Why the move to kick-start regional maritime Bank is gaining momentum


By Foster Obi

Recent move by the Minister of Transportation, Mu’azu Sambo, to secure accommodation for the commencement of the regional maritime bank may have come as a relief to stakeholders in the industry who believe the bank ought to have started over a decade ago.

Sambo who said this when he received in courtesy, the secretary general, Maritime Organisation of West and Central Africa, (MOWCA), Dr. Paul Adalikwu last Wednesday at the Ministry, expressed the hope that within 90 days the Ministry will be able to make the accommodation possible.

Among those that canvassed for the establishment of a maritime bank is the Nigerian Ship Owners Association. The reason it gave among others, is that such a specialized bank is needed to facilitate the financing of vessels acquisition, development of dockyards, shipyards, shipbuilding and general maritime infrastructure development.

Sambo is obviously riding on the new wave momentum created by the immediate past Minister of Transportation, Rotimi  Chibuike Amaechi  who dusted the files of  almost abandoned project.

At the last meeting of the MOWCA Committee of Experts on the Regional Maritime Development Bank Project and Interim Board of Directors which Nigeria hosted,  the former Minister said Nigeria was waiting for the acceptance of two-third of Member States to proceed with the Regional Maritime Development Bank project.

For the creation of the bank, MOWCA had earlier reached some decisions that it expects all its Member States to meet. MOWCA unifies 25 countries on the West and Central African shipping range (inclusive of five landlocked countries).

The member countries of the MOWCA, having identified the major deficit in the development of indigenous participation in the regional maritime sector and associated value chain, had at an annual general session agreed to establish a maritime bank.

The focus of the bank will be the growth and development of maritime in West and Central Africa with a view to raising debt and equity capital of US$850 million and US$150 million respectively.

The Nigerian government, through the Federal Ministry of Transportation (FMOT), was then mandated to take all necessary steps to bring the bank to actualisation.

Amaechi had said that any decision reached at the end of the meeting would not be taken to President Muhammadu Buhari until other member states indicate interest in writing to be part of the project which would develop the maritime sector in Africa.

“Nigeria is going to sign for being part of that meeting and we are willing to make our contributions but we will not make those contributions until the two-third of the member states have accepted the decision and have agreed on a timeline which they will make their contributions. I’m willing to participate, we can’t have just six countries passing a law on behalf of over 20 countries in the region,” he said.

The member countries of the proposed bank are Nigeria, Angola, The Gambia, Benin, Ghana, Sao Tome, and Principe, Cameroon, Guinea, Senegal, Cape Verde, Guinea-Bissau, Sierra Leone, Republic of Congo, Equatorial Guinea, Togo, Democratic Republic of Congo, Liberia, Cote d’Ivoire, Mauritania, Gabon, Mozambique, Burkina Faso, Chad, Niger, Central African Republic, and Mali.

The move by Sambo is a confirmation that the requirements have been met.

Director General of the Nigerian Maritime Administration and Safety Agency, NIMASA, Dr Bashir Jamoh is one of those that have highlighted the need for such a bank to galvanise activities in the industry.

In a recent opinion, he noted that, “a maritime bank may not be the magic wand that would resolve all the issues in the sector but it would go a long way in facilitating accelerated development of a sector that would not only make the country a force to reckon with in world maritime business, but would also enable it to reap optimally the benefits that are inherent in the sector for its economic growth and development, and for the betterment of the lives of its people.”

According to him, “Nigeria has been without a flag carrier for more than three decades, and as such, has been relying on foreign shipping companies for all its seaborne trade and due to the high cost of acquiring ships; it has also not been possible for individuals to float shipping companies that can favourably compete with foreign shipping firms.

“Ship repair is about having the required facilities to carry out repairs and maintenance of vessels in the country. The absence of a dry dock in the country compelled the Nigerian Maritime Administration and Safety Agency (NIMASA) to embark on the purchase of a multi-million dollar modular floating dock, to serve that purpose.” he said.

He noted that as lofty as it is, the CVFF, when operational, would only scratch the surface of the problem of financing shipping activities in the country, considering what is required to make the shipping industry a viable one,” adding, “ Worthy of mention also is the fact that existing financial institutions have limited capacity to finance the country’s shipping industry. Besides, they have very little understanding of issues related to the industry.

“Activities associated with the blue economy, which will definitely be on the increase as individuals and companies try to tap into the enormous opportunities in the maritime sector will require huge funding that the commercial banks may not be in a position to handle. This, therefore, calls for a specialized bank that can speak the language of maritime and also provide adequate funding for the sector based on good understanding and appreciation of the peculiarities of the sector. This will be in line with the treatment other critical sectors of the economy have received,” Jamoh declared.

It must be noted that Nigeria had planned to establish its own Maritime Bank but decided to drop it for the regional project.  The Government said the proposed Maritime Development Bank of Nigeria (MDBN) could send the wrong signal to MOWCA member states that are already committed to the formation of the Regional Maritime Development Bank (RMDB).

Director of Legal Services, Federal Ministry of Transport, Pius Oteh said the entire members of MOWCA, in 2011, agreed to have a billion-dollar capital base for the bank.

He also disclosed that the shareholding of the RMDB has been shared amongst MOWCA members with Nigeria taking the highest of 12 per cent.

‘‘There is an agreement that dates back to 2011, where the Transport Ministers in West and Central Africa approved and ratified the various governments of the Maritime Organisation for West and Central Africa. But for some period, there was no serious follow up on these decisions until about four years ago, we have re-energized this process.

‘‘Countries have signed the charter to the bank and we have enough countries to activate the process of the bank, as at this time processes are going on.

‘‘The headquarters of the bank will be in Nigeria, the other 24 countries have conceded to that and they have also agreed that a Nigerian will be the President of the bank. But it is going to be a Private-Public sector-driven Bank. The states in the two sub-region of West and Central Africa collectively have 51 percent of the shareholding of the Bank given to the MOWCA states and these shares were allotted to them based on volume of trade and so, naturally, Nigeria has the lion’s share of 12 percent and the other 49 percent will be for institutional investors,” he explained.

He said the African Import-Export Bank (AFREXIM) has shown a lot of interest, with a lot of institutional investors, particularly within member countries who want to be part of the bank.

He said the Secretary-general, MOWCA, Dr. Paul Adalikwu, who is a Nigerian, has been given the mandate to follow the process and ensure that the bank takes off as quickly as possible, hopefully within this year.

Oteh noted that the Federal Ministry of Transportation is currently engaged in discussion with the Central Bank of Nigeria (CBN) for some assistance concerning office spaces and other things required to run the bank.

‘‘The point we are making is that having gone that far, having reached an agreement with sister countries in the two sub-regions, we will like to continue and conclude that process as quickly as possible and pushing ahead with the Nigerian initiative is likely to bring a wrong impression that we are no longer fully committed to the Regional Maritime Development Bank; that is why we used that language that we should step down the Nigerian initiative and at the appropriate time, there is nothing wrong in having a domestic Maritime Development Bank, he said.

Oteh, however, added that, given how far the Regional Maritime Development Bank has come and properly structured, the bank will give Nigeria a wider playing field and more access to funds in terms of pulling resources from 25 countries instead of from a single country.

“So we think it is an initiative we should pursue to conclusion before we take up any new initiative. We are looking at one billion Dollars as the capital base of the bank,” he added.


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