Prohibitive customs duty has been identified as the reason why Nigeria has not been able to benefit from earnings in vessel registration.
Nigerian flagged ships are required to pay 15 per cent customs duty while the foreign flagged ones attract as little as one per cent.
“Customs duty for vessel importation are considered by the shipping business community as prohibitive. This is to the tune of 15 per cent of the total cost of a vessel. As a result of this, vessel owners, even when they are Nigerians prefer foreign registry and bring in their vessels under the Temporary Importation Permit which only demands one per cent of the total cost and is renewable every year,” the Executive Secretary, Nigerian Shippers’ Council, Mr Hassan Bello, said.
While presenting a paper on indigenous fleet development at the League of Maritime Editors’ 20th anniversary, Bello noted that Nigeria was losing out on the $380bn global annual freight earnings, owing to the fact that all Nigerian exports were shipped “Free on Board,” while its Imports were shipped ‘Cost Insurance Freight.’
Bello, who lamented the dominance of foreigners in the shipping sector, stated, “The oil rigs in Nigerian waters and the vessels which service them are owned and controlled by foreigners. Even the vessels involved in coastal trade and Inland Waterways covered by the Cabotage Act are mostly controlled by foreign Shipowners.”
Also, while speaking at a stakeholders’ meeting organised by the Alumni of Maritime Academy of Nigeria Oron, the President, Shipowners Association of Nigeria, Greg Ogbeifun, described the 15 per cent Customs duty on vessels imported into Nigeria as unfortunate, saying that the payment of higher import duty on vessels had put Nigerian shipowners at a very disadvantaged position and given foreigners an edge.