Hope rises for indigenous shipowners as BoI set to support asset financing

Abiola Seun |

Respite has come the way of local shipowners as the Bank of Industry (BoI) has expressed readiness to finance acquisition of maritime assets.

This was disclosed last week when the Managing Director of the Bank of Industry (BoI), Olukayode Pitan, paid a courtesy visit on the Director General of the Nigerian Maritime Administration and Safety Agency (NIMASA), Dr Dakuku Peterside at the Agency’s corporate headquarters in Lagos.

The repreive is coming after a long and hard struggle by the Nigerian Maritime Administration and Safety Agency (NIMASA) for a single digit interest facility to aid operators in the country’s maritime industry,

The credit facility is meant to help in the procurement of maritime assets to put operators in a position to compete favourably with their foreign counterparts.

Dakuku, who received the BoI delegation, said the meeting with NIMASA was a follow up to the Agency’s efforts to ensure that Nigerian players are competitive in the global maritime arena.

He said, “We have continuously sought partnerships that would grow our industry. We know that maritime asset financing is one of the major challenges of this industry and we are tackling it head-on. In no distant future our people would be able to reap the benefits of our strategy.”

Speaking during the visit, Pitan commended the NIMASA management led by Dakuku for its various transformative initiatives in the maritime sector. He said the initiatives had brought renewed confidence in the maritime industry and BoI was ready to partner with NIMASA because the viability of the sector would rub off on the entire economy.

The BoI managing director disclosed that it had an existing financing model in partnership with the Nigerian Content Development and Monitoring Board (NCDMB), which could also benefit the maritime sector if applied.

He stated, “We are proposing a partnership with NIMASA on vessel financing. We already have a similar partnership with NCDMB that is currently running at a single digit of 8%, with little or zero risk for NCDMB since the fund invested by NCDMB is guaranteed by BoI. This model, we think, can also benefit NIMASA and the entire maritime sector.”

At the end of the meeting, NIMASA and BoI agreed, among other things, to work out modalities on financing the acquisition of vessels at a single digit interest rate; provision of guarantee for the funds that NIMASA will entrust to BoI; and management of the portfolio to guarantee effectiveness.

It would be recalled that the management of NIMASA under Dakuku has consistently advocated a single digit interest rate on borrowings to assist in the acquisition of maritime assets.