Connect with us
>

Archives

Weekend Destruction: Avengers Again Blow Up Five Crude Pipelines

Published

on

  • As Manufacturers lose N348.6bn to new forex policy

There is an indication that the Niger Delta Avengers, angered by the slow pace of its negotiations with the Federal Government, has again resumed blowing up of strategic oil pipelines, raising fears of further worsening the nation’s crude exports and electricity power supplies.

Specifically, the militants, according to their Twitter handle blew up not fewer than five important pipelines between Friday night and Sunday. Three of their claims were already confirmed, to be valid.

Indicated their twits: “At 9:15p.m on Friday, the @NDAvengers blew up Nigerian National Petroleum Corporation (NNPC) crude oil trunk line to Warri Refinery.

“At 11:26 p.m on Saturday, @NDAvengers blew up two NPDC major crude trunk lines close to Batan flow station in Delta State.

“At 1:15 a.m on Sunday, @NDAvengers blew up two major Chevron oil wells – Well 7 and Well 8, close to Abiteye flow station in Delta State.

“All five operations were carried out by @ndavengers strike team. Well done, soldiers.”

The attacks on the NNPC trunk line to Warri refinery, as well as the attacks on Well 7 & 8 were independently confirmed, as valid.

“We thought their negotiations with the government was already yielding the expected results”, lamented an importer, who spoke on conditions of anonymity, lamenting that what the group destroyed within three days was capable of inflicting incalculable damage on the economy, more so, as the duration for repairing may take more than two weeks.

In the meantime, manufacturers who had outstanding dollar requests and Letters of Credit (applied for at N197/dollar) before the new foreign exchange policy came into existence lost approximately  N348.6bn by Monday, June 20, 2016, the day the policy commenced, findings by our correspondent have revealed.

The outstanding LCs and dollar requests totalled $4.02bn and they were filed when the naira exchange rate was 197 to a dollar. The requests were honoured on the day the new policy commenced but at the new exchange rate of N280 to the dollar.

The aggregate amount bid for by the manufacturers under the former exchange rate of N197 to a dollar was N827.4bn, but the amount they were asked to pay based on the new rate was N1.176tn. The manufacturers were required to come up with the difference of N348.6bn.

Some of the manufacturers, who spoke to our correspondent on Sunday, said they were not happy about the development, adding that they did not incur the losses in the course of doing business but that they arose as a result of a government policy.

They said more job losses and company closures would be the consequence of making them to pay the difference between the old and new exchange rates.

According to them, they got wind of the development when the CBN Governor, Godwin Emefiele, called a stakeholders’ meeting on Friday before the commencement of the policy.

The governor reportedly informed the manufacturers that the apex bank had decided to honour the backlog of dollar requests, adding, however, that the backlog would have to be paid at the new exchange rate of N280 to a dollar instead of N197.

When the industrialists expressed concerns about the difference in rates, they were said to have been told by the CBN that they would have to be bear it.

A major manufacturer of household items, who spoke on condition of anonymity, told our correspondent, “We already knew what the position of the CBN governor was because he had told us that the gap and losses were meant to be taken care of by us. He actually expected us to make losses.

“I don’t understand how in this economy, even if you are managing monetary and macro policies, you can allow losses in the industrial sector or massive losses from exchange rate fluctuation. You need to find a way of reducing or softening the blow of that type of loss.

According to the industrialist, who was present at the stakeholders’ meeting with the CBN governor, the unfortunate thing about the policy is that manufacturers had money in their accounts to pay for the requests but the apex bank was not able to honour the obligations.

He said, “The unfortunate part of this whole system is that a lot of people actually had the money for the past six to seven months but the CBN had not been able to meet the expectation of paying those dues down.

Another manufacturer, who was also at the meeting, said when the apex bank announced that it had decided to honour the backlogs, they were surprised.

He said, “A total of $532m was bought on the spot, the remaining $3.47bn was debited forward as future payments to be made over a period of one to three months. That was supposed to make everybody happy; but unfortunately, that was a bit in the bad case. It was in a bad case because even the $3.47bn was debited to all the banks on that same Monday of June 20 and Tuesday, June 21.

“They took money that manufacturers did not even plan to pay and they debited every bank for their customers that were on that list on that day. They debited them forward for forex they were not going to get for the next three or four months. The future funding has interest implications. So, it is not actually an exposure of N280 anymore, it is N280 plus one to three months’ interest, depending on the length of time allowed for the future payment.”

The manufacturers insisted that the central bank had to come up with palliatives to soften the blow of exchange rate losses.

They said firms had been sacking workers, adding that between March and June ending, about 1,000 employees were disengaged by three firms.

Confirming the story, the President, Manufacturers Association of Nigeria, Dr. Frank Jacobs, said manufacturing firms had been sacking workers massively across the nation.

“We are compiling a list of all the people sacked, and when the list is ready, we will present it to the CBN,” he stated.

Jacobs, however, said the forex situation had improved unlike before when people found it difficult to access dollar, adding that more and more manufacturers had been able to get needed foreign exchange with the new rate.

However, some of the manufacturers said even with the new rate, access had not been as easy as was expected.

“If you need forex and it takes more than three days for you to get it, that is not fast enough,” one of them insisted.

But the MAN president said the reason for the scarcity was that the autonomous market was not supplying enough forex.

Jacobs said, “The CBN intervention has been very low and it will continue like that for a while yet.

“The CBN does not have enough forex and the situation in the Niger Delta is not allowing enough forex to come into the country.”

The Director-General, Lagos Chamber of Commerce and Industry, Mr. Muda Yusuf, agreed with the manufacturers that the CBN should come up with palliatives to cushion the losses from the new forex policy.

He said, “The new policy regime meant significant shocks to investors who had matured LCs awaiting remittances and were caught up in the policy change; these include those who have high foreign debt exposures and others.

“It is, therefore, desirable to cushion the effects of these shocks on the companies, because of the wider implications on the economy; on job creation and retention; and on non-performing loans, which may escalate, given the exposure of the banks to these companies.

“In the past, the CBN had provided support to refinance and restructure such facilities. It is desirable to do so at this time within the context of the development finance mandate of the central bank. If these companies go under, it will be a significant cost not just to the companies, but to the economy as whole.”

Yusuf agreed that the situation with access to forex was better than before, adding, “The situation is better than where we are coming from. The policy is less than one month old. It will take time to stabilise. Already, confidence in the market has been destroyed and it is faster to destroy confidence than to build, but access to forex is much better now than it was before.”

An analyst and the Director-General, West African Institute for Financial and Economic Management, Prof. Akpan Ekpo, said the CBN should have adopted the management float system to gradually raise the bar on the currency, while watching the behaviour of the market.

He said, dollar scarcity would remain a reality as long as the country depended on oil exports, adding that foreigners would not bring their money into an economy fraught with insurgency and poor infrastructure.

“The devaluation came a bit too late; if the currency is scarce, the spot market and the future market are not going to work because our currency is not convertible,” he said.

Additional report from Punch

Archives

WAIVER CESSATION: Igbokwe urges NIMASA to evolve stronger collaboration with Ships owners

Published

on

…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. 

Continue Reading

Archives

Breaking News: The Funeral Rites of Matriarch C. Ogbeifun is Live

Published

on

The Burial Ceremony of Engr. Greg Ogbeifun’s mother is live. Watch on the website: www.maritimefirstnewspaper.com and on Youtube: Maritimefirst Newspaper.

Continue Reading

Archives

Wind Farm Vessel Collision Leaves 15 Injured

Published

on

…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

Continue Reading

Advertisement

Editor’s Pick

Politics