In this interview with Oluyinka Onigbinde, the new President of Nigerian Chamber of Shipping; Alhaji Aminu Umar opens up on his plans for the Chamber. He also speaks about the CVFF, shipping and ship ownership in Nigeria
“Some companies that may get CFFF may not even belong to any of the associations”
“The biggest challenge of financing in shipping is fear”
“I have no idea of the stage the CVFF is in”
Congratulations on your recent emergence as the President of Nigerian Chamber of Shipping. What does this mean to you and what should be the expectations of stakeholders?
The Nigerian Chamber of Shipping is a very big organization; it is internationally-recognized. It is part of the International Chamber of Shipping, one of the few ones in West Africa. It is one of the leading organizations today that is championing the creation of the West African Chamber of Shipping. The international Chamber of Shipping has been in existence for over 100 years. I must tell you that being part of the International Chamber of Shipping is something that is very key particularly in the area of promoting shipping business. All praises to the Almighty for giving me the opportunity to be the Nigerian Chamber of Shipping President. I am standing in the shoes of so many giants that have been in that position before; very recognized Nigerians and entrepreneurs who have worked in very top positions both in the private and public sector, such as Mr. Andy Isichei, Vice Admiral Mike Akhigbe, Chief Dapo Sarumi, Chief Femi Otedola, Olorogun, Ibru and the likes. These are all giants that have run this association. I think I am privileged and honoured to be part of the team of these giants that have ran this Chamber of Shipping. So I am very happy and very privileged to lead now.
What should be the expectation of stakeholders about what you are bringing to the table?
The Nigerian Chamber of Shipping has two major responsibilities. The first is advocacy. The advocacy means creating awareness, engaging with our regulators, policy makers and government stakeholders to be able to come together and create an environment for business. Members of Nigeria Chamber of Shipping are mostly people who have invested in shipping and what they want is to create an environment where they can network and be able to do their business with profit and also create an enabling environment for them. Secondly, to engage; so that some policies which are not accommodating to those in shipping business can be looked at it with the policy makers and look at how it can be reviewed for it to be suitable. This is one of my cardinal responsibilities. The second responsibility of the Nigerian Chamber of Shipping is training in the sector. The Nigerian Chamber of Shipping has always been in the forefront of bringing in training modules where people or staff in the industry will benefit. We have been doing those training sessions and we will continue to do more. This time we are trying to see if we can partner with some international institutes, whereby Nigerians can benefit in this part of training particularly on how to run shipping business. This is something we would key into and a lot of us are going to discuss it. That is what is in the forefront of what we intend to push.
Can you be more explicit with the areas you intend to touch?
There are lots of lapses in the engagement side; particularly with our legislators as well as our executives and we have seen that. The Nigerian Chamber of Shipping under my watch with my team will do a lot of networking and engagements. We would look at how we can engage and create this relationship whereby there will be beneficiary relationships particularly in policy making. Today if you look at it, the majority of the shipping investors do not participate in formulation or anything that has to do with policy. We think that is where the problem lies. We should be part of the policy making because the policy affects us. Whatever policy is formulated today, we are the one it affects. That is why we need to be at the forefront to engage them. We want to constantly engage them, so that we can be part of the policy making arrangement particularly in the new government that is coming.
The ships of many ship owners have become moribund, is the Chamber looking at the area of empowerment and engaging with the government regarding the plight of these ship owners?
Sure, we will do that. We are going to engage with the government. That is why I talked about policies. Most of the ship owners that have lost their ships are because there were some policies that did not allow their ships to operate. We want to look into those policies together with the policy makers and see if they can be reviewed. Secondly, we believe that why some of them could not make it or are having issues today is because of some technicality that they are not able to get to or put in place. So what we intend to do with the training and the awareness is to be able to gather some of these our colleagues, discuss how we can look into these technicalities and even show them how to do it properly. We believe that if we engage in those two fronts, we would make a headway. Another issue that the ship owners are having is finance. Majority of them are unable to source for finance. We intend to have a lot of involvement with banks because we want to understand why the banks are not funding ship ownershhip. If we understand the reason, we can now look at how we can make it easy for some of our colleagues who are having difficulty engaging the banks and taking away that fear that the banks are having. We should be able to make it easy for people to source for funds to be able to do their business. That is what we intend to do.
Are you not perturbed that up till now, we don’t have a Regional Maritime Bank in place?
I have been in the discussions of the Maritime bank. I know that it has not started yet. So I don’t know at what level they are. I don’t want to go into it because I don’t know the level they are as a matter of fact. To be honest, I think there are better opportunities. It doesn’t mean if there is no Maritime bank, Nigerian ship owners cannot have access to funds. One of the funds I thought you are going to talk about is the CVFF. One of the intervention funds is the CVFF. There are other intervention funds that ship owners can be able to access from the CBN which has nothing to do with the CVFF. There are funds and opportunities of finance by other big multilateral organizations. Banks like AFREXIM, IFCAFC, and NEXIM. Today, NEXIM is leading the financing and championing the establishment of Sealink which is a shipping company that some investors and promoters are trying to push to be able to become liner service within West African countries. This is something that NEXIM has been anchoring for over so many years. However, there are others, the commercial banks are there. So I think the biggest challenge of financing in shipping is fear. It is not that there are no funds or money. It is the fear the financial institutions are having in the business sector. In the Nigeria Chamber of Shipping, we do a lot of engagement to discuss with all these decision makers in the financial institutions to see how we can be able to remove or reduce this fear. To put together something that can be able to remove the fear from them so that they can be open to financing shipping again. This is because so far, we have fewer banks that are willing or open to shipping financing or investing their money into shipping. So we want to discuss with them and see how we can take away that scare or fear that they have and we see how we can mitigate all the risk factors that they believe are there. So, all these discussions will come. We intend to do it a few months from now.
Talking about the CVFF, there is always a ray of hope for ship owners whenever the government announces its disbursement, but it seems at some point the government has always gone back to sleep.
To be honest, I have no idea of the stage the CVFF is in. But I know they have made a very big step forward. One of it is that they have appointed PLIs. I know that the PLIs are already in engagement with the Ministry of Transportation as well as NIMASA in trying to come up with the proper financing cost that they need to put in place. The truth is that whatever facility you take, there is a cost attached to it and the DG of NIMASA has briefed all the ship owners that he wants to first-of-all, conclude and agree with them on the finance cost, and agree with them on the tenure, and conditions for accessing those funds. So I understand they are still at that position and discussion with the banks. The banks are not going to give everybody their own conditions. NIMASA and the Ministry of Transportation want to have one set of conditions for all the five banks, so that everybody accessing the funds already knows the conditions approved by NIMASA and the Ministry of Transportation. So far, they are still in that conversation. Whether that would be able to be done and concluded before the end of this administration, we cannot tell. We have two months to go. So I won’t be very surprised if they can be able to finish it or it will be the next government that will take over from where it stops. But all that will have to follow the process. But again, I think the NCS first of all is very happy that the Ministry of Transportation and NIMASA have reached this stage. For so many years, they have never reached this stage. The PLIs discussing conditions for disbursement has never happened before. So it is the first time from the commencement of Cabotage that they have reached this level. What we are asking is that we want NIMASA as well as the Ministry of Transportation to also have an engagement with ship owners so that the ship owners will look at the conditions before they sign off on those conditions, so that the ship owners will have a say in it. This is because if we do not put in any of our opinions in it and it is not captured, then it might not work because at the end of the day, the beneficiary of this intervention fund is the ship owner. So if it is not going to work for ship owners, then the ship owner will not be there. Even if they sign off on the conditions for the ship owners, the ship owners have to have their contributions into the discussion. So far we know the ship owners have contributed into the discussion. So, the NCS is open to have these discussions with the Ministry of Transportation and NIMASA anytime they are free to have these conversations, so that we can also make contributions.
We heard from ship owners that they are yet to meet with the PLIs to know the modalities for lending.
I agree with that 100 percent. We are of the opinion that the ship owners should be given the chance to contribute and have the discussion with the PLIs. Not only the PLIs, but the NIMASA and the Ministry of Transportation should be there so that these discussions will be four-way and all of us will put our heads together so that they will be able to adjudicate between the ship owners position and the PLIs taking a stand for the benefit of the industry. This is because if they come up with a condition that is not attainable, then it cannot work. This is an intervention fund. It is supposed to be like a commercial bank fund. The intervention rates and conditions should be far better than the commercial bank rates and conditions. So it should not be that you can get better rates when you go to the bank, while you cannot get the Cabotage fund that you have contributed.
Many are of the opinion that the CVFF has taken so long because there have been divisions among ship owners. Do you agree with this assertion?
I don’t think so, because the truth is NIMASA and the MOT will not give these funds to associations. It is individual companies and some of the companies that may successfully get these funds might not even belong to any of the associations. How does that show that it is because we are not together? We are all in one team. There is nobody in the entire shipping industry today that is saying they should not give the CVFF to anybody. Everybody has supported that it should be given but what everybody is saying is – can we be part of the discussion and be involved in determining the modalities? We have all agreed and we are speaking with one voice. Nobody is speaking against that in any of the associations. You cannot control the number of associations. Tomorrow there can be the Ship owners Association of Port Harcourt or Calabar. Can you say they should not set up? It is not possible. The only thing we can say is we are engaging together, do we work together? Is NCS talking to NISA and SOAN? Yes they are. There is no issue in terms of inter-personal relationship between us. But the truth is CVFF is only given to individual companies not to associations. So no association will go and apply under the umbrella of association and they share the money. There is no way that is done. It is very clear it will give to companies that have made contributions to the CVFF. No association has ever paid a contribution to the CVFF. It is the individual members that have made contributions. Application cannot come from the NCS, but if Sea Transport (a firm) wants to apply, it can apply on its own and the same applies to everybody.
For the sake of this interview, are you a member of SOAN or NISA?
I am a member of Nigerian Chamber of Shipping. To be honest, as you know, I have always been a NISA member and past president of NISA.I have always worked with NISA. I have had a lot of meetings that we go together with the members and Chairman of the steering committee, Captain Taiwo Akinpelumi. I have had reasons to call Engineer Ilori and we have worked together so many times. I have also had reasons to call Chief Isaac Jolapamo; likewise Tunji Brown who we discuss and engage everyday on matters of the industry. Also in SOAN, Dr. Mkgeorge is a personal friend and we have known each other before all these associations. We have been in this industry together before any of these associations was even created. I have great respect for all these guys. They have been in this business longer than me and I am the youngest among them. I’ve always told them I am the next generation. So I am just learning from them to take over from them, when they are ready to retire. We are learning from them, Chief Jolapamo who is a Veteran, Captain Iheanacho, Captain Labinjo, Dr. Onyung, Engr. Greg Ogbeifun, none of them is below 70 today. We hope and pray that we will be able to reach their age. That is our prayers, to reach their age and be as young and strong as they look. There is no issue. Yes there are many associations and the news we see on the newspapers of members fighting each other. That is always there, but we are all facing the same problem. We are in the same environment. Whatever is happening to Mr ‘A’ is happening to Mr ‘B’. We cannot shy away from that. Just as you said, there are many of our colleagues who have lost their business because of issues within the business environment. I think there is opportunity to see how to intervene and revamp those businesses. It is something that can be done. There are others who are also coming in. We should not always restrict ourselves to think it is only the people operating in the business of this sector will always continue to be the ones. There are new people coming in. Every day, there are people who buy ships.15 years ago; the number of vessels owned by Nigerians is not what we have today. The industry is growing. Yes there are the ones who used to be there that are no longer there, but there are new people every day. There is a company that started in Nigeria as a shipping company and today it is an international company that owns over 50 vessels operating internationally and the origin of that company is Nigeria. It started in Nigeria and today, it is a UK company. The investors came together and I am saying this out of experience because I am part of that company. I am the founder of that company. It is not a company I am running today; it is bigger than me and my own company today. But I am proud to say it originated from here. You can originate from here and be an American company or an international company at the end of the day. That is what everybody is promoting. The shipping company is an international company. The goal and target for every shipping company is to be international and I am telling you today that there is a company that has been brokered locally and have gone international. It is a force to reckon with in the world of shipping but it started here. We should not say that there is no growth. There is growth in the industry. There are Nigerians today that owns VLCC which is a vessel that can load 300,000 tonnes. It is not a small vessel. It is high like a seven storey building which is owned by a Nigerian. 15 years ago, no Nigerian owns that. Today Nigerians own FPSO. However, there is need for more growth. One of the issues we have is funding; that is investment capital to be able to buy more vessels is very difficult in Nigeria. Yes there are companies who have moved internationally, but they were able to structure their business in such a way that they can access international funds. Yes the owners are not Nigerians, but international people but they originated the company from here. This company started in 2000 and in less than 23 years they are where they are today.
If you are to set an agenda for the next administration, what do you think should be the focus as regards the maritime sector?
The new administration should first understand that there are lots of opportunities in the maritime sector, especially the opportunities to create jobs. Nigeria needs any kind of intervention or policy change that will create jobs. There are a lot of young Nigerians who are looking for jobs to do and shipping is one of the sectors that can give those jobs because we have seen it in many countries. We have seen it in the Philippines, England, Bangladesh and other Asian countries. So the government should look into the policies that are affecting a lot of things and other things that will be discussed with them to be able to create jobs. Secondly, they should recreate a lot of business economic growth. I just gave you an example of an international company that originated from Nigeria. Because the owners of these companies are foreigners they have moved the company to where they are originating from and it has developed to the biggest company I just told you about. Imagine if this company is a Nigerian company; that means whatever they are making; the environment is big enough to take up 20 or 30 of these companies. If Nigeria is able to take on that, imagine the kind of money that will flow into the country. Apart from the job creation, there will be a lot of money coming into the economy because all these ships are earning freight that will come to the Nigerian economy. These companies are paying tax to the Nigeria economy system too. The company was moved to the UK because of our environment here. You may start up but as you grow, the environment is harsh because the institutions and narratives are there. All these, put together affect the entire business most particularly the finance and finance is very key in business. That is what we intend to discuss with the new government and we hope to engage to be able to let them see these things and see how they can look into the policies and see how they can support the industry.