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Panics In Maritime Industry, As Naira Depreciates To N385/Dollar

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  • Buhari orders mass sackings at Budget Office

Palpable fears gripped several critical maritime stakeholders,  including the nation’s core importers,  as the country’s currency the Naira,  on Wednesday crumbled to N385 to a Dollar, in the parallel market.

While industry watchers observed and commented from the angle of demand and supply,  in terms of the scarcity of one,  against the other,  the core operators wondered if those managing the financial fortunes of the country were still awake or slumbering.

Minister of Finance, Mrs. Kemi Adeosun

Minister of Finance, Mrs. Kemi Adeosun

“We can’t import anything again at this rate.  It would be suicidal!”,  a member of the Manufacturers Association of Nigeria (MAN)  who spoke on conditions of anonymity indicated.
” I just finished talking with a friend who imports cars, before you came in.  Nigerians can do without importing new or old cars, if the cost gets out of hand.  But,  can we afford not to import the basic equipment and raw materials? If we can’t,  the next question then is at what price are we going to sell to break even. And then,  how many more men are you going to lay off,  to break even?! ” he asked,  declining further questions,  because he was simply not in the mood.
A pharmaceutical dealer and importer,  Anthony Emeordi wondered if the Naira at its currently run-away slide was not heading to N500 to a dollar,  and wondered how many Nigerians would lose their lives,  when basic life sustaining medications go out of reach of the average Nigerians.
“Tell me,  can we afford not to import certain life-saving injections and drugs?  Can we? We can’t.  So,  we shall continue to import them, on reduced scales.  But,  how many Nigerians at this rate,  would afford to pay for them?”,  he asked,  adding that he knows, people die mostly in war time,  because they could not afford to buy black market priced drugs and wondered if we were not gradually,  inching towards that direction.

Another importer,  James Oladele said the slide would no doubt further reduce activities at the Port, noting that more empty berthing spaces  would develop; and more retrenchment of workers would follow.

Even though the dollar closed at N323-5 at Apapa last Friday, black-marketers this morning at Randle Road/ Tetrazzini area freely offered N385/6, even as the British Pounds hit the N506 mark!

In the meantime, President Muhammadu Buhari has ordered the complete purge of the Budget Office because of the discrepancies and padding of the 2016 budget, The PUNCH has learnt.

Our correspondent gathered on Wednesday that the President handed down the directive following the embarrassment that the budget discrepancies had attracted to his government.

It will be recalled that Buhari had on Monday sacked Mr. Yahaya Gusau as the Director-General of the Budget Office for the same reason and approved the appointment of Mr. Tijjani Mohammed Abdullahi as his replacement.

But a top government official who pleaded anonymity told The PUNCH on Wednesday that the President was not yet done with the issue.

The source said Buhari had been properly briefed of the activities of government officials in the Budget Office who were described as “budget mafia” and accused of sabotaging the budget process.

He said that a decision had been taken that while many of the identified officials would be sacked, the remaining ones should be posted out of the office.

He added that the Head of Service of the Federation, Mrs. Winifred Oyo-Ita, had been directed to implement the presidential directive and communicate the decision to the affected officials.

The source said, “The President is really angry over the discrepancies discovered in the 2016 budget. It has been confirmed that it was a clear case of sabotage. It was said to have been carried out by a budget mafia whose members are strongly enshrined in the office.

“The President’s decision is that the former Director-General should not be the only casualty in this matter.

“He has ordered that the Budget Office should be purged. Many of the officials there will be sacked while others will be transferred to other places other than where they have already constituted themselves to a mafia.”

When asked when the President’s directive would take effect, the source said “it is with immediate effect.”

In sacking Guasu as DG, Budget Office on Monday, Buhari had also approved the appointment of Mr. Ben Akabueze as the Special Adviser on Planning to the Minister of Budget and National Planning.

Sources in the Presidency had, on February 6, alleged that a budget mafia planned to scuttle the innovations introduced by the current administration into the budget by inflating the figures.

A mafia was alleged to have proposed a budget of N9.7tn for capital and overhead spending, excluding personnel cost, as against the Presidency’s initial estimate of about N8tn.

The group was said to have proposed N3tn as overheads alone out of the N9.7tn, a figure the Presidency later slashed to N163bn.

The Ministry of Budget and National planning had also promised to investigate and punish those responsible for the errors and strange figures found in the budget, which was presented to the National Assembly by President Muhammadu Buhari in December, 2015.

The errors had delayed the passage of the budget with the federal legislature, saying the February 25 deadline it set for its approval was no longer feasible.

Additional report from Punch

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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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