Vessel Financing Fund and the Survival of Local Ship Owners/operators in Rivers State, Nigeria

Abstract

This study examined the relationship between vessel financing fund and the survival of local ship owners/operators in Rivers State. Vessel financing fund was used as the independent variable as well as the dimension. The variables used in this study to measure the survival of local ship owners/operators in Rivers State (dependent variable) included increase in employment by local ship operators and taxable revenue to government by local ship operators. The study population consisted of 35 indigenous ship operating companies in Rivers State. However, the study sampled 4 staff from each of the companies (140) and validly used 133 of the respondents (95%response rate) for the data analysis. The study used research instrument of questionnaire orientation to elicit information. The study adopted the descriptive and inferential statistical techniques in the assessment of the operational relationship between the variables and tested the six hypotheses with Pearson Product Moment Correlation Coefficient (r). The study found that NIMASA as regulatory authority declines to approve permits for foreign vessels; that shipping companies are not satisfied with the implementation of Nigerian Cabotage Act and NIMASA’s conduct, actions, decisions and policies do not meet the expectations of local ship owners/operators. The study found that there are duplications in vessel registration process with NIMASA. Most vessels that fly Nigerian flags, which is an indication of compliance to the regime still go for Temporary Importation permit with Nigerian Customs Services, which is a clear attestation that no customs duty is paid. From the test of the hypotheses in this study it is evident and conclusive that vessel financing fund has positive and significant relationship with increase in employment of local ship owners/operators and taxable revenue to government by local ship operators in River State. The study therefore, recommends that government should intensify its efforts by ensuring the approval of the proposal on a fiscal incentive programme to encourage indigenous participation in shipping, submitted by NIMASA. This will encourage more investment in shipping, enhance capacity building, lead to improved infrastructural facilities in the existing shipyards and enhance the opportunities of the indigenous operators to lift available cabotage cargoes, especially in the oil and gas industry.