A proposed revenue-sharing agreement between the Nigerian Maritime Administration and Safety Agency (NIMASA) and a private firm, Royal Diadem Consults Ltd, has sparked internal concerns over its financial and operational implications.
The agreement, currently awaiting approval from the Federal Executive Council (FEC), would see Royal Diadem Consults receive 13.5% of NIMASA’s total revenue over a 15-year period.
In exchange, the company has proposed to invest N7.54 billion in developing a Maritime Electronic Management System (MEMS), an integrated digital platform aimed at enhancing the agency’s efficiency, transparency, and regulatory compliance.
According to the proposal, 75% of the funding will come as a loan, while 25% will be equity.
Automation and digitisation
Royal Diadem projects that the MEMS initiative will significantly boost operational efficiency through automation and digitisation in areas such as:
- Registration and certification
- Waste management and pollution control
- Cabotage and terminal operations
- Seafarer and incident management
- Maritime security and vessel surveillance
- Stakeholder engagement
The firm also claims the platform will drive a 30% revenue increase within three years, achieve 95% regulatory compliance, create 1,000 jobs, and reduce maritime pollution by 20%.
Staff and experts fault the proposal cost
However, NIMASA staff and maritime experts are pushing back. They argue that the proposed investment is too small to justify handing over a significant portion of the agency’s revenue for such a long period.
- They also question the lack of transparency in the proposal’s approval process.
- According to NIMASA’s 2022 annual report, the agency generated N129 billion in revenue. At 13.5%, the private firm would receive over N17.4 billion annually and about N261 billion over 15 years, a return of more than 3,380% of its original investment.
- Given that most of NIMASA’s revenue is collected in U.S. dollars, the actual figures could be much higher.
- In 2022, the agency earned $296 million and N3.4 billion, which at today’s rates could amount to N497 billion in total.
- This means Royal Diadem could earn an estimated N67 billion annually, recovering its investment nine times over in the first year alone.
“Glorified ERP” with no risk-sharing
Internal memos and messages from NIMASA employees suggest deep skepticism. One staff member described the project as a “glorified Electronic Resource Planning system,” adding that its functions could be managed with standard licensing and support contracts, not a 15-year revenue-sharing agreement.
“There’s no performance benchmark. Even if revenue stays the same, they’re entitled to 13.5% year after year. That’s a massive long-term payout for a system that carries no operational risk or enforcement responsibilities,” one employee said.
An experienced staff member, who has worked on major NIMASA projects like the Deep Blue Project and ERP implementation, questioned the decision to outsource such a project.
“The Agency paid for the Deep Blue Project and Sage X3 ERP system from its own revenues, those were far more capital-intensive. Why can’t we do the same for this MEMS?” he asked.
He also noted the absence of any enforcement or surveillance infrastructure in the proposal, saying that the project lacks the backbone to deliver the outcomes it promises.
Lack of transparency in the approval process
Several staff members expressed concerns over the review and approval process, alleging that the proposal bypassed key operational departments.
“To the surprise of most staff, there was no inter-departmental review committee. A proper cross-functional evaluation would have flagged many of the issues we’re seeing now,” said one employee.
Another long-serving staff member called the project “a financial Trojan horse” designed to drain NIMASA’s resources without delivering real value.
“With only N7.5 billion being spent, no investment in surveillance or enforcement assets, and no operational risk-sharing, the deal looks suspicious. It’s as though someone is trying to sneak through a concession deal under the radar,” he added.
NIMASA debunks claims
However, NIMASA, in a statement reacting to the allegations by its staff, said “there is no iota of truth in these claims”.
“To set the records straight, following a comprehensive internal review of operational systems, the current leadership of NIMASA resolved to embrace technology as a means of enhancing the Agency’s capacity to deliver on its regulatory mandate more effectively and to bring into the coffers of government additional revenue ensure funds due government does not end up in private hands.
“A pivotal innovation in this regard is the Maritime Enhanced Monitoring System (MEMS). This system brings digital traceability to the core of Nigeria’s maritime operations.
“MEMS provides real-time visibility into vessel movements, operational logs, and regulatory interactions. Through automated alerts, smart invoicing, and centralized data integration, NIMASA can now detect, document, and respond to maritime activities with greater precision and efficiency, eliminating unnecessary bottlenecks while strengthening compliance,” the Agency stated.
NIMASA added that with MEMS, each waste offload can be logged, time-stamped, and automatically billed, converting previously missed opportunities into a consistent revenue stream while ensuring environmental standards are met.
However, the Agency’s statement fails to address the costs and revenue issues raised by the concerned staff.
