The maiden edition of the Nigerian Ship Finance Conference and Exhibition (NISFCOE), which the organisers have promised would be an annual event, held at the Grand Ball Room, Eko Hotels & Suites, Victoria Island, Lagos State, Nigeria, on Monday, October 31st, 2016.


NISFCOE 2016 had as its theme: Financing Sustainable Maritime Development In Nigeria.


Nigeria, an African country on the Gulf of Guinea, has an estimated 8,600 kilometres of inland waterways, territorial sea measuring 12 nautical miles, exclusive economic zone (EEZ) of 200 nautical miles and continental shelf of 200 metres depth.


Nigeria’s strategic location in Africa puts her at an advantage as a maritime location of choice. A coastal state with an extensive coastline, the maritime industry is a key sector of the Nigeria economy. A major oil producing and exporting country, Nigeria’s teeming population makes her a consumer nation and a large market for foreign goods.


Therefore, the organisers of NISFCOE 2016 listed the objectives as being; to enlighten maritime stakeholders in Nigeria of available finance/funding opportunities for ship acquisition; and to identify sources of finance, access and management of ship finance.


NISFCOE 2016 was attended by key industry stakeholders, including Nigerian Minister of Transportation Chibuike Rotimi Amaechi, represented by the Director-General of the Nigerian Maritime Administration and Safety Agency (NIMASA), Dr. Dakuku Peterside; the Chairman, FM&T Consulting, Dr. Chris Asoluka; the Acting Managing Director, NEXIM Bank, Mr. Bashir Wali; the Executive Secretary of the Nigerian Shippers’ Council (NSC), Mr. Hassan Bello, represented by the Acting Director, Inland Transport Services, Mr. Akintunde Makinde; the Chairman of the Shipowners’ Forum, Mrs. Margaret Onyema-Orakwusi; the Chief of the Naval Staff, Vice Admiral Ibok-Ette Ibas, represented by Commodore P.E. Efedue; the Customs Area Controller (CAC), Western Marine Command (WMC), Nigeria Customs Service (NCS), Comptroller Umar Yusuf, representing the Comptroller-General of Customs (CGC), Colonel Hameed Ali (rtd.); President of the Shipowners’ Association of Nigeria (SOAN), Engr. Greg Ogbeifun; founding Chairman of the defunct Indigenous Shipowners’ Association of Nigeria (ISAN), Chief Isaac Jolapamo; former Governor of Ekiti State, Otunba Niyi Adebayo; the Managing Director, Peter Maritime Consulting, Sir Peter Olorunfemi.


An opening address was made by Chief Chris Asoluka as the Chairman of the occasion, while the Minister of Transportation made a keynote address. The lead paper, Demystifying Ship Finance: Opportunities for Government, Financial Institutions and Investors prepared by Ship Finance Consultant to the African Union (AU) Mr. Oumar Seck was presented by Sir Peter Olorunfemi.


The Managing Director of Fidelity Bank, Mr. Nnamdi Okonkwo, represented by the Head of Transport and Shipping, Mr. Mike Nnaji, presented the paper, Ship Finance: Strides and Challenges of the Banking Sector in Nigeria.


There had been goodwill messages from the Nigeria Customs Service(NCS), Shipowners’ Forum, Nigeria Shippers’ Council (NCS) and NEXIM Bank, while the Managing Director of Marine Platforms, Mr. Taofik Adegbite presented Empirical Evidence of Ship Finance.


From the presentations, including the welcome address by NISFCOE Convener, Mrs. Ezinne Azunna, the panel discussion, the screening of Green Waters (a documentary on ship ownership in Nigeria), contributions from these observations emerged that:

1. NISFCOE is a worthy project that should be sustained and strengthened;

2. The shipping industry is critical to the economy of nations, as 90 per cent of developed economies are maritime nations;

3. The shipping industry is peculiar in many aspects, including that it is governed by international conventions, undergoing circles of boom and bust in turns, and that the derivable benefits are based on long-term investments;

4. Ship financing is no charity and the business requires seriousness to yield the expected derivables;

5. Ship financing, like specialised/industry-specific financing, requires not only significant amounts of money, but also involves copious knowledge in the area of financial engineering backed by a solid understanding of the economics of the shipping industry;

6. The Cabotage Vessel Financing Fund (CVFF) is key to shipping development in Nigeria;

7. There are incongruities between Nigeria’s fiscal policies and shipping development, notably on the matters of prevailing strictures on Nigerian vessels intending to work outside of the country, strictures on the export of scraps from ship wrecks and high import charges on vessels;

8. Cost of funds is a major challenge to ship financing, noting that banks are constrained from lending at single digits, inasmuch as these financial institutions do not source funds at single digits;

9. Nigerian shipowners are drowning in debts, arising from the situation that they are not granted any special lending terms in spite of the long-term investment nature of shipping;

10. Nigerian banks are disappointed in the manner NIMASA has handled the CVFF, noting that NIMASA’s failure to disburse the fund had taken the shortlisted primary lending institutions (PLIs) backwards in a situation where many banks had scrambled to be part of PLIs;

11. Without the CVFF, Nigerian banks would be hard-put to support ship financing; and

12. Where there is no fund to acquire new vessels or refurbish existing fleet of security agencies, criminal activities on the waterways will go unchecked;

Arising from the foregoing observations, these recommendations emerged, that:

1. NISFCOE be institutionalised, so it is sustained to serve as a platform for the promotion and sourcing of ship financing, systematic education, training and capacity building, for the development and growth of indigenous ship ownership;

2. The NIMASA Director-General establishes a committee drawn from the forum to seek out funding for Nigeria’s indigenous shipowners, and report progress at NISFCOE 2017;

3. There be the renewal of the initiative of using the CVFF as instrument to expand and strengthen ship finance options available to Nigerian shipping investors;

4. Stakeholders take advantage of the facilitating role of NIMASA towards improving the shipping business environment in Nigeria;

5. Pooling of financial resources and expertise across Nigeria and Africa from the different players of the financial market would promote ship financing;

6. Comprehensive risk backing and equity support from government to help scale up indigenous private sector involvement in the industry would promote ship financing;

7. Integrity is key in accessing ship finance, therefore financial institutions and other business entries must endeavour to effect proper due diligence checks on their clients to check incidences of bad loans and debts;

8. The Central Bank of Nigeria (CBN) should earmark shipping industry intervention fund as Federal Government had extended for a floundering aviation industry;

9. Intervention funding for the shipping industry is germane, particularly in the face of Nigeria’s big drive for agricultural yields and the expected boom in cargoes;

10. Carriage of Nigerian imports on free on board (FOB) terms, rather than the cost insurance and freight (CIF) terms for her exports, would translate to more vessels, with the attendant positive multiplier effects on the banks and insurance;

11. Nigeria must develop sustainable domestic shipping, prior to venturing into deep sea shipping;

12. Ship recycling plants need to be established in-country to add value to the economy; and

13. Nigerian waters can be safer, but this calls for enthusiastic collaboration amongst stakeholders, especially the financial sector, for the acquisition of vessels for security agencies.


This communiqué was adopted this day, Monday, October 31, 2016 at the Grand Ball Room, Eko Hotels & Suites, Victoria Island, Lagos State, Nigeria.

Obiajulu Agu
Nnamdi Eronini


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