Building upon the momentum generated by recent developments in Nigeria’s economic landscape which is catalysed by the coming on-stream of the Dangote and Port-Harcourt Refineries, the creation of a Ministry of Maritime and Blue Economy and the delisting of Nigeria from the list of risky maritime nations by IBF, it is crucial to delve deeper into actionable strategies that can propel the nation into a leadership role in the maritime and blue economy sector.
In this opinion piece, we propose a series of strategic initiatives aimed at maximizing Nigeria’s maritime potential, boosting economic growth and ensuring that the benefits extend to the grassroots.
There exists a dynamic nexus between Nigeria’s petroleum and the maritime industries, requiring the country to leverage its position as one of the world’s major oil producing countries that is rapidly transforming and diversifying its economy into a major globally competitive player in the petrochemical value chain expanding and diversifying along the entire spectrum of the value chain.
Arguably, Nigeria has a significant offshore maritime industry with many national operators seeking to grow their enterprises into higher value chain. However, this has eluded many administrations due to lack of an integrated, comprehensive value and supply chain approach by the entire Nigerian maritime industry. The industry lacks a compelling vision to rally the country and build strong market linkages with other high growth sectors in the economy necessary to create new and innovative pathways to positioning Nigeria Maritime into a world class maritime center.
For demonstration purpose, it can be argued that to grow the maritime industry on the back of the Nigeria’s oil industry and strong strategic linkages to the rapidly expanding petro-chemical industries that is spurred by the commissioning of the new refineries is a no brainer.
A strategy based on a compelling vision to grow Nigeria Maritime with the nexus with the petrochemical sector would require a comprehensive programme that includes but is not limited to:
– Building and transforming Nigerian ports into competitive international maritime service hubs embedded in the global supply chain. A far cry from the current uncompetitive models of port development that only has loading and unloading points.
– Build indigenous international fleets to deliver petro-chemical products to markets; this requires radical changes away from the current regressive FOB export policies that drain the national economic value.
– Building new maritime manufacturing and service hubs such as the globally competitive marine bunkering industry, involving the production, trading and supply of cleaner future marine fuel in collaboration with the new refinery investment.
– Leveraging the infrastructure, industries and services provided by commercial entities in the sector, Nigeria could build lucrative ancillary commercial and regulatory services that can be leveraged in positioning Nigeria as an International Maritime Center where services such as maritime and trade finance, insurance, legal and crewing services can be sourced as part of the international transactions; thereby creating massive enterprise opportunities, jobs and improving the dollar reserves of the state.
It is essential for the government, policymakers, and relevant stakeholders to adopt a countrywide approach to maritime development and collaboratively work towards implementing these clearly defined strategic programmes and operational initiatives, ensuring that the benefits of the blue economy reach every corner of the nation and contribute to the prosperity of all its people. As Nigeria sets sail into a new era of economic possibilities, strategic actions in the maritime sector will undoubtedly become the new economic trajectory on the nation’s decided course towards a brighter and more inclusive future.
Key Initiatives –
1. Bunker Fuel Production at Dangote and Port-Harcourt Refineries:
Recognizing the need for alternative energy sources in the maritime industry, we propose that the Dangote and Port-Harcourt refineries explore the production of bunker fuel. Bunker fuel is a key component for the shipping industry, and by tapping into this market, Nigeria can meet domestic demand, supply regional markets under AfCFTA and position itself as a reliable global service provider for passing vessels. This move aligns with the future facing global shift towards cleaner energy sources in shipping, presenting an opportunity for Nigeria to contribute to sustainable practices in maritime operations.
2. Establishment of Refueling Zones Outside Nigeria’s Ports to Service Passing Maritime Trade:
To capitalize on the strategic location of the Gulf of Guinea, Nigeria should consider establishing a network of offshore ship refueling stations/zones outside its usual port limit areas. These refueling zones would serve as an alternative to the troubled waters of the Gulf of Aden, Red Sea and Panama offering passing vessels a safe and efficient refueling and chandling options. This initiative not only enhances Nigeria’s reputation as a maritime hub but also contributes to the safety and security of international shipping routes, fostering increased maritime activities in the region.
3. Empowering Small-Scale Shipping Businesses:
Recognizing the potential surge in demand for tonnage resulting from the establishment of the indigenous tonnage, refueling hubs, and many commercial ancillary services, it is imperative to incubate startups, support and empower small-scale shipping businesses and individual professionals. This can be achieved through targeted policies, financial incentives, and capacity-building programs. By supporting local entrepreneurs, professionals and coastal communities in the maritime sector, Nigeria can create a vibrant ecosystem of small-scale shipping businesses, professionals and communities, fostering job creation, financial mobility and economic growth at the grassroots level.
4. Shift Incoterms from FOB to CIF Export Shipping Policy:
In a bold move to stimulate and localise economic activities and benefit the common citizen, Nigeria should consider transitioning from a Free on Board (FOB) to a Cost, Insurance, and Freight (CIF) in its export shipping policy on key strategic trades, particularly in the hydrocarbon sector where the nation holds a comparative advantage. By adopting a CIF policy in export and FOB in imports, Nigeria and its maritime industries and businesses will exert control and influence on the delivery of its traded goods, cease to be a price taker and protect its dollar currency reserves; by assuming responsibility for shipping costs, sourcing insurance, and freight, Nigeria will be able to provide a more inclusive approach that percolates the benefits of shipping trade to the man on the street. This shift can catalyze trade financing, boost shipping insurance, and drive vessel chartering activities within the Nigerian maritime space.