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CBN to sanction dollar spend in local transactions

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As part of efforts to stem the incidence of speculative trading in the foreign exchange market and keep the nation’s reserves robust, the Central Bank of Nigeria, CBN, yesterday said a sanction regime against individuals and organisations using the dollar for local transactions would soon commence.

This is just as the apex bank retained the Monetary Policy Rate, MPR at 13 per cent, while other monetary policy interest rates remained unchanged at the end of its two-day Monetary Policy Committee’s meeting concluded in Abuja Addressing journalists at the end of the Committee’s meeting, its Chairman and CBN Governor, Mr. Godwin Emefiele, said that since the currency for doing business in Nigeria remained the naira, the bank would beam its regulatory searchlight on areas where people are making demands for foreign currency as payment for services with a view to dealing with such abuses as appropriate.

The Governor, who alluded to possibilities in which landlords and school proprietors were asking for payments amongst other dollar- transactions, said the bank would like to advise those who are involved in the unwholesome practices to desist from them or be ready to face the full weight of the law.

Speaking on the current foreign reserves of $30bn, the seasoned banker assured that given the pressures and vulnerabilities the economy has contended with over the past couple of weeks, the reserves was still at a level that can fund imports for about five to six months and support business and the economy.

To keep the reserve robust, Emefiele said CBN would canvass the need for stakeholders in the economy to imbibe fiscal discipline and as much as possible see what could be done to build up the excess crude account. He hinted of the bank’s determination to begin to taking certain actions that will nip the unneeded demand in the bud.

On the activities of the Bureau De Change, BDCs, in the forex market, the Governor rated the market as shallow, when compared to the interbank market in terms of percentage of the foreign exchange market. He added that since the BDCs market remained very insignificant and it deals with transactions are not documented, CBN will not be looking at the world outlook for the Naira by looking at the BDC rate. To move the financial system forward, Emefiele said the CBN would appraise the outlook based on the interbank market exchange rate at N198 to the dollar, expressing the believe that “given the pressure that we have seen in the market such as the drop in crude prices and the pressure that has come with it, adjusting the exchange rate to the current level I will say is okay is sufficiently appropriate.” He explained further that a number of proactive steps would be taken to deepen the foreign exchange market, improve supply, and look at areas where demand pressure and inefficiencies can come from and mitigate them.

According to him, the apex bank will soon begin to take actions to control big demand that is not beneficial to the economy.

On allegations that the apex bank was prioritising the sale of foreign exchange amongst other monetary policy imperatives,  the Governor said: “There is nothing like prioritising sales of forex to foreign investors. CBN on a daily basis or as it deems fit sells foreign exchange to people who have effective demand.

“But what we have done consistently is to make sure that for the foreign investors, we have made a promise to them that it is a free entry and free exit market. That whenever they decide to come and invest in Nigeria and whenever they want out of the market they should be unhindered.”

Meanwhile, the Monetary Policy Committee at the end of its meeting retained the MPR, which is the benchmark interest rate on banks’ lending at 13 per cent and left unchanged the Cash Reserve Ratio, CRR, on Private Sector deposits at 20 per cent;  CRR on Public Sector deposits at 75 per cent; and the liquidity ratio at 30 per cent.

Emefiele said: “We will continue to monitor the liquidity in the system particularly during this election season. In the course of time, the CBN will be taking certain actions, we don’t know what yet, but it depends on the size of the liquidity, the rate at which people use liquidity to target the real sectors of the economy or they use them for what I call the unholy attitude of attacking the currency, depending on the direction that we see people move, we will react appropriately but interest rate outlook for now still remains tight.”

The Committee also noted that while the ugly developments at the global international oil market continued to affect government revenues and reserves accretion and impacted negatively on capital flows, the financial system remained stable with key financial and macroeconomic indicators showing robustness.

Consequent upon this, the Committee directed that the CBN should adopt all necessary measures to improve the resilience of the financial system as well as the overall economic environment and function of the financial markets.

The Governor said the CBN had taken necessary steps to deepen the market, increase the level of transparency and liquidity and improve the ratings of the financial system by global agencies. –

National Mirror.

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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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