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We’ve little to show for 16 years of oil boom – Buhari



  • As Dollar scarcity makes Firms struggle to repay foreign loans

President Muhammadu Buhari on Monday regretted that Nigeria has little to show for the huge resources it made from oil in the past 16 years.

He said despite the fact that oil sold above $100 per barrel for the greater part of the last 16 years, leaders of the country refused to plan for the rainy day.

According to a statement by his Special Adviser on Media and Publicity, Mr. Femi Adesina, the President spoke while receiving the Nigerian-born President of the International Civil Aviation Organisation, Dr. Bernard O. Aliyu, at the Presidential Villa, Abuja.

Buhari said while enduring infrastructure was built with the little resources available in the First Republic, a lot of money was made in the last 16 years with little to show for the money.

The Peoples Democratic Party has been in charge of the Federal Government in the last 16 years, until 2015 when Buhari of the All Progressives Congress ousted the former President Goodluck Jonathan of the PDP.

“In the First Republic, more enduring infrastructure was built with meagre resources. But in the past 16 years, we made a lot of money without planning for the rainy day.

“We showed a lot of indiscipline in managing our economy, and that is why we are where we are today. But this time round, we’ll do our best,” the President said.

He stressed the urgent need to ensure that the potentials of Nigeria are harnessed and used for the good of the country.

He said, “Nigeria needs to work on her potentials, so that we don’t remain permanently at the level of potentials.

“If Ethiopia is sustained largely by her airline industry, we have greater potentials here. But we must move out, engage with the rest of the world, as we need to re-establish the integrity of this country. We need to rebuild this country again.”

Aliyu was also quoted as commending Buhari for his strides on anti-corruption fight.

He was said to have urged Nigeria to pay more attention to development of civil aviation.

“Civil aviation is a catalyst for economic development. The level of aviation development in any country mirrors the economic development of that country,” Aliyu said.

The ICAO president pledged to support the development of the aviation industry in Nigeria.

He urged the country to improve on training and capacity development, aviation security, aerodromes and air navigation, runways, control towers as well as terminal buildings, among others.

In the meantime, although foreign loans are attractive for their single digit and low interest rates, the continued depreciation in value of the naira against major foreign currencies has turned them into a huge burden for borrowers in Nigeria.

The naira currently exchanges for N197 to a dollar at the official window and N320 at the parallel market.

Investigations by our correspondent revealed that Nigerian firms that borrowed dollar denominated loans were facing the risk of foreclosure on assets pledged as collateral and loss of credibility among creditors.

It was gathered that whereas some of them took credit facilities at a time when the dollar exchanged for N150, now that the currency is exchanging for N320, the cost of servicing the loans had now gone up by 100 per cent.

Although the losses would have been less if some of the firms were able to service the loans at the official exchange rate of N197 to a dollar, the Central Bank of Nigeria had in the wake of the sharp drop in crude oil prices embarked on forex rationing measures, cutting off most firms from access to the official window.

The Managing Director of Spectranet, a leading Internet Service Provider in the country, David Venn, said the company had taken foreign loans when the exchange rate was N160 to a dollar, but that difficulties in accessing dollars to service the loans at the official exchange rate posed a lot of challenges for the company’s earnings and credit rating.

He said, “We have some debts due for repayment in dollars. We have borrowed billions of dollars at N160 but the exchange rate is now above N300.

“We have the cash but we cannot pay and it affects our credit rating. The official rate is N200 but we cannot get the dollar at N200.”

Also, the Managing Director, Kasapreko, makers of the popular Alomo Bitters, Mr. Kojo Nunoo, regretted that the inability to access dollars to service the loan had plunged the business into a lot of difficulties.

He said, “The dollar scarcity has plunged our business into a lot of difficulties, because we have serious working capital tied up here.

“That has posed a lot of challenges to the company, because the money is sitting here earning nothing; and then we are borrowing in Ghana to finance the business in Nigeria and pay interest. So, we are not getting any of our money here and then we are paying interest on the loans we have borrowed back home. If we are not careful, we may collapse if we don’t get out.”

A recent survey detailed the ongoing crisis in the real sector of the Nigerian economy.

The survey conducted by PricewaterhouseCoopers showed that over 60 per cent of companies in Nigeria recorded huge declining sales/revenue as a result of the forex rationing policy.

The report, commissioned by the Lagos Chamber of Commerce and Industry, and unveiled in Lagos by the President, LCCI, Dr. Nike Akande, and the Regional Managing Partner, West Africa, PwC, Mr. Uyi Akpata, revealed that 42 per cent of the companies had been implementing aggressive cost-cutting measures, while 18 per cent were already sacking staff.

The Director-General, LCCI, Mr. Muda Yusuf, told our correspondent that investors who were exposed to foreign facilities were finding things very difficult at the moment.

He said, “When you are taking foreign loans, one of the biggest risks you face is exchange rate fluctuations. For a long time, Nigeria has had very stable exchange rate; so, the risks did not quite crystallise; but now, the risks have crystallised and many firms find it difficult to manage the situation.

“If you took the loan when the exchange rate was N150 and now you are talking of N300, immediately your cost has gone up by 100 per cent. If the loan is not used for a venture that is also generating foreign exchange, it becomes more difficult.”

Punch with additional report from Upshot


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



…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



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

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Wind Farm Vessel Collision Leaves 15 Injured



…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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