Indigenous maritime operators are beginning to take their destiny into their own hands since the enactment of the Cabotage law, which is now Act of the National Assembly.
It became obvious that the Cabotage Act has given impetus to indigenous maritime operators to become conscious of their rights as well as to enforce it for the overall development of Indigenous flagships, as against the maritime dominated by foreign flagships.
This conciousness that was elicited by the Cabotage regime which by implication could be termed the beginning of real development of Nigerian maritime came to bare when the Nigerian ship owners, through their umbrella body, the indigenous Shipowners Assocation of Nigeria (ISAN) went to court late last year to seek redress against foreigners encroachment into the business that was legitimately reserved for them by law.
This step taken as evidenced in the litigation clearly reveals the level of frustration of indigenes in the maritime operations in Nigeria by their foreign counterpart, as many of them merely operate like prostitutes, as they are often found hanging around the water side or offices where oil lifting contracts are awarded, in search for patronage that can keep them afloat.
It was a sad experience for indigenous ship owners whose hopes were dashed, as the foreign shipowners have perfected ways of circumventing the law (Cabotage) under which they were dragged to court.
Turn out in the case clearly justified the need to review the Cabotage law, which also could be referred to as the law of Coastal and Inland Shipping, which reserved the business of lifting or carriage of goods and passengers from one point to another within the country to Nigerian built, flagged and crew vessels.
The litigation was carried out jointly by Pokat Nigeria Limited and the indigenous ship owners, where a foreign shipping company, MBX of St. Vincent and Grenada was accused of using its vessel to transport petroleum products within the country, which is contrary to the provisions of the 2003 Nigerian Inland and Coastal Shipping Act (The Cabotage act).
The verdict of the trial Judge, Justice Okechukwu Okeke, clearly points out short-comings associcated with the Cabotage law, as he dismissed the case on the evidence that the vesel actually carried the products from Cotonou, the Republic of Benin and not within Nigeria.
In his ruling, the Judge stated, “MBX Shipping Limited and MT Makhambet did not breach the act since the ship was loaded in Cotonou, Benin Republic, undermining the fact that there was no refinery in Cotonou to warrant the loading of petroleum products from the country”.
One good thing the judgement has done is to expose the weakness of the Cabotage act, so that steps could be taken to amend it, so as to resolve future cases in favour of indigenous operatives, if really the indigenous maritime operators must take their destiny in their own hands, towards the legacy of real development of Nigerian maritime.
Indeed, the law itself needed amendment for easy interpretation at the court of law, and indeed since 2007, the Cabotage Act has been going through review, by a committee chaired by former chairman of Senate Committee on Marine Transport, Senator Ugochukwu.
The Act in section three had stated: “A vessel other than a vessel wholly owned and manned by a Nigerian citizen built and registered in Nigeria shall not engage in the domestic coastal carriage of cargo and passengers within the territorial, coastal, Inland waters, Island or any point within the waters of the exclusive economic zone of Nigeria”.
The indigenous operators may have relied on the provisions of section five which made it impossible for foreign ship and foreign ship owners to engage in carriage of petroleum product from one point to another within Nigeria.
It must be put in focus that the Cabotage Act came to existence because of the need to gradually encourage the Nigerian maritime indigenous operators to actively participate in shipping business, but several years after, the people for which it is intended are still crying foul, which simply means that there is a crack in the law itself.
This of course is a challenge for the Federal Government, and indeed the Nigerian Maritime Administration and Safety Agency (NIMASA), which duties also include encouraging and empowering ship owners among others.
The Nigerian maritime must move forward, and the success of which will begin with proper enactment of laws that will protect indigenous operators, for which Cabotage is a must.
FG, States, LGAs Share N736.782bn In Oct
The Federation Account Allocation Committee (FAAC) has disbursed N736.782 billion from October 2022 Federation Account Revenue to the Federal Government, States and Local Government Councils.
This amount was augmented by an additional N70 billion distributed to the three tiers of government.
Federal Government received N36.876 billion, States got N18.704 billion, Local Government Councils received N14.420 billion.
An extra N30 billion Augmentation was made from non-oil revenue and distributed, with Federal Government getting N15.804 billion, States getting N8.016 billion, and Local Government Councils getting N6.180 billion.
According to the communiqué at the end of the FAAC, at the meeting for November 2022, the N736.782 billion total distributable revenue was made up of N417.724 billion distributable statutory revenue; N213.283 billion Value Added Tax (VAT) revenue; N5.775 billion Exchange Gain revenue.
In October 2022, the total deductions for cost of collection amounted to N33.555 billion and total deductions for transfers, savings and refunds was N186.749 billion.
The balance in the Excess Crude Account (ECA) still remains at $472,513.64.
The communiqué confirmed that from the total distributable revenue of N736.782 billion, the Federal Government received N293.955 billion, the State Governments received N239.512 billion and the Local Government Councils received N177.086 billion.
The total sum of N26.228 billion was shared to the relevant States as 13 percent derivation revenue.
Gross statutory revenue of N622.270 billion was received for the month of October 2022. This was lower than the sum of N825.710 billion received in the previous month by N203.440 billion.
From the N417.724 billion distributable statutory revenue, the Federal Government received N206.576 billion, the State Governments received N104.778 billion and the Local Government Councils received N80.779 billion. The sum of N25.591 billion was shared to the relevant States as 13 percent derivation revenue.
For the month of October 2022, the gross revenue available from the Value Added Tax (VAT) was N229.041 billion. This was higher than the N203.960 billion available in the month of September 2022 by N25.081billion.
The Federal Government received N31.992 billion, the State Governments received N106.642 billion and the Local Government Councils received N74.649 billion from the N213.283 billion distributable Value Added Tax (VAT) revenue.
The N5.775 billion from the Exchange Gain revenue was distributed as follows: the Federal Government received N2.707 billion, the State Governments received N1.373 billion, the Local Government Councils received N1.058 billion and the relevant States received N0.637 billion as 13 percent derivation revenue.
According to the Communiqué, in the month of October 2022, Value Added Tax (VAT) and Companies Income Tax (CIT) increased significantly while oil and gas royalties, Petroleum Profit Tax (PPT) and Import Duty recorded considerable decreases.
$1bn Looted Funds Recovered Since 2015 – Malami
Nigeria’s Attorney-General and Minister of Justice, Abubakar Malami, has revealed that the current administration has so far recovered about $1 billion looted funds till date.
Malami disclosed this while briefing State House Correspondents after the week’s Federal Executive Council (FEC) meeting presided over by President Buhari at the Presidential Villa, Abuja.
He also disclosed that Council has approved a new Anti-corruption Strategy Document to strengthen anti-graft campaigns in the country.
He said the recovered assets had been deployed to various sectors of the economy, including poverty alleviation.
Malami also expressed government’s concern over cases of budget padding, which he described as worrisome, noting that every necessary measure would be explored to address it.
Minister of Humanitarian Affairs, Disaster Management and Social Development, Hajiya Sadiya Umar Farouq, had blamed the Minister of Finance, Budget and National Planning, Zainab Ahmed, for adding N206bn to the Humanitarian Affairs Ministry’s budget.
Nigeria Loses $2bn To Oil Theft In Eight Months
The ad-hoc committee set up by the Senate to investigate oil theft and consequent damage on the nation’s economy has said Nigeria lost $2 billion (an equivalent of N1.3trillion) to oil theft between January and August this year.
The committee’s report, which was adopted by the Senate in plenary on Tuesday, made far-reaching recommendations for stemming the tide.
It, however, failed to name a single person or corporate entity carrying out the oil theft.
In one of its findings, the committee said, “Nigeria lost over $2bn to oil theft between January and August 2022, with consequent loss of revenue that would support the country’s fiscal deficits and budget implementation.”
The report indicated concerted efforts being made against the crime by all stakeholders, saying that they had started yielding results, with Forcados Terminal now producing 500,000 barrels per day as against zero production in the first six months of the year.
“Bonny Terminals was also producing 87,000 barrels of oil per day now as against zero production a couple of months ago due to activities of economic saboteurs”, the report stated.
The 16-point recommendations of the committee as adopted by the Senate stated in part: “ the Nigerian National Petroleum Company Limited should stop undermining Nigerian Upstream Petroleum Regulatory Commission and Nigerian Midstream and Downstream Petroleum Regulatory Authority from performing their functions.
“The provisions of the Petroleum Industry Act should be adhered to by NNPCL as regards functions of the established agencies.”
The report called for an immediate streamlining of agencies present at the terminals in line with the relevance of their PIA-delineated upstream and midstream/downstream statutory functions.
According to the report, the NUPRC should fast-track the upgrade of the National Production Monitoring Systems to enable real-time monitoring of flow station and terminal activities.
The NUPRC should expedite the deployment and strict enforcement of the Advance Crude Oil Cargo Declaration solution for the detection and mitigation of illegal movement of vessels to ensure adequate revenue generation and optimal crude oil production, it stated further.
It continued that the Bureau of Public Procurement should expedite all processes of procurement for NUPRC to ensure immediate deployment of an online real-time monitoring system by the commission across all upstream oil and gas production platforms for accuracy in measuring production volume by producers.
The report further said the NUPRC should resume full regulatory oversight of all existing crude oil terminals in Nigeria, including integrated ones, crude oil pipelines, issuance of loading clearance, and processing of export permits in line with section 8(d) of the PIA, as regulatory activities at crude oil terminals are interdependent and contingent.
It also faulted what it called undue interference of the Minister of State in the operations of NUPRC as shown with letters made available to it by the agency, stressing that both the minister and NNPCL should allow PIA to function.
“The PIA as signed into law by the President, must be allowed to function by all stakeholders in the sector as an amendment on it now, will send wrong signals to the International community”, it stated.
Recall that the Senate on April 14, 2022, constituted a 13- member Ad – Hoc Committee on Oil Lifting, Theft, and the impact on Petroleum Production and Oil Revenues under the chairmanship of Senator Akpan Bassey, who is also the chairman, of the Senate Committee on Petroleum ( Upstream).
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