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Buhari’s exchange rate policy doomed to fail, says Sanusi



  • Trudeau announces 22 February end date, for Canada’s airstrikes against  IS

The Emir of Kano and the immediate past governor of the Central Bank (CBN), Muhammad Sanusi II, has warned that President Muhammadu Buhari risks exacerbating Nigeria’s economic woes and undermining his government’s achievements on security and corruption by endorsing exchange rate policies that are doomed to fail.

Speaking in an interview with the Financial Times in his palace in Kano, Sanusi expressed disappointment that Buhari’s strong security and anti-corruption efforts are being overshadowed by a monetary policy regime with “very obvious drawbacks that far outweigh its dubious benefits”.

The Sanusi interview was published by the Financial Times, just as the Managing Director of the International Monetary Fund (IMF), Christine Lagarde, during an online question and answer session with journalists in Washington, United States, said Nigeria needs to adopt a “sensible” foreign exchange policy as it strives to fend off external economic shocks. Sanusi lauded Buhari’s removal of “wasteful and corrupt fuel subsidies”, but argued that the current foreign exchange policy endorsed by the president encourages similar rent seeking and corruption which trailed the subsidy regime.

“He (Buhari) has put an end to the [crude] swap regime which is also one side of rent-seeking and corruption…he has made the NNPC start producing accounts, so there is greater transparency,” Sanusi told Financial Times.

“These measures are good for the economy and display strong political will to change the system. But getting monetary and fiscal policies right will be crucial for broader progress in structural reform.”

FT quoted the emir as saying the president’s anticorruption stance was “totally inconsistent” with the foreign exchange regime he supported, adding that it “encourages corruption and rent-seeking similar to the fuel subsidy regime”.

The emir, who was CBN governor from 2009 to 2014, expressed his displeasure with the monetary policy regime which he said has “very obvious drawbacks that far outweigh its dubious benefits”. “Unfortunately, because the exchange rate is right out there in front now, monetary policy is being seen as the barometer for broader economic thinking,” he said.

“It is sad that on this one policy you get it so wrong that you risk taking away attention from everything else you are doing.” Sanusi who resisted devaluation during his own tenure as CBN governor said he did so because he “had reserves of over $40bn and an oil price at over $110,” admitting that there are no easy ways out of the current situation and “devaluation is a bitter pill”.

The country’s economic woes were now being exacerbated, with the currency peg and restrictions in the foreign exchange market creating “a lot of speculative and precautionary demand,” Sanusi argued.

Exporters and investors “are holding on to foreign currency, as no one would sell at the rate the government is setting”, while “the government does not have the reserves to keep the exchange rate at its official level in the market”.

In the meantime, Canada will stop bombing targets in Syria and Iraq belonging to the militant group known as Islamic State by 22 February at the latest, Prime Minister Justin Trudeau has said.

Speaking in Ottawa on Monday, he said air strikes alone did not secure lasting stability for local people.

Mr Trudeau, who was elected in October, promised to withdraw six fighter jets from the region during his campaign.

But Canada will keep two surveillance planes in the region, he said.

It will also keep refuelling aircraft in the area and will increase the number of Canadian soldiers training local troops who are fighting Islamic State (IS).

“It is important to understand that while air strike operations can be very useful to achieve short-term military and territorial gains, they do not on their own achieve long-term stability for local communities,” Mr Trudeau said.

“Canadians learned this lesson first hand during a very difficult decade in Afghanistan where our forces became expert military trainers, renowned around the world.”

He said Canadian armed forces would instead allocate more military resources to training Iraqi security forces so that “a murderous gang of thugs who are terrorising some of the most vulnerable people on Earth” could be defeated.

Mr Trudeau’s move has been criticised by the opposition, whose leader Rona Ambrose in parliament accused the government of “stepping back from the fight against IS when our allies are stepping up”.

“The reality is that when we talk about Canada’s new approach to fighting IS… Canada is backing away,” she said.

But Mr Trudeau is adamant that his announcement on Monday makes sound strategic sense.

“Call us old-fashioned, but we think that we ought to avoid doing precisely what our enemies want us to do. They want us to elevate them, to give in to fear, to indulge in hatred, to eye one another with suspicion and to take leave of our faculties,” he said.

Many Canadians have lost enthusiasm for overseas military missions after a decade of involvement in Afghanistan that ended in 2011, correspondents say. More than 150 Canadian soldiers were killed over that period.
The Citizen with additional report from BBC


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



…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



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

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Wind Farm Vessel Collision Leaves 15 Injured



…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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