dr. Dakuku stated that it is expected that Suppression of Piracy and other Maritime offenses Bill (Anti-Piracy) would be passed into law within the margin of the 8th National Assembly, to provide robust and detailed framework to criminalise and punish unlawful acts in the Nigerian maritime domain.
Accordingly, he said that these measures would provide assurance to foreign investors in Nigeria and the Gulf of Guinea to a large extent on International trade. Other Bills that would impact on the sector are National Transport Commission Bill, Petroleum Industry Governance Bill, National Inland Waterways Authority Amendment Bill, Coastal and Inland Shipping (Cabotage) Amendment/Revised Bill and Ports and Harbour Bill.
The challenges highlighted for stakeholders in the sector to contend with in 2019 include funding, ethnological change, supply of specialised maritime industry skill-set, efficiency of Ports and Shipping Companies amongst others.
In the aspect of funding, the DG who observed that the Cabotage Vessel Financing Fund (CVFF) is not adequate to handle the huge demand for maritime assets, noted that the Agency is working with the Central Bank of Nigeria (CBN) and the Federal Ministry of Finance to push for funds at single digit interest rate.
It is instructive to note that the domestic conditions for the maritime sector in 2019 looks tighter considering the budgetary proposal of N8.83 trillion when compared to the approved N9.12trillion naira appropriated in the 2018 national budget.
It is noteworthy that while growth in the global maritime sector is expected to slow over the next five years with crude oil projected to decline by 0.1%, containerized trade to decline by 0.4 % and seaborne trade by 0.2%, Total fleet increase was projected at slightly over 4% growth for both 2019 and 2020. The baseline forecast is based on the 2018 outcome and 2019 Economic Recovery and Growth Plan (ERGP) forecast for total trade and foreign reserve.
The optimistic forecast is based on the assumption that total trade would increase to N28.55trillion in 2019 and N30.11 trillion in 2020, while foreign reserves is $44.7 billion in 2019 and projected to be $61.7bn in 2020. NIMASA has an optimistic projection of a 0.67 % increase in 2019 and same to be maintained in 2020.
A review of the performance of the 2018 maritime industry forecast released by NIMASA shows that the publication is reliable as the figures projected for the year almost matched the full year actual figures. While the forecast projected 0.66 growth for oil tankers and 3.21 for non-oil tankers in 2018, the actual growth rate was 0.71 for tankers and 3.0 for non-oil tankers.