Impact Of The Cabotage Act On Local Capacity Development

In 2003 the cabotage law was enacted with provisions to empower local investors to take control of the domestic shipping trade and from it develop enough muscle to assume the right of place for Nigeria as a maritime nation in the movement of her import/export cargoes including crude oil to and from international markets. The implementation/enforcement of the provisions of the Act needs to be constantly monitored to ensure that the goals and objectives of the law are pursued with vigor and accomplished. Thus, the object of the study is to verify the alleged unabated dominance of the coastal services by foreign flag operators; the impact on the Cabotage Act 2003 on local capacity development in terms of tonnage, human resources and cargo support. The research made effort to highlight people"s views that are relevant to the study and this formed the literature review. The major instrument used for the study is a set of questionnaires served on a population of 55 industry stakeholders out of which 27 responded. The data obtained were statistically analysed with the chi-square model and pie chart for presentation as explanatory model. The findings of the study revealed factors hindering the achievement of the objectives of the Acts such as lack of funds, failure on the part of NIMASA to process the applications for the cabotage vessel finance fund loan for tonnage expansion; lack of commitment by NAPPIMS and PPMC to guarantee cargo support to indigenous operators; NIMASA lukewarm attitude in enforcing the provisions of the Act. The study also noted that most of the cabotage vessels operated by most indigenous shipping companies are below specified standards and are un- seaworthy. Also it was noted that there was a growing lack of seafarers particularly qualified and certified marine engineers and navigators to operate the few available cabotage vessels. The study recommended strategies to enhance indigenous participation and reduce the foreign dominance. For example, NMASA is urged to make the cabotage vessel finance Fund/loan facility accessible to local operators for fleet expansion and to make solid arrangements for cadet-ship sea-training to enhance proficiency and avoid importation of manpower. PPMC and NAPPIMS should guarantee long time charter of the fleet as a kind of incentive against idle moment. On the other hand local operators should try to present standard and seaworthy vessels for optimal cabotage operations and clean sea assurances.

The cabotage Act is designed to guarantee the participation of Nigerian citizens in its own domestic maritime trade. The objective of the law is based on the following:

1. To promote economic growth and national development;
2. The need for the nation to protect its coastal trade through shipping;
3. To stimulate and expose Nigeria"s indigenous shipping operators to shipping business in the coasts as a stepping stone to deep sea/international shipping;
4. Promote acquisition of shipping technology by creating and diversifying employment opportunities in the industry;
5. Improve environmental safety;
6. Enhancing indigenous maritime capacity by igniting the flame of education, training and employment of seafarers, ship operators and ship managers since the ships to be used in domestic shipping would be Nigerian-built and Nigerian-owned, crewed and operated;
7. Protection of the nation"s security interests;
8. Improve Balance of Payment;
9. Provide level ground for fair competition amongst the indigenous ship- owners and

Four years after the cabotage regime came into operation, the Indigenous Ship-owners Association of Nigeria, the umbrella Association of local shipping investors still complain bitterly that lack of enforcement of the law has encouraged unabatedly foreign domination of the coastal shipping trade and that they are worse off now than before by lack of cargo support for its members from NIMASA and NNPC.

• Maritime / Transport Project Topics and Materials