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Here are top investments, business opportunities in Nigeria’s maritime sector
Over the years, maritime transportation has made the movement of cargoes of all type and volume possible, especially by engendering economies of scale through massive cargo transportation, which has positively impacted global logistics value chain.
Statistics show that about 90 percent of world merchandise/trade by volume is carried by seas while over 60 percent of all imports to West Africa are Nigeria-bound.
Therefore, a recent report by the Nigerian Maritime Administration and Safety Agency (NIMASA), tagged Nigerian Maritime Industry Forecast 2019-2020, which described the port as an enabler of economic growth and prosperity, listed the following business opportunities for potential investors:
Shipping is capital-intensive as critical maritime assets are usually long-term assets that have longer life span and gestation periods. This is why Nigeria’s Maritime Industry Forecast states that government intervention in the sector is essential to source funding required to unlock the acquisition of these maritime assets.
However, prospective investors should seek innovative financing models, while new sources of funding should be explored away from existing traditional models.
“Effectiveness of seeking and securing financing will, however, only be achieved with adequate evaluation and provisioning for risks, appropriate leverage levels and use of financing structures most suitable to a maritime asset at hand.
According to the forecast, capital market remains critical for the enhancement as well as the promotion of shipping business growth and creation of corporate value.
Ship building and ship repairs:
The maritime industry in Nigeria holds a lot of promise for economic development, one of which is the gradual migration of Nigeria’s oil and gas exploration towards deep offshore, off the coast and in the coastal waters. This would increase the demand for more offshore support vessels including the FPSOs, tankers and platforms.
The NIMASA forecast revealed that a capacity audit of ship building and ship repair yards in Nigeria has been commissioned as this subsector remains under-developed and has potentials of reducing capital flight, if vessels are dry-docked in country.
There are huge investment opportunities in building of vessels to meet national and Cabotage requirement such as Barges, Tugboats, Crew Boat, Fishing Vessels, Merchant Ships, Tankers, House Boat, Offshore Support Vessels, Crew/Supply Vessel, Self-Propelled Barge, Supply Vessel, Patrol Boat, Dredgers, Multipurpose Vessel, A.H. TUG, Jack up Barge, Muster Barge, Floating vessel, Lift Boat and Patrol Vessel.
Investments in the form of funding, technology and human capacity building are some opportunities to be explored by both local and international investors.
“Dry Docking remains a critical area of investment with over 3,500 vessels operating in Nigerian waters and largely been dry-docked outside the shores. Nigeria has quite a few ship yards in operation but the capacity remains at an all-time low,” the forecast stated.
The role of insurance in the growth and development of the economy cannot be over emphasised. This is because insurance has the ability to mitigate the impact of risk and positively correlates with growth as investors and entrepreneurs cover their exposures and incur more risk abilities.
“An overview of the insurance industry shows that motor, general accident and marine insurance contributes positively to the development of the insurance market in Nigeria by their positive coefficients.
“Hence, marine insurance will continue to exert significant influence on the insurance business in Nigeria. For marine insurance to thrive, underwriters must adopt a realistic approach to the enormous build-up of exposures in the maritime trade,” the forecast advised.
“Nigeria’s marine subsector is one of the most under-developed compared to peers and a number of critical factors that have the potential to drive growth in the area such as technological disruption, mergers and acquisition, recapitalisation to underwrite big transactions in the industry have been identified as game changers for investors.
Also, ship owners are called upon to look into establishing a Protection and Indemnity Club (P&I). For intending investors, huge opportunities abound in the subsector.
Research and development:
The forecast stated that maritime industry is yet to leapfrog in the use of technology because the sector is still very much human-driven. A number of innovation and new technology approaches are taking place globally and even locally in the oil and gas sector.
Thus, investment opportunities exist in setting up training and research centres to scale up activities in the maritime sector.
Maritime Law and Law of the Sea experts:
Law relating to activities at sea is based primarily on Maritime Law and the Law of the Sea. Maritime law is the law of things, activities and events related with the sea.
Specifically, it deals with matters concerning sea going personnel, ships and other seagoing vessels, charter contracts and ocean transport, ship ownership and sales, maritime safety incidents at sea and marine insurance.
“The law of the sea on the other hand is the law of maritime space. It defines its zones as well as the rights and obligations of States in these zones, especially in regard to environmental protection and law and order at sea.
These maritime law experts are there to inform and advice, act on behalf of clients, draft legal documents where necessary.
Manpower and human capacity development:
The availability of manpower is crucial to development of Nigeria’s maritime and shipping sector.
Large opportunities exist in establishment, upgrading of facilities and management of maritime institutions. Nigeria as a country is making heavy investments in human capacity development in the maritime industry which implies an increase in local participation in shipping, especially shipping operations.
The forecast has it that there are on-going discussions and plans driven by government for Nigeria to re-float a national shipping fleet. “The implication of this development is that its crystallisation will see Nigerian flagged vessels trading with other countries of the world.
“As expected, this would come with the benefit of employment generation, sea-time for cadets and competitive cost of doing business. We need to train our the young generation to develop cross- disciplinary skills required in today’s world by providing professional development courses focusing on advanced maritime technologies, cyber security, maritime and port management, supply chain management, etc.
By AMAKA ANAGOR-EWUZIEFollow Us On Social Media