Operators are pushing for the establishment of a maritime bank to address their funding needs, The Nation has learnt.
The establishment of such a bank, they argued, have become imperative because only few banks have responded to their appeals for maritime desks to address their needs.
According to Association of Nigerian Licensed Customs Agents (ANLCA) President Prince Olayiwola Shittu, more than 10 years after the passage of the Cabotage Act, the maritime sector is still faced with paucity of funds.
Shittu called on Transportation Minister Rotimi Amaechi and Nigerian Maritime Administration and Safety Agency (NIMASA) Director-General Dr. Dakuku Peterside to facilitate the establishment of the bank.
“In Britain and the United States, they have maritime development banks that give out money to the industry at almost two per cent interest rate. But contrary to what is obtainable in those countries, in Nigeria, you have banks giving loans at interest rates of between 16 and 20 per cent per annum,” he said, adding: “Nigerian banks must forgo short-term profits and support long-term maritime projects.”
Banks, Shittu said, must take long-term view of funding projects and recognise the value that sustained investment will have on the sector.
Also, Gas and Maritime System Managing Director Mr Adeola Osinusi said the establishment of the bank would eliminate the funding problems in ports development and operations, ship building and acquisition, ship repairs, marine safety and environmental protection, among others.
Osinusi said the reason Nigeria could not compete in the supply of shipping services in the ports and in multi-modal transport services in the sub-region had yet to be addressed.
He said despite the consolidation of banks, they were yet to appreciate the maritime sector’s peculiarity and adequately support its funding.
“It is still difficult for some shipping companies to get the required financial support from banks and other sectors. If we look at the maritime sector and we take into consideration the number of seaborne business carried out in the country, the level of activities in the shipping industry should be a hub for the sub region. But one of the major problems facing the maritime sector is that banks in the country are shortsighted in the area of financing as they are more interested in short term financing and quick turnover.
“This is affecting the shipping industry because you cannot buy a vessel in January and be expected to pay back in December. A vessel is an asset which is going to be there for between 20 and 30 years, so financing for purchasing a vessel should be long term.
“Apart from that, in Nigeria, you have banks giving an interest rate of 16 to 20 per cent per annum and by the time you do 10 years repayment, you would have paid 150 per cent of the amount you borrowed which translates to more than double the amount borrowed.
“By the time you finish paying, you would have paid more than 200 per cent and above. It is just because these people know the life span of a vessel. So even if we as a nation go into shipping development, we still need the people to borrow, but the major problem is that people don’t have the ability to source the money required for them to fund the acquisition of vessels,” he said.
But The Nation gathered that some banks, such as, Skye, Fidelity, Stanbic IBTC and Diamond have been supporting the maritime sector.
Statistics showed that the banks are responsible for about 50 to 60 per cent of the new ships acquired by some firms in the last few years.
A senior Skye Bank official, who does not want her name in print, told The Nation that the bank had partnered the US Ex-iM Bank and other foreign institutions to finance some maritime of projects.
Such projects, she said, included financing the acquisition of the first Nigerian vessel to sail under the Nigerian flag from the US and provision of finance for acquisition and upgrade of National Clearing and Forwarding Agency.