The study is a survey on the performance of indigenous sea farers in Nigeria coastal shipping industry, and how it has affected indigenous shipping operators since its enactment as an Act over eight years ago with so much promises and expectations from various stakeholders in the Nigerian shipping industry. Cabotage policy generally, is examined as a protectionist policy used in many countries to safeguard the local shipping industry against unfavourable competition with foreign companies, especially in the carriage of coastal cargoes within the country. The discussion thereafter narrows down to the cabotage policy in Nigeria, tracing various efforts of successive governments to bring about a policy that would cater for the interests of local shipping operators and enhance their participation in the carriage of sea-borne trade to and from Nigeria. The study also assesses the implementation of the cabotage policy. The challenges encountered and various efforts of government, aimed at overcoming those challenges and ensuring that the objectives of the Cabotage Act are attained, are also examined in the course of the study. The study also analyses the effects of the policy on indigenous shipping development in the country, using questionnaires to gauge the opinions of stakeholders, as to the success of the policy. The various findings revealed that the policy has not met the expectations of the indigenous operators. However, the study concludes that the renewed efforts of government, especially NIMASA, if sustained, will change the situation for the better. It equally proffers recommendations towards the successful attainment of the objectives of the policy.
TABLE OF CONTENT
Table of content
1.1 Background of the study
1.2 Statement of problem
1.3 Objective of the study
1.4 Research Hypotheses
1.5 Significance of the study
1.6 Scope and limitation of the study
1.7 Definition of terms
1.8 Organization of the study
2.0 LITERATURE REVIEW
3.0 Research methodology
3.1 sources of data collection
3.3 Population of the study
3.4 Sampling and sampling distribution
3.5 Validation of research instrument
3.6 Method of data analysis
DATA PRESENTATION AND ANALYSIS AND INTERPRETATION
4.2 Data analysis
- Background of the study
Shipping plays an important part in the economic life of nations. This is because it provides an inexpensive way of carrying people and goods from one place to the other, compared with other modes of transport. It may be between one country and another or even within a particular country, moving from one coast to the other. The demand for shipping is an indirect one as it is not demanded as an end in itself, but only as a means to an end. In other words, it is a derived demand, since it does not create its own demand, but its demand is derived from trade in goods (Ma, 2009, pp 4-5). Generally, shipping activities have been going on for a very long time. The first known sea trade network was developed about 5,000 years ago between Mesopotamia, Bahrain and the Indus River in Western India (Stopford, 2009, p. 7). In modern times, shipping has assumed an important position in the carriage of goods and passengers across the globe. It constitutes an important component in world trade, carrying about 90% by volume of cargoes generated globally. The modern international maritime transport system falls into three zones: interregional transport, which covers deep-sea shipping; short-sea shipping, which transports cargoes of short distances and often distributes cargoes brought in by deep-sea services; and inland transport (Stopford, 2009, p. 50). Deep-sea shipping is the only economic transport between the continental landmasses for high-volume inter-regional cargoes. On the other hand, short-sea shipping provides transport within regions. It involves distribution of cargo delivered to regional centres by deep-sea vessels. However, short-sea shipping is subject to many political restrictions, one of which is cabotage, the practice of enacting laws which reserve coastal trade to ships of the national fleet of a particular country (Stopford, 2009, p. 50-51). Ocean shipping is one of those three vital economic areas whose indigenous control or lack of it may make or mar the fortunes of a country‟s socio-political independence. Of the other two – banking and insurance – significant progress at such control has been made in Nigeria. In the case of ocean shipping, Nigeria is still to have effective control in this area covering the supply and pricing of the services to the country. The government mindful of the need to develop indigenous merchant marine fleet or shipping industry has at various times initiated policies and projects to boost indigenous vessel acquisition, increase participation of Nigerians in the maritime industry, limit the domination of foreigners in the maritime industry and develop indigenous shipping industry. Notable in this respect is the acquisition of 24 vessels by the now defunct Nigerian National Shipping Line (NNSL) in the 1970s and the establishment of the Ship Acquisition and Ship Building Fund (SASF) under National Shipping Policy Act 1987 Cap. 44 LFN 1990, but all these initiatives failed to achieve their objectives. The commercial operations of carriage, goods, services and passages in the inland and coastal waters of Nigeria were still almost exclusively dominated by foreign owned and foreign crewed vessels. Consequently, in pursuance of the success of Nigeria on maritime reforms, Nigeria made a bold attempt to change the face of maritime business within its coasts or upturn the dominance of foreign owned and foreign crewed vessels when it enacted the Coastal and Inland Shipping (Cabotage) Act, 2003 to be enforced by the National Maritime Authority (NMA) now Nigerian Maritime Administration and Safety Agency (NIMASA). The objective of the Cabotage Act is primarily to reserve the commercial transportation of goods and services within coastal and inland waters to vessels flying the Nigerian flag and owned by persons of Nigerian citizenship. The Cabotage regime is therefore an Act that reserves the commercial transportation of goods and services within the Nigeria coastal and inland waters to vessels flying Nigeria flays, that is, vessels owned and crewed by Nigerians. Yet for about eight years, that is, since 2003, the Cabotage Act was enacted, the foreign owned and foreign crewed vessels still dominate the commercial operations of carriage, goods, services and passengers in the inland and coastal waters of Nigeria (Okoroji and Ukpere, 2011). Usoro (2003) and Biu (2007) state that despite the fact that Nigeria has about 3,000 kilometres of inland waters, six major ports and ten crude oil terminals, and several inland ports in Onitsha, Oguta, Opobo, Lokoja, Baro, Jebba, etc. Yet in the year 2000, only 139 indigenous marine vessels less than 6%, were involved in this traffic with a cargo throughput of 441, 031 tons about 1%. Indigenous shipping companies do not own any vessel for deep-sea trade and a few that participate operate the vessels on charter. A study carried out by the International Maritime Organization (IMO) on Nigeria’s maritime industry in April 1999 reported that only 97 vessels excluding fishing vessels were registered under the Nigerian flag. Out of the 97 vessels, 66 vessels were tankers, 200 vessels were cargo vessels and one passenger vessel. According to Office of the Registrar of Ships, in 2002, Nigeria has 98 tankers more and 26 cargo vessels just about 32 tankers more and 6 cargo vessels more. A closer examination of the Nigerian flagged vessels would show that most of these vessels are actually owned by foreigners. From the foregoing, Nigerian maritime sector including cabotage Subsector is undoubtedly dominated by foreign owned and foreign crewed vessels. Biu (2007) notes that, a subsequent survey conducted in 2004 by National Maritime Authority showed that only 11 out of 245 coastal vessels that operated in the Onne oil and gas free zone axis in 2003 were owned by Nigerians. During the same period out of 266 tankers that were engaged in coastal trading in the Apapa port only 44 tankers about 16.5% were Nigerian owned while 222 about 83.5% were foreign-owned. The total metric tonnage of petroleum products carried by the Nigerian owned tankers were 97,041 tons amounting 3.4% while the foreign owned tankers carried 2,745,365 metric tons amounting to 96.6% of the entire volume of cargo. This confirms the reality of foreign domination in the coastal trade. The survey also showed that West African Offshore (WAOS) chartered 16 vessels, all of which were foreign flagged, except one; and out of 183 crews, only 45 crews about 24.5% were Nigerians. Consequently, Igbokwe (2006) identifies some of the challenges and problems of enforcing the Cabotage Act which include; one, exclusion of Indigenous Shippers Association of Nigeria (ISAN) from ministerial consultation process in granting waivers; two, inadequate implementation and monitoring of inter-ministerial and inter-agency/ inter-unit wrangling and uncooperative attitudes; three, high cost of enforcement and monitoring; four, lack of political will and determination; five, lack of confidence; six, local/foreign operators’ dichotomy; and seven, resolution of Cabotage disputes/differences by the court. Generally, over the years, various countries have sought to protect their citizens by restricting participation in key sectors of the economy to the citizens, usually through restrictive/protectionist policies and although shipping is international, the maritime industries of some nations have not been immune from such policies. An instance of this is the restriction of participation in the coastal carriage of cargo of a maritime nation to the exclusive preserve of its citizens, otherwise known as cabotage (Agidee, 2003, p. 1) Maritime transport is very central to the Nigerian economy. This centrality is underscored by the very nature and structure of Nigeria‟s international trade. Nigeria‟s economy can be said to depend largely on the efficiency of international trade and commerce. Consequently, the development of maritime transport capacity becomes important for her economic survival (Nigerian Maritime Administration and Safety Agency [NIMASA], 2009, p. 4). Realizing this importance, successive governments in Nigeria since independence have made considerable efforts through various policy strategies and administrative measures to encourage indigenous shipping capacity development, even in the face of threats from developed countries that have always monopolized the trade. The climax of all these efforts was the promulgation of the National Shipping Policy Decree 10 of 1987 by the Federal Military Government. Thus, the National Maritime Authority was established to coordinate the implementation of the shipping policy This move was necessitated by the desire to fully promote and develop the nation‟s maritime resources, protect and encourage the indigenous shipping industry as well as generate accruable revenue for national development. Furthermore, in order to ensure the development of domestic shipping in Nigeria, through the empowerment of Nigerians to be able to handle all aspects of coastal and inland waterways transport, the Coastal and Inland Shipping (Cabotage) Act was enacted in May 2003. However, eight years after the promulgation of the Cabotage Act, indigenous shipping development seems not to have improved, rather, it seems to be worsening. Fleet expansion has not been achieved; instead there has been a considerable depletion of the national fleet. It is in the light of this that the researcher wishes to examine the impact of the cabotage regime on the development of indigenous shipping and to identify what has been responsible for the unimpressive performance of the local shipping lines in Nigeria‟s shipping trade, especially coastal shipping.
- STATEMENT OF THE PROBLEM
Shipping is a global industry handling ninety percent of the global trade (in terms of volume). This makes the industry a lifeline of world trade. Due to the mobile nature of the asset, the ship, the freight rates available in any particular route is significantly different from what is charged in others. This makes the global shipping trade/market totally dependent on what is going on at the global stage. Realizing this importance, successive governments in Nigeria since independence have made considerable efforts through various policy strategies and administrative measures to encourage indigenous shipping capacity development, even in the face of threats from developed countries that have always monopolized the trade. It is in view of the above that the researcher intends to investigate the performance of indigenous sea farers in the Nigerian coastal shipping industry
- OBJECTIVE OF THE STUDY
The main objective of this study is to investigate the performance of indigenous sea farers in the Nigerian coastal shipping industry; but to aid the completion of the study, the researcher intend to achieve the following specific objective;
- To examine the effectiveness of cabotage policy in the development of indigenous shipping industry in Nigeria
- To examine the role of Nigerian coastal shipping industry in Nigeria’s economic growth
- To examine the relationship between marine transport and economic growth
- To assess the impact of cabotage policy on indigenous shipping in Nigeria, with a view to seeing whether or not it has achieved the purpose for which it was set up;
- RESEARCH QUESTIONS
The following research questions were formulated by the researcher to aid the completion of the study
- How effective is cabotage policy in the development of indigenous shipping industry in Nigeria?
- Does Nigerian coastal shipping industry play any role in Nigeria’s economic growth?
- Is there any relationship between marine transport and economic growth?
- Does cabotage policy have any impact on indigenous shipping in Nigeria?
- RESEARCH HYPOTHESES
To aid the completion of the study, the following research hypotheses were formulated by the researcher;
H0: Nigerian coastal shipping industry does not play any role in Nigeria’s economic growth
H1: Nigerian coastal shipping industry does play a role in Nigeria’s economic growth
H0: there is no significant relationship between marine transport and economic growth
H2: there is a significant relationship between marine transport and economic growth
- SIGNIFICANCE OF THE STUDY
It is believed that at the completion of the study, the findings will be of great importance to the management of NIMASA as the study will be useful in policy formulation and implementation in respect of marine transport by indigenous sea farers, the study will also be useful to indigenous sea farers and potential sea farers in respect of compliance with the government laid down rules and policies in respect of marine transport and administration. The study will also be useful to researchers who intend to embark on a study in a similar topic as the study will serve as a reference point to further research. Finally the study will be useful to students, teachers, academia’s, lecturers, government agencies and the general public as the study will contribute to the pool of existing literature on the subject matter and also add to knowledge.
- SCOPE AND LIMITATION OF THE STUDY
The scope of the study covers a survey on the performance of indigenous sea farers in the Nigerian coastal shipping industries. But in the cause of the study, there were some factors which limited the scope of the study;
- a) AVAILABILITY OF RESEARCH MATERIAL: The research material available to the researcher is insufficient, thereby limiting the study
- b) TIME: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.
- c) Organizational privacy: Limited Access to the selected auditing firm makes it difficult to get all the necessary and required information concerning the activities
1.8 OPERATIONAL DEFINITION OF TERMS
A sailor, seaman, mariner, or seafarer is a person who navigates waterborne vessels or assists as a crewmember in their operation and maintenance
Coastal shipping, that is shipping within 20 nautical miles of the coastline Operations carried out in coastal areas of the country is said to be coastal shipping for ex: loading of fishes, and other resources within the country
Cabotage is the transport of goods or passengers between two places in the same country by a transport operator from another country
1.9 ORGANIZATION OF THE STUDY
This research work is organized in five chapters, for easy understanding, as follows
Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study. Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature. Chapter three deals on the research design and methodology adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding. Chapter five gives summary, conclusion, and recommendations made of the study
This material content is developed to serve as a GUIDE for students to conduct academic research
A SURVEY ON THE PERFORMANCE OF INDIGENOUS SEA FARERS IN THE NIGERIAN COASTAL SHIPPING INDUSTRIES>
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