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Excess Crude Account: FG, states shared N6.2tn in four years, says Okonjo-Iweala

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The Federal Government on Sunday night released details of how N6.21tn was shared from the Excess Crude Account by the federal and state governments between 2011 and 2014.

The breakdown was released by the Minister of Finance, Dr. Ngozi Okonjo-Iweala, through a statement by her Special Adviser on Communications, Mr. Paul Nwabuikwu.

The minister had last week promised to make details of the account available following a demand by the state governors under the Nigeria Governors’ Forum that she should explain how she had managed the over $20bn in the ECA between June 2013 and April 2015.

However, in the document issued on Sunday, the minister said she needed to make public the details “to clarify issues thrown up by recent claims made by Governor Rotimi Amaechi of Rivers State on behalf of some governors.”

Analyses of the allocation as revealed by the document showed that in addition to their constitutionally approved receipts from the Federation Account, the Federal Government received the sum of N3.29tn, while the 36 states got a total of N2.92tn from the ECA within the four-year period.

A further breakdown of the ECA disbursement showed that the 36 states received N966.6bn in 2011; N816.3bn in 2012; N859.4bn in 2013 and N282.8bn in 2014.

The document attributed the low figure shared in 2014 to a steep decline in revenues due to the impact of the crash in global oil prices, which began in the middle of that year.

Akwa Ibom, with N265bn, got the highest allocation from the ECA; while Rivers and Delta states followed with N230.4bn and N216.7bn, respectively.

Other states with highest allocations, according to the document, are Bayelsa, N176.3bn; Kano, N106.5bn; and Lagos, N82.9bn.

On the other hand, Kwara (N52.8bn), Enugu (N51.6bn), Gombe (N47.7bn), Nasarawa (N46.9bn), Ekiti (N46.8bn) and Ebonyi (N44.3bn) received the least amounts.

The summary of the inflows and outflows from the account indicated that the opening balance was $4.56bn in 2011 and reached a peak the following year at $8.7bn before declining to $2.3bn in 2013. The document put the balance as of May 2015 at $2.07bn, noting that “the fluctuation in the ECA reflects the sharing of the proceeds usually requested by state governors as well as the practice of augmentation.”

It said the augmentation involved additional sharing from the ECA by both tiers of government when available funds were not adequate to meet revenue projections.

Okonjo-Iweala had last week described the governors’ demand as strange because issues relating to the management of the ECA were usually discussed by the commissioners of Finance of the 36 states of the federation during the monthly Federation Accounts Allocation Committee meeting. She had said since the commissioners were representatives of their respective governors at the meeting, there was no basis for the demand.

Okonjo-Iweala’s statement read in part, “It has come to our attention that governors under the aegis of the Nigeria Governors’ Forum have requested that the Coordinating Minister for the Economy and Minister of Finance should account for an estimated $20bn oil revenue from the Excess Crude Account from June 2013 to April 2015.

“There is no basis for the demand and the stated amount. The statement by the governors is totally strange because FAAC meets every month and the ECA is discussed at every session, with all the state commissioners of Finance present.”

The Citizen 

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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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