Recession may depress maritime financing in Nigeria

By Foster Obi

While the federal government shops for investors into Nigeria, analysts have suggested that the government should throw its searchlight in the maritime sector with a view to creating the enabling environment for investors to thrive. They believe that this is one sector that has the capacity to take over from oil as a revenue earner.

To finance investment in the sector as a way of boosting participation stakeholders and investment experts have severally suggested that hosting the proposed regional maritime bank by Nigeria will give the country greater advantage to develop the sector

The Nigerian Shipowners Association had advised that the Cabotage Vessel Finance Fund (CVFF) which remained a subject of controversy for years should be used to power the regional maritime bank for effective management.

According to the organisation, rather than allow the local banks disburse the money, it should be used as seed money in the regional maritime bank, which should serve as the Federal Government’s share in the bank because a maritime bank is more competent, better qualified to deal with maritime issues than commercial banks because of their diversity.

But Chairman of Shipping Association of Nigeria, Mr. Val Osifo, doubts if hosting a regional maritime Bank should be one of Nigeria’s priorities for now, especially in view of the current economic crisis.

He noted that countries in the region will be looking up to Nigeria to finance the bank.  However, as good investment boosting opportunity, Usifoh said the government must put certain things in place.

He noted that for Nigeria to benefit from such investment there would be need to implement the local shipping policy properly as a way of reviving the economy that is highly depressed.

“We will need to implement the Cabotage policy properly for indigenous shipping operators to have full rights and access to coastal cargoes,” he explained. “If that happens, its multiplier effect will be seen in areas of employment generation, expansion in capacity by shipping companies and tonnage. The country will become a hub of maritime activities, as they continue to expand in shipping capacity. If we don’t do that, and we set up maritime bank, any expectation from such investment will be futuristic.”

“Maritime nations in the sub-region are currently competing for cargoes, hence the increase in the draft of their port channels to accommodate larger vessels. If, as they are doing so, Nigeria remains where it is, it will not be able to cope with competition and they will begin to transship cargoes to Nigeria from their ports,” he declared

President, Association of Nigerian Licensed Customs Agents (ANLCA), Prince Olanrewaju Shittu, said Nigeria may no longer be able to provide the needed fund for such a regional project because of the current economic crisis.

“The idea of a regional bank is good, but if it is going to be multinational in nature, what is the capital base and what is the shares structure like. If it is going to drain the little resources we have now, it will not work. Maritime operators will benefit from it because of the access to loan for ship acquisition and others, but Nigeria may not be able to carry it on its shoulder because she will end up to be the greatest financier of the bank,” he declared.

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