Here’s another reason Nigeria is losing billions of dollars annually

Here’s another reason Nigeria is losing billions of dollars annually ©provided by Business Insider Africa

A new report indicates that Nigeria is losing $9.2 billion every year via its oil industry. Maritime experts revealed that the West African country is losing money to foreign businesses that can potentially be rerouted domestically. This new report highlights one of and not the only avenues Nigeria has been losing money in its oil and gas industry.

・Nigeria hemorrhages $9.2 billion yearly in oil revenue to foreign shipping firms.

・Former official urges private sector to bolster national fleet, citing economic implications.

・Pipeline vandalism adds to woes, with $34.47 billion spent in 18 months on repairs.

A report by the Nigerian newspaperThe Punch showed that Nigeria is losing $9.2 billion to foreign shipping companies that transport goods that a national fleet ought to manage.

Hassan Bello, a former Chairman of the National Fleet Implementation Committee, made it known during the inauguration of the new executives of the Shipowners Association of Nigeria in Lagos, that the private sector could step in this regard.

“$9.2bn lost annually to foreigners. This is trade that goes to foreign-owned shipping companies or carriers. You could imagine what that could do to our economy if we had a national fleet. The national fleet should be an initiative of the private sector but the government should encourage it,” he said.

“You know the significance of having indigenous participation in international trade. 90 percent of international trade is done through the sea, carried by ships from one country to another. And we have been missing in action, that’s the whole problem. We need to be elusive, unequivocal, and deliberate in our efforts. And that is why it is important for this association. We will see it as one of the efforts to take us out of the dungeons,” he added.

The Nigerian Shippers Council’s former executive secretary complained about the country’s mono-economy, which is entirely reliant on the export of crude oil.

“We have to own and operate indigenous tonnage, purely private sector driven by providing incentives that are the function of a government, friendly operating climate, like tax holidays, and a wide range of very important incentives, which other countries have used. We have no time to do that. We are talking about tax holidays. We are talking about fiscal policies, legal, and the policy changes,” he stated.

Unfortunately, this is not the only source of revenue loss in the country’s oil sector. In September last year, it was reported that the Nigerian National Petroleum Company Limited spent over N34.47 billion (18 months) monitoring and repairing pipes to solve the country’s ongoing pipeline vandalism problem.

An Oil and Gas Report from the Nigerian Extractive Industries Transparency Initiative, covering 2021, stated that N22.05 billion was spent on pipeline upkeep and repairs.

In the first half of 2021, 350 pipeline points were vandalized, according to the NNPCL. According to the organization, it has continuously sought, in collaboration with the neighborhood and other stakeholders, to decrease the threat posed by pipeline vandalism.