Frontline maritime industry stakeholder; Capt Greg Ogbeifun recently spoke with some journalists on the sideline of last week’s African Shippers’ Day in Lagos. Joshua Yousouph, who was there presents herein, excerpts of the media chat.
What do you think the maritime industry can benefit from the African Continental Free Trade Agreement?
The essence of AfCFTA is to encourage trade among African countries. One of the ways of trading within ourselves among others is by sea. That means that, ship ownership, ship financing, ships repair and everything that surrounds ships will participate in that trade. That economic activity already generated is not only for the industry, but also the nation because it is adding to the GDP of our nation; not only in our nation but all other countries in Africa that have seaports within the Continent maritime trade. When we talk about ships, we need to talk about ports, because the ships operate in the ports. All the port activities and everything relating to port activities generate revenue and employment and adds to the country’s GDP. If you look at maritime, there are other stakeholders that are related to maritime; you talk about maritime lawyers, marine insurance and others. This is another sector that will become active and the economic activities there benefit the country, players and the industry. So the AfCFTA has a lot of opportunities. I have only limited my answer to maritime.
But like I said, the AfCFTA also deals with inter-African countries air connections; we have cargo ports. The same thing that affects maritime affects the aviation industry too. We have the air transport, aircraft purchase, airport, aircraft insurance, and regulations for the aeronautic industry. As for the road, for a long time you trade between our neighboring countries particularly, Benin Republic; 95% of which is illegal activities; such as smuggling, which is by road. If properly monitored, regulated and controlled it is such a huge source of revenue for most countries. We have the Immigration and Customs officers on the way, we have drivers plying the road. So the AfCFTA had been going on for a long time particularly by road, sea, air and rail. What we are now trying to do is to regulate the activities, bringing it under proper standard, so that all the countries can benefit. Before now, if you’re carrying your cargoes by road from Nigeria, when you get to Seme border, the law changes. But we’re looking at removing all the trade barriers between the countries. This means once you meet the regulations in Nigeria, then it authorises you to any of the African countries without changing the Law.
Many ship owners have considered the conditions for the disbursement of CVFF as the Federal Government setting landmines to hinder the disbursement. What’s your take on this?
The first question to ask is that the people who are talking, are they ship owners? If they are, let them tell us the ship they own that is working. Anyone talking about 15% equity is ignorant. They don’t know what they are talking about, because if they know about the CVFF Act, they will not be talking about 15 percent. In fact they will not be talking about sharing the money which is what they are arguing for. The law governing the disbursement of the Cabotage Vessel Financing Fund says the Minister of Transportation has the responsibility to come out with the guidelines for the disbursement of the Cabotage Vessel Financing Fund. The only guideline existing was established during the era of Idris Umar as former Minister of Transportation and I remember Mfon Usoro was the Director General of NIMASA at that time. So working with the NIMASA administration then, the Minister then was able to come out with the guidelines which is existing. That guideline amongst other things said that the CVFF will bring 50%, it is not even what they are reporting now. They reported that it is 35%; which is wrong. The government will bring 50% of what the borrower wants. The Primary Lending Institutions (PLIs) will bring 35% at an interest rate below 10% and then the borrower must contribute 15% of the money wants to borrow as equity. Most importantly, the law says that as a Primary Lending Institution, must guarantee the government through NIMASA that the borrower will be able to perform and pay. The PLIs agreed to bring 35% at the interest rate given to them by the government. They also agreed to guarantee the borrower. So one of the primary responsibilities of the Primary Lending Institutions is to look at the borrower who must be able to meet all the conditions that will enable them to benefit from the disbursement. So you must have means of payment which can be either a long-term contract that can amortize what you want to do.
Secondly, your organisation must be properly structured and meet the corporate governance that will give the bank the comfort to guarantee you. How many those people talking have Contracts or Crediting history. The banks as at that time could guarantee some of their customers. Taking Starz Maritime as an example which was number one on the list as at that time. Starz had a five-year contract to provide a ship at a rate. So the bank took that contract and analysed the revenue. They looked at Starz and their credit history and decided to guarantee Starz. Also, the CVFF was warehouses in those banks that is the PLIs as at that time. So they had the money, they were trading with the money and making profit from the money. It is the profit they were making from the money that gave them the confidence to tell NIMASA that they will provide 35% at their interest rate.
During my period as the President of the Ship Owners Association of Nigeria, on every occasion I hear the honourable minister then speak on the CVFF, I take the microphone and tell the world that the law says the honourable minister should come up with the guidelines of the disbursement of the CVFF
The Honorable Minister at the launching of the book of the present DG in Abuja, I challenged him and told the audience to beg him to come out with the guidelines, so that the CVFF can be unlocked because the regime now is TSA and the honorable minister of Transportation theN; Rotimi Amaechi being who he is, told some of us to follow him to the office at that day. Myself, Dakuku Peterside who was the then DG of NIMASA, Aminu Umar and Margaret Orakwusi followed him to his office and he founded that committee. He asked us to educate him on a new guideline for the disbursement and we did. We worked and presented the guidelines to Dakuku Peterside (the then DG of NIMASA). We made consultations with NCDMB, BOI and the likes. Now the money is with the government, the government should feel confident to bring it out and make sure that it is disbursed. We made that submission, so the question is to ask NIMASA where the submission is; because it never saw the light of the day.
What is your take as regards the coming together of NISA and SOAN as one body?
Who is NISA? Is it the Aminu’s faction or Jolapamo’s faction or Labinjo’s faction? I don’t want you to waste my time. First of all, when I read the newspapers I see names of people I’ve not even heard of; parading themselves as ship owners. I don’t know who he is, there are many factions of NISA.
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