Business Hilights
Tracking Nigeria's Headline Business News Online

Shipping dying in Nigeria due to poor access to funding for new vessels—Ogbeifun

National President of Ship Owners Association of Nigeria (SOAN), Mr. Greg Ogbeifun, has given insights on the reasons behind Nigeria’s failing fortunes in regional and global shipping competitiveness.

In an interview, he said the 14 years of non-disbursement of Cabotage vessel Financing Fund (CVFF), The Maritime Fund (TMF) and the predominant banks’ high interest rate on loans are forcing local shippers to scout for funding abroad.

Investigations have shown that the CVFF, drawn from two per cent contributions of shipowners, was established in 2004 with the aim of making funds available to operators, but no local ship owner can boost of accessing the facility.

Ogbeifun revealed that in the 14 years that CVFF had been in existence, no shipowner has been able to access it.

He argued that inability to access the facilities has put local shippers at a great disadvantage which has collapsed Nigeria’s competitiveness in maritime business even along the West coast of Africa.

In his further submission, SOAN President averred that “Today, you will find that there are no companies coming up to commission new ships. So, the country is dying in terms of shipping.

“The number of shipping companies from the time I took the mantle of leadership as the president of the Ship Owners Association of Nigeria to now has reduced by 42 per cent.

“The vessels are laid up; the banks have repossessed some of them. The owners cannot even dry-dock them; so, they pack them because of our financial challenges.”

Continuing, he argued that “Our financial system is not designed to support long term funding such as the type we experience in the shipping sector. And when you have to take such a facility, you are taking it at very unfavourable terms.”

Business Hilights gathered from the prevailing Nigerian Maritime and Safety Administration (NIMASA) Act, that it is the statutory duty of the agency to regularly assist indigenous shippers with facility from both the CVFF and TMF domiciled under its supervision.

In a press conference last year, the Director General of NIMASA, Dr. Dakuku Peterside, told the media that there are some issues that are being cleared to make way for the disbursement of the funds even as the Minister of Transportation, Mr. Rotimi Amaechi, in another interview, queried the presence of the funds in the first instance.

Observers find it hard to decipher any meaningful though from the combined comments of both NIMASA boss and the minister even as local shippers continue to wallow in funding crisis at a time the federal government is working on making Nigeria the Maritime hub of West Africa.