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CBN plans to sell N1trn treasury bills in Q-2 2016

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The Central Bank of Nigeria (CBN) yesterday said it will sell treasury bills of N1.73 trillion in the second quarter of the year. The apex bank stated this in its Nigeria Treasury Bills Issue programme released on Thursday.

Treasury bills (TBs) are short term (less than one year) debt instruments used by the CBN to borrow from the public on behalf of the federal government. The CBN also uses TBs to control money supply in the economy.

The TB issue programme  commences on March 17, and ends on June 2nd 2016. During the period, the apex bank will issue N303.78 billion worth of 91 days TBs, N169.99 billion worth of 182 days TBs, and N599.63 billion worth of 364 days TBs.

These however represent the amount of TBs that would mature for payment during the period. A breakdown of the programme revealed that in March, the apex bank plans to sell N261.62 billion worth of TBs, comprising N68.12 billion worth of 91 days bills, N37.23 billion worth of 182 days bills and N156.27 billion worth of 364 bills.

In April, the apex bank plans to sell N386.41 billion worth of TBs, comprising N92.19 billion worth of 91 days bills, N68.49 billion worth of 182 days bills, and N225.73 billion worth of 364 days bills.

From May 5 to June 2nd, the CBN plans to sell 405.4 billion worth of TBs comprising N123.47 billion worth of 91 days bills, N64.25 billion worth of 182 bills and N217.68 billion worth of 384 days bills.

Meanwhile the amount of idle cash (excess liquidity) in the interbank money market, where bank lend money to each other, fell by 50 percent to N222.46 billion on Friday from N448.47 billion at the beginning of the week. This prompted cost of funds to rise with interest rate on short term lending (Overnight and Secured) rising to 5.0 percent from 3.0 percent in the previous week.

Commenting on this development, Cowry Asset Management Plc stated in its weekly financial market review and outlook, “In the just concluded week, Nigerian Offered Interbank Rates increased for all tenor buckets amid strain in financial system liquidity. Central  Bank  of  Nigeria  sold  N160.66  billion  in  213- day  treasury  bills  via Open  Market  Operations  (OMO).

“Also,  standing  deposit  facility  (SDF)  rates decreased week-on-week (w-o-w)  by 47.90 percent to N325.67  billion  while a standing lending facility (SLF) of  N3.76 billion suggested that banks resorted to  the lender of last resort in  the review week as  against zero SLF booked in the preceding week.

“The overnight funds rate, NIBOR for 1 month,  3 months  and 6 months increased to 5.31 percent  (from 3.29 31 percent), 7.7831 percent  from 7.41 31 percent), 9.0831 percent   (from 8.93 31 percent) and 10.97 31 percent   (from  10.57 31 percent)  respectively.  This week we expect increase   in interbank lending rates on anticipated financial system outflows via investment in FGN local currency bonds.”

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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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