To enhance Nigeria’s participation in the $450 billion African Continental Free Trade Area (AfCFTA) agreement, maritime industry experts have called on the Minister of Marine and Blue Economy, Adegboyega Oyetola to seek removal of the 14% duty paid on imported vessels.
The experts made the submission during the 2nd annual maritime lecture of the Maritime Reporters Association of Nigeria (MARAN), themed, “AfCTA: Dismantling Trade Barriers, Navigating Regional Trade,” in Lagos on Thursday. They posited that intermodal transportation system was a sine qua non for Nigeria to benefit properly from the AfCFTA agreement.
Chief Executive Officer, Bricks and President, Maritime Security Providers Association of Nigeria (MASPAN), Emmanuel Maiguwa at the lecture said while the minister assesses the possibility of disbursing the Cabotage Vessels Financing Fund (CVFF), a ready maritime industry growth catalyst could come from lifting the burden of payment of a whopping 14% customs duty on imported vessels from the shoulders of local shipowners.
He said: “Nigeria cannot fare well in AfCFTA trade without ships to carry goods from the country to ports in other African countries and back. Currently, Nigeria is no longer a member of the standard charter party contract with Greece. The country was removed due to the unfavourable business environment we currently have and this has greatly increased our shipping costs.
“For now, I strongly recommend that the minister of Blue Economy should work to relieve local shipowners from payment of 14% duty on imported vessels. There’s too much cost around ship acquisition in Nigeria as at today and this is making it impossible for operators to buy ship for cabotage trade and trade within the region.
L-R: Maritime expert, Dr Alban Igweh; President of Nigerian Shipowners Association, Sola Adewumi; former President, Nigerian Institute of Shipping, Capt Anthony Onoharigho; frontline Licenced Customs Broker/CEO, Wealthy Honey Invest Ltd., Dr Kayode Farinto; CEO, Mediacom/Publisher, Shipping Position, Olusesan Onilemo; representative of ED/CEO, Nigeria Export Promotion Council, Olamide Olatunde; representative of Minister of Blue Economy, Ismail Omipidan; Executive Director, Tantita Security, Capt Warriedi Enisuoh; CEO, Brisks, Emmanuel Maiguwa; Customs Area Controller, Tincan Port, Dera Nnadi; and President of MARAN, Godfrey Bivbere, during the maritime annual lecture in Lagos, on Thursday.
“For instance, if an operator wants to import a ship, he would borrow from the bank at about 35% and pay 14% duty to the Customs. Instead of keeping to dwell on the CVFF, the minister should quickly work on removal of this 14% duty from vessels importation and this can in no small measure boost ship acquisition for AfCTA trade. Remember that Nigeria is no longer a member of the Standard Charter Contract Club and this makes chartering ships a lot more expensive.”
Former President, Nigerian Institute of Shipping, Capt Anthony Onoharigho harped on the importance of transportation and logistics.
“For us to take a very favourable position in the AfCFTA, we must develop our tranport and logistics aparatusses. Intermodal transportation is critical, which means we must engage our water resources for transportation, develop our rail transport in the ports and have good road connectivity to our ports,” he said.
According to the World Bank, AfCFTA establishes one of the largest free trade areas in the world with a market of 1.4 billion people and a combined GDP of $3.4 trillion and is expected to significantly transform Africa’s trade and economic landscape.
The AfCFTA agreement presents a major opportunity for African countries to bring 30 million people out of extreme poverty and to raise the incomes of 68 million others who live on less than $5.50 per day. With Nigeria having a quarter of the continent’s population, AfCFTA is expected to lift some 17 million Nigerians out of poverty if the country position’s favourably to take advantage of the intercontental trade.
The World Bank estimates that AfCFTA could raise Africa’s exports to the rest of the world by 32% by 2035 and catalyze foreign direct investment, which is expected to increase by between 111% and 159%. The AfCFTA has brightened African trade and growth prospects.
