- June 6, 2016
- Posted by: Fola Daniel Adelesi
- Category: Business, Nigeria
For the masquerade to dance in a melancholic atmosphere, the drummer knows that the job cannot be left to the stick and the drum. An extra reserve of energy must burst forth. A new rythm, especially an unfamiliar but very inspiring one must be presented. It must be presented in such a way that even the masquerade will not be able to tell where the energy to dance has come from.
At the moment, Nigeria is the melancholic atmosphere. The entrepreneurs and you my listerners are the masquerades. While I don’t really envy this task at the moment, the organisers of this event, the other speakers and myself are the drummers. The Rythm is coming from the maritime sector and I hope that at the end of today, you would have found yourself dancing or at least nodding your head and tapping your feet.
In dealing with the task ahead of me today, I will like to approach it with the 4 Ps of presentations which are 1. Position 2. Problems 3. Possibilities 4. Proposition. That way, my points can become succinct and hopefully spur more SMEs to get involved in maritime.
Position – It is worthy of note that today, the government is not in total control of the maritime industry. At least that is what it is on paper. I said that because when government still dictates what happens, the industry will never realize its full potential. As with many other government agencies, it would have continued to foot drag and barely survive. Fortunately, there are industry players who came on board when the government opened up the industry sometimes in 2006. Reports have it that the government was barely able to employ fourteen thousand people but when it open up the sector to private interests, there were more than forty eight thousand employees in less than six months. You should also remember that nearly eighty percent of the country’s import comes in through the water ways. Our exports take the same route and that means the country’s balance of trade is mainly determined by what happens in the maritime and not in Aso Rock.
The Lagos State government, especially under the leadership of former governor Babatunde Raji Fashola, worked assiduously to create opportunities and show the private investors what can be done and how. A case study is the water way from Ikorodu to Ikoyi or victoria island which became an alternative to traveling for three hours or more by road and losing crucial hours to road transportation. So we see that the opportunities are there and they can be maximised if we are looking in the right direction.
Problems – While there are problems in the industry that can discourage private interests and sometimes clip the wings of the government, the opportunities abound much more than the challenges you can ever for see. Nevertheless, the problems are there and we must face them. There are a number of problems to contend with and they include:
1. Turnover time for entrepreneurial ventures in maritime – we must admit that the maritime venture is capital intensive and must be well thought out before the first step is taken. After that thought out plan, one reality you must face is the fact that it takes a while to recoup some investments in maritime. That time frame, much more than the amount involved, is the big issue for a number of investors. They want businesses that have a shorter turn over time and can move on quickly.
2. Funding ~ The funding seems easier for the government than it is for the private interests. However, the government has not been able to do much because of several other interests hanging unto the government’s hands. Many newcomers into the industry are barely able to raise the needed funds to invest except for those diversifying their interests and businesses.
3. Risk ~ This is a high risk business on both human and capital goods. Anything can happen. Boats can capsize and there can be a ship wreck. Lives can be lost before any rescue effort is made. Goods worth several billions could also be lost. What forms a crucial part of the risk is human error or negligence. An example, for those who may have traveled from Ikorodu to the Island, is the experience of being stuck ‘somewhere in the middle of the sea.’ While I don’t intend to scare you, you will be shocked to realize that this happened because the boat operators ran out of fuel. This was also not in the period of fuel scarcity. So commuters and operators are on the sea until fuel comes from wherever and whoever is bringing it.
4. Oil bunkering ~ This was not an issue until the government decided to clamp down on those breaking pipelines just to get fuel and sell at ridiculous prices. The vandals use the water ways to commit their crimes. The security agents know this and have gone to many of those areas. Sadly, this has constituted threats to the maritime activities in those areas and the lives of those interested in doing one legitimate business or the other. When an under paid and a trigger happy or drunk officers are on duty, the results are better imagined than describe.
5.Claiming more land from the see ~ Today, we are happy about projects like the Eko Atlantic and several high rise buildings springing up with ocean view. We have forgotten that we are denying the sea its space and one day, maybe not too far from now, the sea will fight back. Even if the sea does not fight back, we are already limiting the opportunities and potentials for businesses in maritime.
Possibilities ~ Since my primary role is to discuss the role of SMEs in developing transport/maritime sector, I will consider some opportunities from the sector. This is so because opportunity is the language entrepreneurs understand.
1. Increase IGR of costal states – I believe that if the opportunities in maritime are fully explored, SMEs can actually help the governments of some costal states to increase their internally generated revenue. It will only be a matter of time that the states will no longer have to wait for federal allocation before it can do the needful.
2. Deconjest roads around towns – One major solution SMEs will be proffering, apart from creating jobs will be to take to the water ways close to half the people who spend so many unnecessary hours on the road. Only those who need to be on the road will be there and the hours lost to traffic will be reduced for everyone of us.
3. Move the content of heavy duty vehicles and reduce accidents on the roads.
4. Create a million jobs in a year – A full exploration of the maritime sector will unlock other unseen opportunities. As those opportunities are unlocked, other problems will be created and they will need solutions. The cycle will continue and more jobs will be created. That is why I believe it is very possible for the SMEs to create a million jobs in a year from the maritime sector and even double that figure within three to four years. This will greatly impact any economy in a recession.
5. Deploring ICT and social media ~ I am not just a strong cheer leader for ICT deployment into work places and in the development of the nation, it is proven that the introduction of ICT will pave way for efficient exploration of maritime potentials. The use of ICT will provide both maritime related and non maritime related jobs. ICT deployment will also help entrepreneurs whose goods are on sea track their locations and lower their blood pressure before the arrival of the goods.
Other possibilities as suggested by Rammads, M.A, Ph.D in a paper titled ‘The Contribution of Maritime Transport to National Economy’ include:
Areas of opportunities and job creation
1. Container repair and maintenance services
2. Tug operating services
3. Line handling vessels service
4. Dredging equipment services
5. Mooring services:
6. Single point mooring buoys
7. specialized piers for chemical or gases
8. ICT components/spare parts, repair/maintenance and back-up systems
9. Cargo handling equipment leasing for:
10. Empty container operations (handling/transfer)
11. Quay apron, transit shed and terminal operations
12. Fire fighting vessel services
13. Communications patrol services leasing
Proposition ~ I honestly think that we don’t really need to put a lecture in order to tell the private sector what needs to be done. They have several ideas and they can do much more than time will permit us to explore. So I will conclude with the following propositions:
1. Government funding or loans with very low interest rates should be used to encourage the SMEs in order to help in this melancholic times. This is not the time for the banks to ask for the intestine of your great grand father’s uncle’s brother in law.
2. Flexible and guaranteed insurance scheme for companies and their properties will be introduced. If a special insurance scheme needs to be developed for this, that should be done and the government with the insurance companies should rebuild the trust of people in insurance.
3. Creating opportunities or jobs in maritime transport will not be a problem but it has to come as cheap services to commuters. If you ask me, and maybe some other people who have hydrophobia, why we don’t patronise maritime transport, you may get answers like ‘why should I pay so much to die?’ I know people who used to board the ferry and have opted out because of cost. The value proposition of maritime transport investors should not only be the time they save for customers but the cost at which the services come. If the cost is not reasonable, the people will do away with the time you saved for them and go with the cheaper alternative.
4. I honestly think that the government needs to introduce a tax rebate for SMEs, especially those venturing into the blue ocean. At least, If I was made the president for one day, that’s what I will do rather allow tax payers money go through a bereucracy with no certainty of value returns to the people. I can always give a tax rebate to SMEs diversify and creating more jobs in maritime.
I sincerely hope that when we have the privilege to gather like this again, the opportunities discussed here would have been maximised and the government, as expected, would have created an enabling environment.
Thank you for listening.
Fola Daniel Adelesi
Edible Pen Group