A CRITICAL ASSESSMENT OF THE CHALLENGES AND PROSPECTS OF THE NIGERIAN MARITIME INDUSTRY

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A CRITICAL ASSESSMENT OF THE CHALLENGES AND PROSPECTS OF THE NIGERIAN MARITIME INDUSTRY

ABSTRACT

This work is a critical assessment of the challenges and prospects of the Nigerian maritime industry.

This research reviewed the structural nature, situational contents, abrasive occasional inconsistencies, current challenges and prospects of the Nigerian Maritime industry policy issues. This, over the years, had skewed the development and efficiency of this critical cash-cow industry that firmly holds the beacon of hope and survival of a developing economy like Nigeria. This is because, amongst all the modes of transport, Maritime industry got the worst hit in terms of poor quality funding, policy inconsistencies and lack of support from government. This is clear in the non –availability of a functional shipping policy in place to really checkmate the fraudulent sharp practices and vices that usually erupts within the confines of the system. This has in no measure, promoted the pervasive nature of foreign domination of the industry in the carriage of our local generated cargo against the interest of the indigenous stakeholders. Lack of political will to enforce the implementation of some of the initiated government policy in this industry is a strong factor for concern and consideration. This is because, the industry is one that promotes mediocrity and lack of technical and professional expertise, as that is a very key factor for not having a functional shipping policy.

TABLE OF CONTENT:

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

1.2 Statement of the Research Problem

1.3 Objectives of the Study

1.4 Significance of the Study

1.5 Research Questions

1.6 Research Hypothesis

1.7 Conceptual and Operational Definition

1.8 Assumptions

1.9 Limitations of the Study

CHAPTER TWO

LITERATURE REVIEW

2.1 Sources of Literature

2.2 The Review

2.3 Summary of Literature Review

CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Research Method

3.2 Research Design

3.3 Research Sample

3.4 Measuring Instrument

3.5 Data Collection

3.6 Data Analysis

3.7 Expected Result

CHAPTER FOUR

DATA ANALYSIS AND RESULTS

4.1 Data Analysis

4.2 Results

4.3 Discussion

CHAPTER FIVE

SUMMARY AND RECOMMENDATIONS

5.1 Summary

5.2 Recommendations for Further Study

References

CHAPTER ONE

INTRODUCTION

Background of the study

Maritime transportation in Nigeria represent a complex structure in the country’s transportation system in many ways for it provides a number of inter related and inter connected activities such as ship – harbour (that is pilotage, dredging, provision of berth, maintenance of navigable channels, stevedoring etc.), there is also ship – port interface ( loading and unloading of cargoes, freight and services) and port – land interface (delivering cargo to and from the connected hinterland). These different functions require different strategies, approaches and organizations. However, their relationship must be seriously taken into account in Maritime Transportation Policy and Planning responses. As it will be discussed in the next section, Maritime Transport plays strategic role in the economy of Nigeria. In Nigeria, practically all imports and exports move through the maritime transport sector. Hence, the efficiency or inefficiency of the maritime sector affect profoundly the cause of import as well as the competitiveness of export. Furthermore, directly and indirectly, the maritime transport sector is a large employer of labour (both skilled and unskilled). However, if indirect employment generated through the maritime sector such as insurance, customs, haulage, clearance and logistics, storage, free zones activities, sorting out the incoming and outgoing cargo, industrial and other value added activities are considered.

In view of the above, Nigeria has a great potential for an extremely buoyant maritime industry and to enjoy these benefits, it is vital that the Nigerian maritime transport system operate efficiently and resourcefully.

The role of maritime transportation in the social, economic, political and historical development of nations be it a developed or developing one is undeniably very great. In fact, the history and progress of nations is closely interwoven with the degree of development of their maritime transport system where they exist. The case of Nigeria cannot be an exception. At the economy level, an adequate and efficient maritime transport system plays a key role in the development of a country’s market especially international trade by transforming local markets in to national, regional and international hubs. It permits economies of scale in areas that have promising comparative advantage with concomitant generation of huge employment opportunities. Other associated maritime transportation potential benefits, include:

a. Providing mobility for all;

b. Creating various forms of employment and jobs;

c. Promotion of trade and commerce;

d. Revenue generation for public treasury;

e. Potential to accelerate urbanization with inherent advantages for market expansion and other cosmopolitan benefits;

f. Assisting in industrialization along with conferring economies of scale in the industrial process;

g. Encouraging building and development of institutions, some of Nigerian examples including agencies like the Nigerian Ports Authority (NPA), Nigerian Institute of Transport Technology (NITT), Nigerian Maritime Administration and Safety Agency (NIMASA), Nigerian Inland Waterways Authority (NIWA), Nigerian Shippers’ Council (NSC), Nigerian Railways Corporation (NRC), Maritime Academy of Nigeria (MAN), etc.;

h. Expansion of basic and complementary infrastructures like electricity, housing, parks, and other amenities;

i. Simulating tourism, recreational and sports growth and development;

j. Also, transport does help to advance cross-cultural and international relations whether by way of business or tourism or through cultural exchange.

In underlying the diagnostic appraisal of maritime transportation development in Nigeria, it is necessary to discuss the major attributes and characteristics associated with maritime transport especially against the backdrop of the seeming ignorance afflicting policies surrounding the sector. Notably, the key attributes and characteristics of maritime transport which is also applicable to other modes of transportation indicate that:

i. Maritime transport, essentially, is a derived demand;

ii. Maritime transport is demand responsive;

iii. The maritime transport sector shares the identical characteristic with industry of being capital intensive, that is, transport attracts huge funding and financial appropriation, whether in the area of capital investment, human resources or in routine operational and maintenance costs; there is no short cut for this.

iv. The industry is labour intensive requiring both skilled and unskilled transport workers;

v. International and global economy influence maritime transportation especially as it relates to defining the trade pattern; standards and international best practices.

vi. Maritime transport is highly susceptible to technological dynamics and changes;

vii. Finally, that infrastructural support and logistics are very important and essential to achieving effective and efficient maritime transportation system.

Undermining these underlying diagnostic factors is the beginning of the end for the national transport sector especially maritime transportation.

The Nigerian economy is classified as a “mixed economy”. But in terms of natural, material and human resources, it is a country of abundant endowments. There is also vast potential of financial, legal, communications and transport resources with a stock exchange (the Nigerian Stock Exchange), which is the second largest in Africa. Nigeria is ranked 31st in the world in terms of GDP (PPP) as of 2011. She is the largest trading partner in sub-Saharan Africa with the United States of America and supplies a fifth of USA oil imports (11% of the oil imports). Apart from registering the seventh-largest trade surplus with the US, Nigeria is the 50th largest export market for United States’ goods and the 14th largest exporter of goods to the U.S. The largest foreign investor in Nigeria happens also to be the United States. The International Monetary Fund (IMF) projected economic growth of 9% in 2008 and 8.3% in 2009 respectively for Nigeria. The IMF further projects that the Nigerian economy would grow by 8% growth in 2011. According to Citigroup, Nigeria is touted to be among one of the countries that will experience highest average GDP growth between 2010 and 2050. Furthermore, Nigeria is one of the two countries from Africa that is among the 11 Global Growth Generators countries. Previously, however, economic development had been hindered by years of political instability, military rule, corruption, and mismanagement. The restoration of democracy and subsequent economic reforms are expected to successfully put Nigeria back on track towards achieving its full economic potential. This again is very questionable. Progress may be slow and sluggish, nonetheless, Nigeria is said to be the second largest economy in Africa after South Africa, but without question, the largest economy in the West African region.

Additionally, Nigeria is the 12th largest producer of petroleum in the world and the commodity’s eighth largest exporter with an oil reserve that makes her the 10th country yet to be tapped oil reserves. Petroleum plays a large role in the Nigerian economy. The “black gold” accounts for 40% of her GDP and 80% of Government earnings. The country has a highly developed financial services sector, with a mix of local and international banks, asset management companies, brokerage houses, insurance companies and brokers, private equity funds and investment banks. Nigeria also has a wide array of underexploited mineral resources which include natural gas, coal, bauxite, tantalite, gold, tin, iron ore, limestone, niobium, lead and zinc. Despite huge deposits of these natural resources, the mining industry in Nigeria is still in its infancy and untapped which is a future window of opportunity for the maritime sector development.

Agriculture and other natural resources used to be the principal foreign exchange earner of Nigeria. At one time, Nigeria was the world’s largest exporter of groundnuts, cocoa, and palm oil and a significant producer of coconuts, citrus fruits, maize, pearl millet, cassava, yams and sugar cane. About 60% of Nigerians work in the agricultural sector, and Nigeria has vast areas of underutilized arable land. Note that the British administration in Nigeria developed the Nigerian railways system to respond to the mobility, transportation and the physical distribution logistics needs of the Agricultural Sector. This informs the spatial and network pattern of the nations railways inherited at independence. It is important to note that the revival of the Agricultural Sector has began.

Though recent reforms in Nigeria have raised the investment rate, despite the “global slowdown,” Nigerian economy is growing strongly particularly in the areas of: New Oil, Gas, Mineral Wealth and the increased opportunity for inclusive development. This hope is expected to tarnish when the expected transport infrastructure response and support are absent especially maritime transportation. According to the recent edition of Africa’s Pulse publication, the new discoveries in oil, gas and other mineral sectors in Nigeria as well as in other African countries can generate a wave of significant wealth in the region. With mineral resources earning hundreds of millions of dollars in revenues for countries, the windfall can stimulate not just Nigeria but a continent-wide economic development.

1.2 Statement of the problem

What has to be emphasized is that comprehensive development of transport infrastructure especially maritime that is meant to support the nation’s international trade is sine qua non to the maximization of the potential benefits to be derived from the exploitation of the new mineral wealth resources. Granted as claimed by Africa’s Pulse that the economic importance of natural resources is likely to continue in the medium period, without developing efficient, effective, safe and comprehensive transport infrastructure, there will be disproportionate gains not just in the long-term but right from the very beginning. The examples from countries have made this expedient. In 2010, Guinea alone represented over 8 percent of total world bauxite production; Zambia and the Democratic Republic Congo have a combined share of 6.7 percent of the total world copper production; while Ghana and Mali together account for 5.8 percent of the total world gold production. Yet, the point has to be stressed that the missing gap has to be filled as: “Resource-rich African countries have to make the conscious choice to invest in better transport…” as a primary engine of their economic growth. Without that, future development will be futile.

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