CHAPTER ONE

INTRODUCTION

Background to the Study

Cabotage is a legislative tool restricting access or reserving maritime or aviation trade within a country’s territorial jurisdiction to the local capacities. The Nigerian Maritime and Cabotage was introduced by the Nigerian Government following calls by prominent maritime specialists and operators on the need for government to make concerned effort towards harnessing the indigenous maritime capacity and utilizing the abundant opportunities in the sector for the benefit of the Nigerian people in order to reverse the trend where it still has its maritime trade both territorial and extra territorial dominated by foreign operators.

The government’s intention in introducing the cabotage regime is to encourage the development of the maritime industry by an interventionist scheme aimed at boosting the growth of the local capacity in the face of choking external competition and domination.

Cabotage is a practice worldwide that is over 60 years old, a contemporary economic approach which justifies intervention of this nature to induce some determined result (as against the classical economic approach of free market forces), as an acceptable tool to achieving some set economic goals, especially where competition is unfair and dominance is prevalent. It has been observed that this practice worldwide both in maritime and aviation has been induced by diverse factors including reserving all, or part of the national market opportunity to national flag ships or aircrafts either for political, economic or security reasons. Other reasons for this protective policy practiced around the world are to develop indigenous human and capital capacity. These are some of the major aims of the Nigerian maritime cabotage.

And as for the scope of the cabotage Act, the Coastal and Inland Shipping (cabotage) Act, 2003 covers the carriage of goods and passengers by vessels and any other mode of transportation, mineral, other natural resources, and any marine transportation or activity of commercial nature within Nigeria’s territorial waters as prescribed by the Exclusive Economic Zone Act CAP 116, laws of the Federation Republic of Nigeria, 1990. The Act seeks to restrict the use of foreign vessels in domestic coastal trade and consequently enhance the development of indigenous tonnage.

It is now two and half years since the enactment or one and half years of implementation of the cabotage policy. Nigerian’s are yet to notice significant change. The cabotage trade is still dominated by foreigners. From the perspective of the target group i.e. Nigerian Shipping Companies, the question remains: to what extent has cabotage delivered its intended opportunities? Considering that out of 320 or more private members’ bills introduced in the House of Representatives between 1999 and 2003, only ten crossed the Legislative Rubicon to become laws: why is it that the same forces have not succeeded in ensuring a mere robust and determined implementation of the cabotage policy? What factors are responsible for the very slow take-off of the programme? What are the problems? Are they associated with the very nature of the politics of shipping development, the process or policy, or a combination of these forces? What are the impacts of the cabotage laws or of what benefit is the cabotage to the Nigerian entrepreneur? These and more are some of the issues to be analyzed by the researcher in the course of writing the dissertation.

Statement of Problem

A maritime cabotage law is a legislation empowering navigation and trading within a country’s coasts or from port to port within a nation to be reserved exclusively for and carried on by its national flagships and nationals. It is purely for the regulation of domestic shipping. In this regard, it includes navigation and trading in the nation’s inland waterways. The maritime cabotage law may be in a single shipping legislation, or in a combination of two or more shipping legislation of a country.

There is another type of maritime cabotage which is often referred to as short sea shipping or regional shipping which is concerned with the transportation of goods and or passengers between ports of a given group of countries within a specific economic groupings (eg Mercosur, and the EU) by way of coastal ships, ferry services and/or port services such as tugs, dredges, maintenance and repair of craft, pilotage launches, bunkering and supply of vessels etc. Cabotage policies are applied in such regions or sub-regions, instead of an individual country, and as a result of inter-governmental agreements in order to favour local or regional employment and to control regional and /or sub-regional coastal trade (Maritime Resources Development Issues and Challenges; 2003, P.70).

This dissertation is aimed at having a comprehensive report which critically examines the issues concerning cabotage services, as regards to its impact on the Nigerian entrepreneurial opportunities for growth. Are there any benefits accruable to the Nigerian economy from the Nigerian Maritime cabotage? What are those benefits and how do they help in boosting the Nigerian entrepreneurs? These findings and more will be revealed and recommendations thereto, made, in order to enhance the formulation of sound scientific and economic solutions to issues and policies in these areas. The research work is expected to assist the NMA, the entrepreneurs, and other governmental agencies and other stakeholders in carrying out their statutory functions including its promotional and regulatory roles and measures, designed to facilitate the development stance and the growth of the nation’s maritime industry.

Objectives of the Study

The broad objective of this research work is to study maritime entrepreneurship and economic development in Nigeria. The following specific objectives guide the research:

To identify the Nigerian maritime cabotage as it exists under the Nigerian Maritime Authority (NMA).

To identify the various opportunities accrued to the Nigeria entrepreneurs from the cabotage in the maritime industry.

To identify the prevailing problems that hampers the economic viability of the maritime industry services in Nigeria.

To identify the impediments of the Nigeria entrepreneur in regards to the cabotage business.

To proffer solutions to Nigeria entrepreneurs in relationship to their problems in the Maritime business.

Significance of Study

The findings of this dissertation will likely set in motion further research studies into the Nigerian maritime cabotage and its impact on the nation’s economy and /or as an interventionist in the boosting of the Nigerian entrepreneurial activities. In fact, it is expected that with the passage of the cabotage Act by the National Assembly, a new world of opportunities for business ventures in the maritime cabotage sector have emerged. As the backbone of entrepreneurial set up, new opportunities are always being sought, discovered, grasped and acted upon to the benefit of the consumer and the entrepreneur. To this end, the maritime experts, regulators and entrepreneurs alike, have to rob minds together to provide insights into how to utilize the opportunities in the maritime industry. The potential entrants into the maritime business should see these as good business opportunities to be utilized in order to create job opportunities, training for seafarers, provision of / building of ships and other ocean going vessels to be used, which will have to bear on the nation’s economy and to improve the well-being of the Nigerian entrepreneur. It is also believed that the study will stimulate and provide the needed impetus into the economic growth of the nation’s maritime industry, hence the standard of living in general.

Research Questions

The following research questions were formulated from the objectives to guide the study;

What is the Nigerian maritime cabotage as it exists under the Nigerian Maritime Authority (NMA)?

What are the various opportunities accrued to the Nigeria entrepreneurs from the cabotage in the maritime industry?

What are the prevailing problems that hamper the economic viability of the maritime industry services in Nigeria?

What are the impediments to Nigerian entrepreneur in regards to the maritime cabotage business?

What solutions can be proffered to Nigeria entrepreneurs in relationship to their problems in the Maritime business?

Scope of the Study

The scope of this research study will be limited to the impact of Nigeria maritime cabotage on the nation’s economy as well as on entrepreneurial opportunities for economic development in Nigeria. This dissertation may be limited to maritime cabotage, which is also known as domestic waterborne transportation. The researcher also wishes to reiterate here that, there is limitation in the area of data collection, some useful data required are treated as confidential and permission has to be sought before they are released. Even the parties for oral interviews, permission has to be sought before interviews were granted. Time factor is another noticeable constraint.

However, it might be noted that frantic efforts were made to ensure that useful information were eventually collected to enhance an objective conclusion of this study.

Operational Definition of Terms

Maritime: connected with the sea, especially in relation to seaborne trade or naval matters.

Entrepreneurship: Entrepreneurship is the process of designing, launching and running a new business, which is often initially a small business. The people who create these businesses are called entrepreneurs.

Maritime Entrepreneurship: refers to promoted innovative business concepts related to the maritime economy and the values of sustainable entrepreneurship contributing thus to the improvement of entrepreneurial mentality with socio-economic benefits and the enhancement of business activity.

Economic Development: is the growth of the standard of living of a nation’s people from a low-income (poor) country to a high-income (rich) economy. When the local quality of life is improved, there is more economic development. When social scientists study economic development, they look at a lot of things.

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