Business & Economy

Reps pass Bill to restrict foreign vessels in Nigeria coastal waters

The House of Representatives on Thursday passed for second reading a bill that seeks to restrict the use of foreign vessels in domestic coastal and inland commercial activities and paving the way for Nigerians to operate without competition from foreign vessels.

The bill titled “An Act to Amend the Coastal and Inland Shipping (Cabotage) Act, No. 5, 2003 to Restrict the Use of Foreign Vessels in Domestic Coastal and Inland Commercial Activities, to Promote the Development of Indigenous Tonnage and Establish a Cabotage Vessel Financing Fund; and for Related Matters” is sponsored by Hon. Lynda Ikpeazu.

Leading the debate on the bill, Hon. Ikpeazu lamented that with all its maritime potentials of almost 900km of coastline and over 10,000km of inland waterways, there is a dismal, if not almost non-existent, participation of our indigenes in our domestic shipping industry despite a booming offshore oil and gas industry increasingly dependent on the coastal waters and a growing inland waterways traffic.

She said it was with a view to boosting indigenous participation in domestic shipping activities, the 4th National Assembly piloted the enactment of the Coastal & Inland Shipping (Cabotage) Act of 2003 which was the first local content legislation of this democratic dispensation.

She stressed that Cabotage laws (legislations that restrict shipping in domestic waters to nationals) existed in over 50 maritime nations worldwide, including Malaysia, Brazil and a continental version.

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According to her, “our Cabotage Law, set out to prescribe that only Nigerian built vessels, owned, as well as crewed by our nationals, and flying the Nigerian flag will operate in our domestic waters, unless exempted by authorized waivers.

“A successful cabotage regime comes with many beneficial advantages; jobs for crewmen, commercial  benefits of local ship building and repairs, increased tonnage in our ship registry, enhanced security of our domestic waterways, economic advantages of having Nigerian ship owners etc.

“In over 15 years of its operation, the question has always been, have we achieved our desired objective of increased indigenous participation?  Yes, we may have seen some increase in shipping entrepreneurship, minor incursions in ship-building, more training for prospective sailors (crew) etc. But by-and-large, our domestic shipping activity is still foreign dominated”.

While saying that the Cabotage in Nigeria hasn’t achieved its potential, Hon. Ikpeazu said “there are many factors responsible for why it hasn’t met the targets of its original promoters.  These range from administrative to   attitudinal to operational determinants.  But some impediments are also legislative.

“The over 15 years of implementing the law has revealed statutory gaps not envisaged at the time of its enactment.  Some adjustments to the provisions of the law could not just expand coverage, but also sharpen enforcement capabilities.

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“A review, or at least amendment of the Cabotage Act 2003, thus became instructively imperative. Suffice it to say that a bold attempt at this was done in the 8th Assembly.  Infact, the amendment bill was passed, but however failed to receive the accent of Mr President, citing certain reservations.

“The 9th Assembly has offered another opportunity for us, as a parliament, to do the needful and give cabotage the necessary “teeth” for success.  The Coastal and Inland Shipping (Cabotage) Amendment Bill 2020 sets out to achieve this.  It addresses the shortfalls of the principal Act, with a view to ultimately making Cabotage, a policy success.”


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