How high cost of operations is forcing Trawler owners to abandon Nigeria

Indigenous trawler owners are joining the list of companies exiting the Nigeria’s shore over high cost of operations.

It was gathered that most of those leaving Nigeria waters are headed to neighbouring countries such as Gabon, Republic of Benin, Cameroon among others.

They cited high cost of purchasing Automotive Gas Oil ,AGO, for their vessel which has risen from N30 million to N140 million monthly.

Fishing trawler is a commercial fishing vessel designed to operate fishing trawls. Trawls are fishing nets that are pulled along the bottom of the sea or in midwater at a specified depth to fetch fish.

LEADERSHIP reports that most trawlers are currently rotting away as over 40 percent are currently grounded, thereby, reducing indigenous capacity in the sector.

The Chief Executive Officer, N&N Marine Services Limited Company, Engr. Emma Nnyamah, confirmed that some trawler owners have started abandoning Nigeria for Benin Republic, Cameroon and Gabon due to high energy cost, cost of spare parts and naira devaluation.

According to him, trawlers remaining in Nigeria are currently docked at different terminals idling away due to high cost of operation.

He argued that aside from diesel cost, they should be given a waiver on importation of spare parts for their trawlers into the country.

“If we go to these countries, they have a Bureau for better business, in Nigeria we don’t have that and when they fish there they earn in CFA and when they come back here, the money has more value than the naira.

“So, majorly, because of the exchange rate, that’s why those people go to other countries. Not because they have a better quality shore, our prawns and shrimps are of better quality in Nigeria,”

“Currently, trawlers in the country are at dock, because of the high cost of diesel oil and Spare parts. Diesel in the sense that the price moved from N500 to N1,200 per litre, thereby, making it practically impossible for people to continue the business. For instance, you need at least 100,000litres to have a successful 45 day trip. And with that amount of diesel litres, a trawler owner needs N130 million on diesel alone.

“Spare parts, payment of the crew, feeding and lots more. Another instance is that the major maintenance to dry docking of vessels after 16 to 18 months has gone up from N4 million to between N10 million to N13 million.

“The type of increase in the industry is frightening and the cost of these vessels is now between $1.5 million to $2 million so if you do not plan well you will run at a super loss. So, the best thing for most operators is to plan for the next move and currently, some owners are beginning to go to Benin republic, Cameroon and Gabon. These are the three countries trawler owners are willing to go to.”

Engr. Nnyamah, however, called for a subsidy from the government on diesel in order to alleviate the high cost that has depleted the industry.

“If we are able to have some form of subsidy on diesel like we used to have during the administration of ex-president Olusegun Obasanjo, there would be relief. From export alone, we would make huge foreign exchange from our export. We would recover ,once we have diesel that would enable the number of fishing vessels we have today Nigeria to go to sea and fish properly,we would return back to the quantity of export Nigeria had and from there, we would generate enough foreign exchange.

Also speaking, the president Nigerian Trawler Owners Association ,NITOA, Mrs Ben Okonkwo, said having subsidised AGO would save the sector from collapse.

Okonkwo, however, confirmed that the hike in the cost of diesel has increased the cost of voyage from N30 million to N140 million.

She lamented that trawler owners may be forced to downsize as 40 percent of fishing vessels are now down and no longer operating.

“Due to the high cost of AGO, over 40 percent of our vessels are down, and when we have vessels down, there is an extent we go in paying our staff, it would get to a stage that if they are not productive, we would have to disengage them.

“But, if we can get some logistics arrangements from NNPC and Dangote, it would go a long way,” she stated.

Okonkwo also sought for her members, duty waivers on importation of fishing vessels and fishing gears which according to her, are not being manufactured up to standard in Nigeria.

The operators also demanded for tax waivers, which according to her was in existence before in the form of export expansion grants, but stopped in 2017.

“These grants were designed by the government to cushion the effect of some of the challenges we are having now. If it can come back more regular and transparent, it would go a long way.

“We need dedicated port facilities, especially for new investors. We cannot continue to have our facilities in a place where you are not sure of tomorrow. Presently, we are not having long leases, we have short ones, what that means is that they can ask us to leave at any time. With the level of investment on the ground, it would be difficult to move us just like that. They should consider the companies and the space they occupy and go across for new investment.

“On Cabotage, what we do, we are not supposed to be captured in the Cabotage Act, but currently we are there. Years ago, we got an administrative waiver, and we went to the House of Representatives to defend why we should not be in the Cabotage but till today we have not heard anything. Fishing trawlers should be expunged from the Cabotage regime because we don’t have any contracts. We do fishing, which is agriculture, putting us in Cabotage will do more harm than good.

“If we get support, we can go back to the status quo of 250 boats and 200,000 employment like we had in the past.