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|Challenges In Nigeria’s Shipping Sector by Aesculapiul: 3:12am On Apr 27, 2021|
According to a report by the United Nations Conference on Trade and Development (UNCTAD), developing economies in 2019 accounted for the largest share of global seaborne trade, both in terms of exports and imports.
The UNCTAD noted that they loaded 58 per cent and unloaded 65 per cent of the world total. With a volume of 4.3 billion tons loaded and 6.1 billion tons unloaded, Asian and Oceanian developing economies contributed most to that share.
“While developing economies remain the main maritime trade centres, the structure of their trade has changed. Since 2014, their share of world imports has exceeded their share of world exports,” UNCTAD stated.
UNCTAD added that developing economies’ declining contribution of seaborne trade exports and increasing contribution of seaborne trade imports is reflected in a steady decrease in their trade balance.
“Their balance changed from a surplus of 433 million tons in 2009 into a deficit of 49 million tons in 2014, which deepened to 776 million tons in 2019, “it stated.
However, UNCTAD stated that this development was mainly driven by the widening deficit in Asian developing economies.
Over the last 10 years, transition economies recorded a growth of their surplus from 412 to 614 million tons. For developed economies, a deficit of 820 million tons in 2009 has, over time, turned into a surplus of 155 million tons in 2019.
This is not all. In 2006, for instance, goods loaded at ports worldwide were estimated at 7.42 billion tonnes, up from 5.98 billion tonnes 2000.
The value of total world export increased from $6.454 trillion in 2002 to $40.393 trillion in 2005, representing an increase of 64 per cent.
Despite the huge contribution of shipping to global trade, Nigeria and Nigerians play marginally in the industry. It is on record that no fewer than 90 per cent of shipping companies owned by Nigerians have either completely shut down their operations or barely struggling to survive.
Some of the indigenous shipping companies include: Equitorial Energy; Oceanic Energy; Morlap Shipping; Peacegate; Pokat Nigeria Limited; Al-Dawood Shipping; Potram Nigeria Limited; Joseph Sammy, Genesis Worldwide Shipping and Multi-trade Group all in Lagos; Niger-Delta Shipping in Warri, Delta State; and Starzs Investment Group in Port-Harcourt, Rivers State.
Of all the companies listed above, only two can be said to be operating viable businesses while others are either completely dead or are in comatose.
Ironically, all the shipping companies based in Lagos are either dead or struggling to survive while the ones in Warri and Port-Harcourt are thriving. Thriving in the sense that they do coastal trade with multinational oil companies.
The companies, which the former General Secretary of the Indigenous Shipowners Association of Nigeria (ISAN), Capt. Niyi Labinjo, described as ‘struggling heavily,’ have mostly downsized and are operating with less than 20 per cent of the workers they had about two to four years ago.
THISDAY findings also revealed that all the companies are heavily indebted to banks and are mostly unable to service the loans they took to buy ships.
Recently, a major stakeholder in the industry told THISDAY that most of the ship owners have resorted to selling their landed properties to enable them service their bank loans, while others have lost prime properties to the banks.The companies, sources volunteered, also owe their crew arrears of salaries ranging from six to 14 months, while some have sold off their vessels.
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