Nigerian Shipowners seek maritime bank for fleet refinancing

ABIOLA Seun

Nigerian shipowners have called for the creation of maritime bank for special funding for acquisition of maritime assets.

This call was made by the Chairman, Shipowners Forum, Barr Margaret Orakwusi in a chat with Nigerianmaritime360.com in Lagos.

Orakwusi confirmed the depletion of ship owners’ fleet in recent years and only special bank with low interest rate can stop the dearth of shipowners.

According to her, while some ships owned by Nigerians are abandoned, others have gone under water because of inability to access fund.

She said, “Just take a trip down the jetties, it’s like a death yards for ships. Also, to access fund in our country is very hard. For instance, while we get a loan at 15 percent, shipowners in other countries are getting at two percent, how do Nigerian shipowners compete with such a person, it is not possible and that is what is responsible for what we are seeing.”

Orakwusi also advocated for creation of special maritime bank that would help fund acquisition of maritime assets.

She opined that the creation of special bank will help indigenous shipowners compete favourably well as funds will be acquired at a competitive interest rate.

“Also, we don’t have a bank that is dedicated to serving the industry because acquisition of ship is a long term project so we can’t ask commercial banks to finance such projects.

“Commercial banks have a board and investors so they are driven by profits. They want to maximise their profit so, we have been saying there should be a special funding and a special bank that will be dedicated to serving the shipping and maritime sector as a whole and taking to cognisance that the life span of a vessel is about 40 to 60 years, you don’t give such investment 5 year loan period and you charge 20 to 25 percent interest so how do we cope.”

“Also, most businesses in maritime have competitors in international market so how do you compete with other shipping companies of the world.”

She also identified high cost of insurance, astronomical levies and charges by government as albatross to indigenous shipowners.

“Let’s talk about astronomical charges in levies and we add to security issues. The safety issues, high cost of insurance, everything is working against indigenous shipowners. They said we have Cabotage law, how about implementation? You just need to charter helicopter and take an aerial view of our coastal water to see mostly foreign vessels on our coastal water. What are they doing their? How do we enforce that? So there are so many things that are wrong and I think we should start addressing them.”

Also speaking, the President, Shipowners Association of Nigeria (SOAN), Greg Ogbeifun corroborated Orakwusi about depleting fleets of local shipowners.

On his own part, Ogbeifun warned that the local shipping industry may go into extinction if necessary actions are not taken to salvage the industry.

He said for the past three years as the president of the association, the size of fleet of ships owned by its members has reduced by 42%.

“Today as one of the ship owners in the country, as the president of the association, three years as the president, the size of the fleet of ships by our members have reduced by 42%. So we are gradually going into extinction and we are not doing anything about it.”

On the challenges facing shipowners, Ogbeifun canvassed for an enabling environment for indigenous shipowners.

“Our challenges in the industry are very obvious, enabling business environment, funding is a particular issue. The ship owners would have loved to see this country participating in global and international trade and this cannot happen if government policies are not implemented,” he stated.