World Maritime University The Maritime Commons: Digital Repository of the World Maritime University World Maritime University Dissertations Dissertations 2011 The effects of cabotage regime on indigenous shipping in Nigeria Ganiyu Babatunde. Bello-Olowookere World Maritime University Follow this and additional works at: http://commons.wmu.se/all_dissertations Recommended Citation Bello-Olowookere, Ganiyu Babatunde., "The effects of cabotage regime on indigenous shipping in Nigeria" (2011). World Maritime University Dissertations. 176. http://commons.wmu.se/all_dissertations/176 This Dissertation is brought to you courtesy of Maritime Commons. Open Access items may be downloaded for non-commercial, fair use academic purposes. No items may be hosted on another server or web site without express written permission from the World Maritime University. For more information, please contact [email protected]. WORLD MARITIME UNIVERSITY Malmö, Sweden THE EFFECTS OF CABOTAGE REGIME ON INDIGENOUS SHIPPING IN NIGERIA By GANIYU BABATUNDE BELLO-OLOWOOKERE Nigeria A dissertation submitted to the World Maritime University in partial fulfilment of the requirements for the award of the degree of MASTER OF SCIENCE In MARITIME AFFAIRS (MARINE ENVIRONMENT AND OCEAN MANAGEMENT) 2011 ©Copyright Ganiyu B. Bello-Olowookere, 2011 DECLARATION I certify that all the material in this dissertation that is not my own work has been identified, and that no material is included for which a degree has previously been conferred on me. The contents of this dissertation reflect my own personal views, and are not necessarily endorsed by the University. Supervised by: Patrick Donner Associate Academic Dean World Maritime University Assessor: Maria Romero Assistant Professor World Maritime University Co-Assessor: John Liljedahl Consultant Danish Maritime Authority ii ACKNOWLEDGEMENT I wish to express my immense gratitude to all those who have made this programme a success with their support and assistance in various ways. First, I will like to express my profound appreciation to my dissertation supervisor, Professor Patrick Donner, for his invaluable assistance and useful advice in the course of writing the dissertation. My special thanks also go to the WMU faculty and staff, particularly, Professor Shuo Ma and Professor P. K. Mukherjee, for their broad knowledge and insightful lectures. I also thank Professor Olof Linden, my course Professor. I am most grateful to Mr. Raymond Temisan Omatseye, Former Director-General of the Nigerian Maritime Administration and Safety Agency and the entire management for giving me the opportunity to come for this programme. My thanks also go to Mr. Victor Onuzuruike, for his belief in me by nominating me for the course and ensuring that it was eventually approved, against all odds. I thank Mr. James Opaluwa, Mr. Jude Njoku, Mr. George Olobo, Mrs Adanma Ezedinma, Miss Hadiza Maina and others too numerous to mention for their contributions towards the successful completion of this dissertation. I am also grateful to all my colleagues in NIMASA for their support and assistance during the course of this programme. I will also like to thank my friends at WMU, especially, my fellow Nigerian students for their support and pleasant company during the hard times in Malmo. Last, but certainly not least, is my immense gratitude to my beloved family, comprising my wife, Bolanle and my children, Zainab and Kolade, for enduring so much during my sojourn in Malmo for this programme. Their understanding, despite the difficulty, gave me added impetus to overcome the odds. iii ABSTRACT Title of Dissertation: The Effects of Cabotage Regime on Indigenous Shipping in Nigeria. Degree: MSc The dissertation is a study of cabotage policy regime in Nigeria and how it has affected indigenous shipping operators since its enactment as an Act over eight years ago with so much promises and expectations from various stakeholders in the Nigerian shipping industry. Cabotage policy generally, is examined as a protectionist policy used in many countries to safeguard the local shipping industry against unfavourable competition with foreign companies, especially in the carriage of coastal cargoes within the country. The discussion thereafter narrows down to the cabotage policy in Nigeria, tracing various efforts of successive governments to bring about a policy that would cater for the interests of local shipping operators and enhance their participation in the carriage of sea-borne trade to and from Nigeria. The study also assesses the implementation of the cabotage policy. The challenges encountered and various efforts of government, aimed at overcoming those challenges and ensuring that the objectives of the Cabotage Act are attained, are also examined in the course of the study. The dissertation also analyses the effects of the policy on indigenous shipping development in the country, using questionnaires to gauge the opinions of stakeholders, as to the success of the policy. The various findings revealed that the policy has not met the expectations of the indigenous operators. However, the study concludes that the renewed efforts of government, especially NIMASA, if sustained, will change the situation for the better. It equally proffers recommendations towards the successful attainment of the objectives of the policy. KEYWORDS: Cabotage, Fund, Indigenous, Policy, Ship-building, Waiver. iv TABLE OF CONTENTS Declaration ii Acknowledgement iii Abstract iv Table of Contents v List of Tables viii List of Figures ix List of abbreviations x 1 INTRODUCTION ................................................................................................ 1 1.1 Background ................................................................................................... 1 1.2 Objectives of the study .................................................................................. 3 1.3 Scope of the study ......................................................................................... 4 1.4 Structure of the study .................................................................................... 4 2 CABOTAGE POLICY ......................................................................................... 5 2.1 Definition of Cabotage .................................................................................. 5 2.2 Protectionism in shipping .............................................................................. 6 2.2.1 Cabotage as a protectionist policy ......................................................... 7 2.3 Cabotage law ................................................................................................. 8 2.4 Types of cabotage policy .............................................................................. 8 2.4.1 Strict Cabotage Policy Regime. ............................................................. 8 2.4.2 Relaxed Cabotage Policy Regime. ......................................................... 9 3 CABOTAGE POLICY IN NIGERIA ................................................................ 13 3.1 Introduction ................................................................................................. 13 3.2 History of shipping in Nigeria..................................................................... 14 3.3 Evolution of the national shipping policy ................................................... 18 3.4 Shipping activities in Nigeria ...................................................................... 24 v 3.5 Cabotage Act 2003 ...................................................................................... 27 3.5.1 Background to the cabotage policy ...................................................... 27 3.5.2 Need for cabotage policy ..................................................................... 35 3.5.3 Potential benefits of cabotage .............................................................. 35 3.5.4 Coastal and Inland Shipping (Cabotage) Act, 2003 ............................ 38 3.6 Implementation and enforcement of the cabotage law ............................... 40 3.6.1 Nigerian Maritime Administration and Safety Agency Act, 2007 ...... 40 3.6.2 Nigerian Ports Authority ...................................................................... 43 3.6.3 Nigerian Shippers Council ................................................................... 44 3.6.4 The National Inland Waterways Authority (NIWA) ........................... 44 3.7 Enforcement of the cabotage law ................................................................ 45 3.8 Challenges of implementing the cabotage policy ....................................... 49 3.9 Government efforts to overcome the challenges ......................................... 54 4 METHODOLOGY ............................................................................................. 60 4.1 Introduction ................................................................................................. 60 4.2 Data Collection ............................................................................................ 60 4.3 Research instrument .................................................................................... 60 4.4 Sample and sampling technique .................................................................. 61 4.5 Mode of distribution .................................................................................... 62 4.6 Expected results .........................................................................................