Follow Us on Google
By Steve Agbota
Indigenous shipowners under the aegis of the Nigerian Shipowners Association (NISA) has concluded plans to create a $500 million maritime fund in conjunction with foreign financiers to acquire asset to grow local fleet.
A member of NISA and chairman of the defunct Nigerian Maritime Expo (NIMAREX), Ayorinde Adedoyin, said the fund, which is expected to come into fruition next year would be loaned out to operators at a single digit interest rate.
“What the fund is meant to do is to encourage Nigerians to bid for jobs and when they win, the fund will buy the asset on a five -year loan at a single digit interest.
“We have been working on it for almost five years. What we are trying to do is to be able to pull money together like $500 million and I think we are almost getting there. What the fund will do is that it will acquire assets for operators, not only vessels but other ancillaries of the shipping industry and they can own it and it can be leased to them for about five to seven years and afterwards when they finish paying, the assets become that of the original owners,” he said.
According to him, the fund will serve as an alternative that would help increase capacity of indigenous shipowners beyond the Cabotage Vessel Financing Fund (CVFF), which operators have been unable to access for the past 18 years.
“It is not all about CVFF, we too are actually thinking and we pray that by early next year, the maritime fund should come into fruition. We realised overtime that the cabotage law without funding is like a waste of time. Everybody was hoping that the CVFF will be used to empower shipowners to acquire more assets but that has not happened. But the truth is, there is a limit to what CVFF can really do,” he added.
He said that is the idea behind looking at partnerships with foreign investors to put funds together with a minimum of about $500 million as this can actually help local shipowners with one digit interest rate.
“If we are not getting two or four percent like the foreign shipowners, at least if we are getting seven or eight percent it is still better than the 23 to 25 percent that we will be getting from the local banks which is part of why most of the shipowners in Nigeria can’t grow and why so many of them have lost their fleet because Nigerian banks don’t understand maritime funding.
“I don’t blame banks really, they can only use money that they have and in most cases, greed also comes into play because the majority of them still get this money at two to three percent but the funny thing is that they give the money out at about 12 to 13 percent. So why make a spread of about 10 percent on the money that you are borrowing?” he queried.
