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Amaechi: Transport Sector’s 1.41% Contribution to GDP Unacceptable

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… As 24 Stockbroking Firms Fail SEC’s Test over Capital inadequacy

The Minister of Transport, Mr. Rotimi Amaechi, has said 1.41 per cent aggregate contribution of the sector to Nigeria’s Gross Domestic Product (GDP) is unacceptable.

He admitted however that the maritime sector’s contribution could be appreciable but its potential had been  largely untapped.

Transportation sector, the minister stated, plays such a paramount role in the country’s development that there is an urgent need to exploit the opportunities that abound within the sector to improve its contribution to the national economy.

He said: “Countries like South Korea and Singapore have built their economies around a vibrant transportation sector. Although Nigeria is blessed with multiple modes of transportation that is the envy of many, these potential have largely remained untapped.

“Our air transport and railways sub-sectors hold the key to unlocking the vast potential in our cities and rural areas. The President Muhammadu Buhari administration is determined to fully exploit the potentials in the transportation sector.”

In a statement signed by the Deputy Director, Public Affairs of the ministry, Mrs. Yetunde Oshonaike, while quoting the minister, said: “The government of President Buhari is in the process of developing a national transportation master-plan that will be implemented as a fulfillment one of his campaign promises to diversify the national economy while improving non-oil sector revenues.

“As a first step, the government will pursue the enactment of legislation that will open up the sector to new investments that will lead to economic prosperity.

“Among the bills that is ready for legislative action is the National Transport Commission Bill – an act to provide for the establishment of a National Transport Commission as an independent multi-modal economic regulator and other related matters. He said the bill among others have been approved by the Federal Executive Council (FEC) in March 2014.”

Beside the country’s huge population putting enormous pressure on a very poor transport infrastructure that has bedeviled the nation, he added that the railway sub-sector had suffered significant neglect in the past, though it was the most effective and cheapest mode of mass transportation for both passengers and freight.

He said: “The problems of Nigerian transport system include bad roads, inadequate fleet of buses and trucks; irregular and inadequate trains and airplanes services; and congested ports.

“In line with these are physical problems such as the dearth of suitably trained transport managers and planners, capital restructuring bottlenecks, serious issues of institutional reforms and ineffective traffic regulation.”

The current state of the railway, Amaechi added, is an indication of the serious neglect of this important sub-sector occasioned by poor policy initiation and implementation.

“This has led to the proliferation of privately owned and operated road haulage services resulting in unregulated and chaotic situation on the nation’s roads. Nigeria Railway Corporation (NRC) has been effectively reduced to an economically unviable venture dependent on government subvention without any return on the huge investments,” he said.

According to him, government would implement policies that encourage private sector participation and investments towards diversification and growth of the nation’s economy.

Government, he added, would streamline all the agencies in the maritime sector for more effective and efficient performance to meet the expectations of all stakeholders, including the clearance of good at the reports within 48 hours.

In the meantime, twenty-four stockbroking firms failed to make the final list of capital market operators (CMOs) that met the new minimum capital requirement stipulated by the Securities and Exchange Commission (SEC).

SEC had in 2013 announced a new minimum capital requirement for all categories of market operators in pursuant to Section 313(6) of the Investments and Securities Act (ISA) 2007. The compliance deadline expired September 30, 2015 while SEC released a provisional list showing that 437 operators met the capital requirement. The commission then engaged 16 accounting firms for capital verification exercise.

THISDAY gathered that at the end of the verification exercise, 24 stockbroking firms were dropped from the provisional list. However, the commission did not disclose the names of the firms.

According to a statement posted on its website last night titled: “List of Capital Market Operators that complied with the new minimum capital requirement after capital verification exercise”, SEC said the list was based on the consideration of the reports on capital verification and the responses received from the affected CMOs.
“In all, 24 CMOs were disqualified for non-compliance and/or inability to substantiate claim of compliance based on queries raised by the audit firms. In addition, 16 new CMOs were added on the list, 10 of which were newly registered companies and six filed evidence of compliance after the release of provisional list which were verified and accepted.”

SEC increased the minimum capital base for broker/dealer by 329 per cent from the existing N70 million to N300 million. A broking firm which operated with capital base of N40 million, now has N200 million, representing an increase of 400 per cent.

While the minimum capital for dealer was raised by 233 per cent from N30 to N100 million, that of issuing houses (facilitators of new issues in the primary market) was increased to N200 million from N150 million. The capital requirement for a company to underwrite issues was also raised from N100 million to N200 million, just as share registration companies now have to raise their capital base from N50 to N150 million. The minimum capital for corporate investment advisers was however retained at N5 million, unlike individual investment advisers who would only operate with a 300 per cent hike in capital base from N500,000 to N2 million.

ThisDay with additional report from Upshot

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WAIVER CESSATION: Igbokwe urges NIMASA to evolve stronger collaboration with Ships owners

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…Stresses the need for timely disbursement of N44.6billion CVFF***

Highly revered Nigerian Maritime Lawyer, and Senior Advocate of Nigeria (SAN), Mike Igbokwe has urged the Nigeria Maritime Administration and safety Agency (NIMASA) to partner with ship owners and relevant association in the industry to evolving a more vibrant merchant shipping and cabotage trade regime.

Igbokwe gave the counsel during his paper presentation at the just concluded two-day stakeholders’ meeting on Cabotage waiver restrictions, organized by NIMASA.

“NIMASA and shipowners should develop merchant shipping including cabotage trade. A good start is to partner with the relevant associations in this field, such as the Nigeria Indigenous Shipowners Association (NISA), Shipowners Association of Nigeria (SOAN), Oil Trade Group & Maritime Trade Group of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA).

“A cursory look at their vision, mission and objectives, show that they are willing to improve the maritime sector, not just for their members but for stakeholders in the maritime economy and the country”.

Adding that it is of utmost importance for NIMASA to have a through briefing and regular consultation with ships owners, in other to have insight on the challenges facing the ship owners.

“It is of utmost importance for NIMASA to have a thorough briefing and regular consultations with shipowners, to receive insight on the challenges they face, and how the Agency can assist in solving them and encouraging them to invest and participate in the maritime sector, for its development. 

“NIMASA should see them as partners in progress because, if they do not invest in buying ships and registering them in Nigeria, there would be no Nigerian-owned ships in its Register and NIMASA would be unable to discharge its main objective.

The Maritime lawyer also urged NIMASA  to disburse the Cabotage Vessel Financing Fund (CVFF)that currently stands at about N44.6 billion.

“Lest it be forgotten, what is on the lips of almost every shipowner, is the need to disburse the Cabotage Vessel Financing Fund (the CVFF’), which was established by the Coastal and Inland Shipping Act, 2003. It was established to promote the development of indigenous ship acquisition capacity, by providing financial assistance to Nigerian citizens and shipping companies wholly owned by Nigerian operating in the domestic coastal shipping, to purchase and maintain vessels and build shipping capacity. 

“Research shows that this fund has grown to about N44.6billion; and that due to its non-disbursement, financial institutions have repossessed some vessels, resulting in a 43% reduction of the number of operational indigenous shipping companies in Nigeria, in the past few years. 

“Without beating around the bush, to promote indigenous maritime development, prompt action must be taken by NIMASA to commence the disbursement of this Fund to qualified shipowners pursuant to the extant Cabotage Vessel Financing Fund (“CVFF”) Regulations.

Mike Igbokwe (SAN)

“Indeed, as part of its statutory functions, NIMASA is to enforce and administer the provisions of the Cabotage Act 2003 and develop and implement policies and programmes which will facilitate the growth of local capacity in ownership, manning and construction of ships and other maritime infrastructure. Disbursing the CVFF is one of the ways NIMASA can fulfill this mandate.

“To assist in this task, there must be collaboration between NIMASA, financial institutions, the Minister of Transportation, as contained in the CVFF Regulations that are yet to be implemented”, the legal guru highlighted further. 

He urged the agency to create the right environment for its stakeholders to build on and engender the needed capacities to fill the gaps; and ensure that steps are being taken to solve the challenges being faced by stakeholders.

“Lastly, which is the main reason why we are all here, cessation of ministerial waivers on some cabotage requirements, which I believe is worth applause in favour of NIMASA. 

“This is because it appears that the readiness to obtain/grant waivers had made some of the vessels and their owners engaged in cabotage trade, to become complacent and indifferent in quickly ensuring that they updated their capacities, so as not to require the waivers. 

“The cessation of waivers is a way of forcing the relevant stakeholders of the maritime sector, to find workable solutions within, for maritime development and fill the gaps in the local capacities in 100% Nigerian crewing, ship ownership, and ship building, that had necessitated the existence of the waivers since about 15 years ago, when the Cabotage Act came into being. 

“However, NIMASA must ensure that the right environment is provided for its stakeholders to build and possess the needed capacities to fill the gaps; and ensure that steps are being taken to solve the challenges being faced by stakeholders. Or better still, that they are solved within the next 5 years of its intention to stop granting waivers”, he further explained. 

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Breaking News: The Funeral Rites of Matriarch C. Ogbeifun is Live

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The Burial Ceremony of Engr. Greg Ogbeifun’s mother is live. Watch on the website: www.maritimefirstnewspaper.com and on Youtube: Maritimefirst Newspaper.

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Wind Farm Vessel Collision Leaves 15 Injured

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…As Valles Steamship Orders 112,000 dwt Tanker from South Korea***

A wind farm supply vessel and a cargo ship collided in the Baltic Sea on Tuesday leaving 15 injured.

The Cyprus-flagged 80-meter general cargo ship Raba collided with Denmark-flagged 31-meter wind farm supply vessel World Bora near Rügen Island, about three nautical miles off the coast of Hamburg. 

Many of those injured were service engineers on the wind farm vessel, and 10 were seriously hurt. 

They were headed to Iberdrola’s 350MW Wikinger wind farm. Nine of the people on board the World Bora were employees of Siemens Gamesa, two were employees of Iberdrola and four were crew.

The cause of the incident is not yet known, and no pollution has been reported.

After the collision, the two ships were able to proceed to Rügen under their own power, and the injured were then taken to hospital. 

Lifeboat crews from the German Maritime Search and Rescue Service tended to them prior to their transport to hospital via ambulance and helicopter.

“Iberdrola wishes to thank the rescue services for their diligence and professionalism,” the company said in a statement.

In the meantime, the Hong Kong-based shipowner Valles Steamship has ordered a new 112,000 dwt crude oil tanker from South Korea’s Sumitomo Heavy Industries Marine & Engineering.

Sumitomo is to deliver the Aframax to Valles Steamship by the end of 2020, according to data provided by Asiasis.

The newbuild Aframax will join seven other Aframaxes in Valles Steamship’s fleet. Other ships operated by the company include Panamax bulkers and medium and long range product tankers.

The company’s most-recently delivered unit is the 114,426 dwt Aframax tanker Seagalaxy. The naming and delivery of the tanker took place in February 2019, at Namura Shipbuilding’s yard in Japan.

Maritime Executive with additional report from World Maritime News

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