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FOREX: Apapa Gridlock Wanes, As Inward Cargo Drops By 60%

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  • Buhari rejects naira devaluation

Bisi Akingbade  & Modinat Enikodunmo
Lagos

The dreaded Apapa gridlock is fast waning, as cargo import into Nigeria, particularly through the Apapa Port drops by about 60 percent.

The remarkable drop, which maritime industry watchers noted came following lack lustre Central Bank of Nigeria (CBN) on forex restrictions policy, may have therefore become an effective solution, to a menace the nation’s road traffic managers, including the Police, LASTMA, FRSC and even the Nigerian navy had failed to curb.

“You can see our traffic now” a resident, Khadijat Oladele indicated, heaving a sigh of relief, that she drives in and out of Apapa, without restriction presently.

CBN Governor, Mr. Godwin Emefiele

CBN Governor, Mr. Godwin Emefiele

“By this time last year, it was a different thing entirely. One had to either go out, very early in the mornings, or wait, till very late in the evenings”, she noted.

Confirming this, another Apapa area dweller, Benny Okonji however lamented, that the significant drop in cargo import had begun to affect his take home and standard of living.

“As a dock worker, many of us are paid, on basis of what we handled. We don’t drink again. And some Sundays, we don’t go to church again too. We earn far less now. And we thank the CBN useless policies for that too!”.

An analyst, who spoke on conditions of anonymity, also confirmed the cargo import slide, urged Government to do something urgent, stressing that a use of force has its limitations, as far as the maritime industry is concerned. Obviously, he was referring to President Muhammadu Buhari’s vow not to depreciate the Naira.

“We are happy Mr. President has refused to depreciate the Naira. But what’s the point in talking tough, if you have a CBN that is deep in slumber?”, he asked, stating that the nation never had it this bad!

“The imports have dropped. People are afraid to import because they are not sure of government policy direction. Also, the high exchange rate is not helping matter’’, another highly placed source in Customs also noted.

It could also be recalled that the Customs top hierarchy has set one trillion naira revenue target for the service this year, a remarkably tall order, several industry stakeholders have described as ‘mission impossible’.

‘’The target is just a projection’’ a Customs source however, explained.

The Founder of National Association of Government Approved Freight Forwarders (NAGAFF), Dr. Boniface Aniebonam in his own view noted however, that the high revenue targets annually set by the Customs has affected the service delivery of the service.

He highlighted that the Service should de-emphasis on revenue but focus more on trade facilitation.

It could be recalled that last year, the Customs set a trillion naira target but realized about N900 billon, an amount which the Comptroller-General of Customs, Col.(rtd) Hameed Alli, said could have been more if not for the Forex restriction of the Central Bank of Nigeria.

The Nigeria Customs Service, it was learnt was billed to pay an official visit to the CBN to enlighten the apex bank, on the some of the dangers and pitfalls, inherent in its warped forex restriction policies.

In the meantime, President Muhammadu Buhari has said he is yet to be convinced that Nigerians will benefit from an official devaluation of the Naira.

He spoke on Wednesday at an interactive meeting with Nigerians living in Nairobi,  Kenya.

President Buhari, in a statement by his Senior Special Assistant on Media and Publicity, Garba Shehu, maintained that while export-driven economies could benefit from devaluation of their currencies, devaluation will only result in further inflation and hardship for the poor and middle class in Nigeria’s import-dependent economy.

He said he had no intention of bringing further hardship on the country’s poor who, he said, have suffered enough.

Likening devaluation of the Naira to having it “killed”, President Buhari said the proponents of devaluation will have to work harder to convince him that ordinary Nigerians will gain anything from it.

The President also rejected suggestions that the Central Bank of Nigeria (CBN) should resume the sale of foreign exchange to Bureaux de Change (BDCs), saying that the bureau de change business has become a scam and a drain on the economy.

“We had just 74 of the bureaux in 2005, now they  have grown to about 2,800,” President Buhari noted.

He alleged that some bank and government officials used surrogates to run the BDCs and  prosper at public expense by obtaining foreign exchange from the government at official rates and selling it at much higher rates.

The President said: “We will use our foreign exchange for industry, spare parts and the development of needed infrastructure.

“We don’t have the dollars to give to the BDCs. Let them go and get it from wherever they can, other than the Central Bank,” President Buhari told the gathering.

The President reaffirmed his conviction that about a third of petroleum subsidy payments under the previous administration was bogus.

“They just stamped papers and collected our foreign exchange,” he said.

The President urged Nigerians studying abroad to bear with his administration as it strives to address the challenges they are facing as a result of new foreign exchange measures.

He is optimistic that the economy will stabilise soon with the efficient implementation of measures and policies that have been introduced by his administration.

 The President said that for peace to reign in the world, the global community must develop and implement comprehensive and coordinated counter-extremism strategies at sub-regional, regional and continental levels.

He spoke during the opening of bilateral talks between Nigeria and Kenya. He said radicalisation and violent extremism were taking root across Africa and must be tackled head-on and with brand new strategies.

His words: “The threat posed to national, regional and global peace and security by terrorists has taken an alarming dimension in recent times.

“In Nigeria, Boko Haram has caused havoc, especially in the Northeastern part of the country – killing, maiming, destroying livelihoods and displacing hapless citizens, majority of who are women and children.

“In Kenya, you also face terrorist challenges. Similarly, Iraq and Syria are facing their own brand of terrorism which has thrown the entire Middle East into turmoil. Terrorism does not respect religion, creed, race or national boundaries.  No country is safe from the menace.

“This is why the entire global community must work in a concerted manner, particularly in areas of sharing intelligence and pooling resources and finance, to confront the scourge. Our armed forces and security services should also be adequately supported and well-motivated to fight terrorism.

“It is worth emphasising that terrorists are continually changing tactics, building alliances, merging and generally getting more sophisticated, all in an attempt to build their capacity to inflict pain and misery on societies.

“To win the war on terror, therefore, we must respond to this phenomenon by developing new and versatile strategies. Together with our allies, Nigeria and Kenya can successfully tackle these challenges that have traumatised and brought untold suffering to our people.”

At the Nigeria–Kenya Business Forum, President Buhari expressed the confidence that the Nigeria-Kenya Business Council and the Kenya-Nigeria Agribusiness Forum will serve as platforms for the promotion of intra-African trade.

The two countries plan to launch five-year business visas for business people operating in both countries to allow ease of doing business.

While signing various bilateral trade agreements in Nairobi, Kenyan President Uhuru Kenyatta and Buhari committed themselves to removing barriers to trade between the two countries.

They pledged to jointly fight corruption and insecurity in a bid to strengthen trade ties between the East and West African nations.

Kenya also announced that it will host the inaugural Kenya – Nigeria Joint Commission for cooperation later this year.

Kenya and Nigeria began the process of reviving investment and trade agreements signed eight months ago.

The two countries are keen on establishing a joint commission for cooperation aimed at boosting ties in trade, tourism, security, agriculture and energy.

Kenyatta said:  ”The streaming of immigration issues, particularly the issuance of the five-year visas for our businessmen, will invigorate our trade and business ties, the Kenya-Nigeria joint trade commission for cooperation remains an important implementation and monitoring mechanism for the agreements that our two countries have signed.”

Buhari and Kenyatta pledged to cooperate in the war against terrorism and corruption.

Both countries are battling the threat of terrorism within their borders, Nigeria from Boko Haram and Kenya from the Al Qaeda-linked militant group Al Shabab.

Kenya has recently discovered oil in the North of the country and is seeking expertise from Nigeria, Africa’s largest oil producer, which Buhari pledged to give.

Buhari said: “We congratulate Kenya for discovering oil and gas. There we believe with indigenous technology from Nigeria we will be able to help. In other areas we are going to benefit from agriculture in Kenya.”

Official figures indicate that trade between Kenya and Nigeria stood at $190million in 2013.

Additional report from Nation

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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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