Maritime Entrepreneurship and Economic Development in Nigeria
CHAPTER ONE
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.
CHAPTER TWO
LITERATURE REVIEW
The Concept of Entrepreneurship
Entrepreneurship can be described as that process of creating value where non existed and thereby reducing the gap between the level of satisfaction men enjoy with their lives and where they desire to be. Entrepreneurship is a master key to economic growth and development and reduction of poverty in the poor countries of the world, as it is about an understanding of how forces within and outside the narrow economic system produce a dynamic in which creative ideas in builders of enterprise sometime with access to capital, to yield a quantum leap in value creation.
Entrepreneurship is about creating value that did not exist, which bridges the dissatisfaction gap that exist between where people are in their needs state and where they desire to be on the hierarchy of needs. Understanding the phenomenon that enterprise is essentially the soul of human material progress, and how it is impacted by policy choices, institutional arrangements, human capital availability and the dominant values (culture) which are shaped significantly by leadership, is really understanding why nations are poor.
Why is high value enterprise opportunity not so easily pursued by a lot of people who want to make a lot of money? Outcomes are so had to predict in ideas that lead to big discontinuous changes that advance value to the customer that many walk past the opportunity without seeing it. A good measure for value is, therefore, the amount of uncertainty in the possibilities of commercialization of the new enterprise that shifts satisfaction. It is the quantum of value creation that distinguishes the businessman from the entrepreneur. Nigeria is a country of many businessmen but few entrepreneurs.
Between the businessmen and the entrepreneurs is a continuum from risk at one end (the businessman) to uncertainty at the other end (the entrepreneur). The policy choice, institutional arrangement, etc. tend to indicate which end people locate. The question why are these few entrepreneurs in countries that need more of them so that discontinuous change that yield value innovations will come in quick enough bursts to alter the welfare profiles of a broad part of the population? To answer this requires a little exploration of the evidence how the West grew rich, how Asia catching up, and what role entrepreneurship has played in the diverging performance of these economies.
A reason for the growth of the West, which comes from sociology, and the values of society, is the ethic that supported hard work and innovations. In the case of South East Asia it is the emigrant economistic ethic. The emigrant population, not distracted by politics and competing sources of prestige, enhances his personal welfare very quickly and contributes to the economic growth of the society.
The entrepreneurial process: The discipline to actualize the entrepreneurial process thereby creating value where none existed, in a manner that would be sustained for a significant period of time is subject to the effect and trends in society. The process usually involves opportunity conception, commercialization of the venture and institutionalization of the ventures.
Opportunity conception involves visioning the world affected by the venture idea and constructing backwards, a sense of execution that will accomplish the envisioned. This visioning for the opportunity that creates value is driven by the entrepreneur’s view of identifying how change will take place and profiting from it. Peter Drucker put it this way in his book on innovation and entrepreneurship: “Entrepreneurs see change as the norm and as healthy. Usually they do not bring about the change themselves. But the entrepreneur always reaches for change, responds to it and exploits it as an opportunity.”
CHAPTER THREE
METHODOLOGY
Research Method
A research method or approach/design gives details on the most suitable methods of investigating the nature of the research or dissertation, instruments, the sampling plan and the types of data to be used (Chismall, 1981).
Furthermore, Chismall (1981) also posited that “a research method or design forms the framework of the entire research process.” Therefore, if it is a good method or design, it will thus ensure that the information obtained is important to the researcher’s problem and that the objectives and economic procedures in collecting it are all within limits.
In fact, research in itself is a means by which knotty problems are solved in our attempt to push back the frontiers of human ignorance. It simply is a systematic quest for undiscovered truth. In pursuit of this undiscovered truth, a researcher needs facts, published documents from primary source and secondary sources.
Justifications for the Approaches
It is of utmost importance that the researcher takes proper care of the sources of his data, knowing very well that it reflects on the final result of the work. And if the data is faulty certainly, the result will be faulty (Osuola, 1991).
Therefore, in carrying out this study, two kinds of data collection methods were employed. These are primary and secondary. The nature of each of these will be discussed briefly.
Primary Data:
This consists of original information from the specific purpose at hand (Fraund and Williams, 1989).
The answers given by respondents to the questionnaires administered will constitute one type of primary data. Personal observations will be another type of Primary data. Each of the primary data is discussed briefly as thus;
- Questionnaires: This serves as one of the major research instruments adopted by the researcher to retrieve information needed from the stakeholders. It has been expedient for the researcher to use questionnaire because of the large sample size and the type of data needed. The questionnaires contain multiple choice questions with possible answers which are designed to reflect different shades of opinions. Simple alternative questions having various options to be chosen from based on individual stake holder’s perspective. This helps achieve unbiased and immediate answers. Also, open-ended questions which allow respondents to express views more precisely were included.
- Observations: Some of the explanatory procedures are based on the researchers’ observations and his experiences, as he visited various places for on the spot assessment of events for onward inclusion into his findings.
Secondary Data:
The secondary data consist of information that already exists somewhere, having been collected for another purpose (Kotler, 1997).
It consists of published articles, textbooks, magazines, newspapers, project and materials on the related subject from the internet etc.
CHAPTER FOUR
DATA ANALYSIS AND INTERPRETATION
Introduction
In this chapter, primary data collected for this study from the questionnaires administered to the stakeholders in the maritime industry are presented. The analysis of the data and the testing of the hypothesis postulated for the study through the application of various statistical tools will also be presented.
Furthermore, in order to reduce the bulkiness of the data, the data presented and analyzed are those that are considered relevant to the problems, objectives and hypothesis of this dissertation.
SECTION A: Analysis of Biographic Data of Respondents
This section ‘A’ deals with the analysis of the data collected from the questionnaires. These include demography, background of the respondents, the various frequencies, tables on specific questions in the questionnaires and the test of the hypothesis regarding the relationship between the maritime Cabotage, the entrepreneur and the nation’s economy.
CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS
FINDINGS
Nigeria’s trade is dominated by foreign shipping companies. The trade is mainly import-oriented, except for crude oil, which accounts for over 90% of the export trade. The transportation of crude oil is largely carried out by foreign tankers as the terms of trade is on FOB basis.
The non-participation of indigenous shipping companies in the transportation of crude oil and LNG means a huge loss to the Nigerian economy, amounting to an aggregate of USD 10.5 billion in 5 years.
The vessel capacity of indigenous shipping companies is abysmally low with an average age distribution of 27 years. This places the Nigerian Shipping companies at a disadvantaged position in international competition.
There are enormous opportunities for indigenous participation in coastal and domestic trades which involve mainly the lifting of petroleum products from Nigerian oil terminals to West African countries and between Nigerian ports. There are also good opportunities for indigenous participation in offshore oil and gas vessel supply services.
The Nigerian inland waterways are grossly underdeveloped, though they represent viable investment opportunities. The Nigerian public sector cargo represents over 70 percent of the total cargo output at the Nigerian ports.
It has also been discovered that Cabotage has attracted new businesses to the maritime sector.
The stakeholders in the maritime sector are fully aware of the benefits of the Cabotage laws.
CONCLUSION
The Nigerian experience revealed much confusion for several reasons. Apart from getting involved in the turbulent politics of ocean-borne trade right from the start without grooming and nurturing local competence, first, it totally ignored the need to create a learning curve with the sheer absence of a Cabotage legislation. In seeking to implement the National Shipping Policy Act, the NMA left out the bulk of section 14 cargoes, in pursuit of section 9 cargoes. Added to the fact that its application of section 18 was reduced to bureaucratic procedure, private cargoes by the fact of ownership, size and numbers were quite cumbersome to identify, control and allocate. It also tended to affect usual commercial trade practice. Moreover, the shippers were left to pay a high transaction cost incidental to the measure for the support of indigenous shipping companies. Yet there was no remarkable growth. Rather, the decline and demise of conference lines made cargo allocation procedure unclear to understand and control.
However, the study noted that defective and distasteful as Cabotage regime might appear to others, the NMA and other stakeholders still have the statutory duty to assist the maritime development of Nigeria. To do this, it was seen that public sector cargo size in Nigeria could provide a firmer and justifiable ground for the commencement of a credible programme. A more efficient cargo support programme then should focus on the control and involvement of Nigerian shipping companies in the carriage of section 14 cargoes. Not only are these easier to identify and manage, the resistance to the approach is not also expected to be high.
RECOMMENDATIONS
A situation where government agencies are allowed to break laws and defeat policy goals should not be tolerated. In order to give meaning and seriousness to Caboatge laws and to the role of the NMA, the authority should immediately be made to pursue the following steps:
- The need to re-examine the organization’s structure to reflect its functional responsibilities as with other maritime regulatory agencies, instead of maintaining the existing bureaucracy induced organogram. Also, there is a need for a closer liaison between the NMA and major public sector cargo generators.
- The Minister is requested to delegate certain functions stated in the NSPA to the NMA. Such functions should include powers to establish regulations and procedures for government agencies to ensure that the NSPA legislation is implemented as intended by the National Assembly.
- In addition to the need to strengthen liaison and co-operation with major public cargo generators, the NMA should also maintain desks assigned to such major public cargo generators for the purpose of identifying programmes, projects and contracts captured within the framework of the NSPA. Also, a close watch should be maintained by the NMA to support and gain from trade delegations, bilateral agreements etc. The critical role of this unit is important in the assessment and implementation of the NSPA.
- A Maritime Business Development Unit should be established to determine the issue of availability of Nigerian ships and capability of indigenous operators whenever such matters arise from public cargo generators, shipping companies or other agencies. Similarly, this unit should provide guidance on the issue of what is responsible in freight rates etc.
- The NMA should acting on behalf of the minister, give effect to section 26 of the NSPA by effectively monitoring compliance of government agencies with section 14 of the NSPA. In the meantime, it should commerce work with consultants to work out modalities for identifying major public sector cargo, and past abuses. Following from the exercise, a notification of waiver under section 14 (4) should be sent to public sector cargo generators who have been in breach. A programme should then be worked out between the NMA and such bodies on how best to approach their respective shipping needs
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- Amiwero, Lucky (2000) (The President of National Council of Managing Directors of Licensed Customs Agents) Petitioned the President, Federal Republic of Nigeria.
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- Black’s Law Dictionary, 6th Edition P.202. Black’s Law Dictionary, 6th Edition, Ibid Black’s Law Dictionary, 6th Edition, Ibid Carson et al. (1990) As in Asoluka 2003; P.220
- Cf. Vessels to transport LNG to Puerto Rico Section 1120… (f) of Public Law 104-324, approved on 19th October, 1996).