A senior Advocate of Nigeria, Mr. Mike Igbokwe has called on the federal government to put the necessary structures in place to ensure the immediate disbursement of the Cabotage Vessel Financing fund (CVFF) and for proper monitoring of the disbursement and implementation of the provisions of the guidelines.
Igbokwe who made this call in his opening speech at the 2nd annual Nigeria Ship Finance Conference and Exhibition (NISFCOE) which held in Lagos yesterday further suggested that based on Section 23 of the NIMASA Act empowering it to join in the formation of companies and also to enter into partnership with other companies, INIMASA should join hands with the private sector in the formation of a maritime bank that would be charged specifically to provide funding for acquisition of ships and shipping infrastructure.
Aware of the fact that the Bank of Industry (BOI) was actually for the specific sector of the economy, giving loans to industries and the Infrastructure Bank PLC was also a bank that had been set up for specific viable projects, he advised the NIMASA to take the bull by the horns by capitalizing on the Section 23 of the Act establishing it to join hands with the private sector and set up this bank which he said should cater for the needs of only the maritime sector in Nigeria.
He however said that “It is one thing to provide finance to acquire ships, it is another thing for ships to be acquired but I tell you what, ship acquisition without cargo support is worthless. Without cargo, if you buy the best ship in this country because you have access to ship fund, you will not have money, no income, you won’t even be able to service it.
“So, it is also important that as we are talking about ship acquisition or financing ships, we should also remember that government should do everything within its power to ensure that there is cargo support. We have been hearing stories about discussions with NNPC for years over changing the trade terms from FOB to CIF, to enable indigenous shipowners to be place in a position to participate in the lifting of the Nigerian crude like it is done by all crude nations; Malaysia and the rest of them. But up till now, this has not been done.
“So, I call on the government to get this concluded as quickly as possible so that when the funds are available to the Nigerian shipowners to acquire ships and they acquire these ships, they will have sufficient cargo to carry on these ships and be in the position to sustain it and when we do this, you will see an increment in the growth of the Nigerian tonnage. It goes a long way because when it comes to IMO for instance; you are respected based on your tonnage. Like Liberia here has higher tonnage than Nigeria even though we are the most populous nation in Africa. So, this should be one of the ways of growing our tonnage”.
Speaking on the topic, “Financing the Structures for the Advancement of Shipping and Maritime Development”, the Executive Director, Finance and Administration, NIMASA, Mr. Bashir Yusuf Jamoh informed that the Minister of Transportation, Hon. Chibuike Rotimi Amaechi had set up a Ministerial Committee to facilitate the establishment of the Maritime Bank adding that the Committee has secured interim secretariat, manpower and related takeoff infrastructure.
He maintained that the Bank following the Nigerian experience must be private sector driven and must be modeled after the likes of the Bank of Industry, Bank of Agriculture and the Nigerian Export-Import Bank even as he advised that the bank should be devoid of political influence and undue government control.
The executive Director added that the proposed bank when established should support ship acquisition and fleet expansion through debt finance while providing financial facilities to support development and Cabotage Act.
He further pointed out that the bank should address the challenges of financing from the commercial banks as well as support the capital intensive nature of the industry while attracting local and foreign investors in the sector.
Earlier in his welcome address, the convener of the conference, Mrs. Ezinne Azunna stated that having seen all that the Nigerian shipowners labored for over the years taken away for lack of understanding and lack of fair play in the industry, banks saying no to the acquisition of ships, government expressing fears on the disbursement of fund and on the support of the shipowners, it became obvious that there was a lacuna thus prompting them to undertake this project.
While quoting a Senior Advocate of Nigeria, Dr. Olisa Agbakoba, Mrs. Azunna said, “The maritime sector in Nigeria is worth over N17 trillion and has the capacity to annually employ over 50,000 persons”, while enjoining the participants to do the arithmetic themselves and then know exactly what would happen if appropriate attention was paid to the sector.
“And so, this forum is to stimulate ideas, this forum is to look at policies, to examine them, to look at how it is being done here and to say, are we doing it right or are we not doing it right. This forum is to find those funding opportunities. I am meant to understand and I believe that there is fund for ship owning and maritime infrastructure financing all over the world. How do we access it as a nation? That is critical. We must answer that question at this occasion. What opportunities are there for us? We must address that”, she said.
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