Nigeria urged to float ship leasing company as CVFF described not sufficient for ship acquisition

Minister of Marine and Blue Economy Adegboyega Oyetola

The hope of Nigerian indigenous shipowners of securing loans for vessel acquisition through the Cabotage Vessels Financing Fund (CVFF) may not be materialised as expected as the financial liquidity in the CVFF is said not sufficient to buy one new ship.

Instead of counting on the CVFF, the Federal Government of Nigeria is therefore advised to take a cue from the United Arab Emirates (UAE) aircraft leasing company and float a ship leasing company.

Through the ship leasing company, which can be funded by CVFF, ExximBank and other financial institutions, Nigerian shipowners can buy new ships from major ship building companies around the world at negotiated and discounted rates payable over a period of time.

A former director general of Nigerian Maritime Administration and Safety Agency (NIMASA), Barrister Temisan Omatseye, gave this counsel while speaking at an event in Lagos organised by African Shipowners Association (ASA) Nigeria to showcase its scorecard for 2024 and future growth plan for 2025, last week.

The theme of the event was ASA Nigeria Scorecard: Shipownership Opportunities & Our Future Growth.

Barrister Temisan Omatseye, who said ship acquisition is not a difficult thing but getting contract is difficult, noted that the current amount in the CVFF has been depleted by high inflation and unstable forex and cannot buy a ship.

“Funding of vessel is not a difficult thing but where is the contract? Cargoes are available but getting contacts is the problem. The CVFF cannot work. This is because the current amount of money in the CVFF has been depleted by inflation and cannot buy a single vessel.

“There is money outside there. We can copy the United Arab Emirates (UEA) aircraft leasing company that buys new aircraft for Emirates Airlines, a UAE national airline, at discounted rates which are payable over a period of time. Such a ship leasing company can be funded by CVFF, EximBank and other financial institutions,” said Omatseye.

Speaking further, the former NIMASA director general informed that the Africa Continental Free Trade Agreement (AfCFTA) cannot work until African countries take control of their maritime domains.

Omatseye said the aviation industry is working because of the quality leadership provided by the Minister of Aviation and Aerospace Development, Festus Keyamo, who takes along all aviation and airline CEOs on business trips. He urged Minister of Marine and Blue Economy, Adegboyega Oyetola, to copy Keyamo’s style and take along indigenous shipping CEOs on business trips.

Speaking earlier, Ms Funmi Folorunso, Secretary General of African Shipowners Association (ASA) continental, said Nigeria could lead in shipownership in Africa “if we work together. We have abundant human and maritime resources. Our shipowners should be interested in trade within African coast lines. We are not interested competing with the likes of COSCO.

“Nigeria should take its leadership position in shipping in Africa by dictating the pace. We are leader in terms of fleet. We have intellectual capacity which we can export to other African countries. Nigerians are in leadership positions in many financial institutions in Africa and the world globally. This should be an advantage for us to fund our ship acquisition.”

Folorunso allayed the fears that ASA is in competition with Nigerian Shipowners Association (NISA) and Ship Owners Association of Nigeria (SOAN). She noted that ASA is a continental body and interfaces with governments, maritime/shipping administrations and others on growth of shipping in the continent.

While contributing, Captain Kunle Olayiwola, African first Chartered Master Mariner, said the Blue Economy Policy of President Bola Ahmed Tinubu is commendable but would not work if it is not piloted by experts.

“The Blue Economy is a technical field and requires experts to drive it. I implore the Minister of Marine and Blue Economy, Adegboyega Oyetola, to allow experts in various fields in the industry to run the economy. If it is left in the hands of unqualified people, Nigeria will not achieve the purpose behind the policy,” Captain Olayiwola submitted.

In his welcome address, Captain Ladi Olubowale said ASA has a key role to play in shaping the development of shipping in Africa, noting that ASA Nigeria would work with the Nigerian government and all stakeholders to grow shipping activities here in Nigeria and Africa.

Outlining the plans of the association against 2025, Olubowale informed that the association will grow its membership from its present number and collaborate with all government agencies and other associations in the country towards success of Nigerian shipowners.

Several papers were presented at the event. Captain Arterm Postnikov who represented Managing Director of Arion Energy Service Limited delivered a paper on Ship Technical Management. Captain Ladi Olubowale, President of ASA Nigeria and Managing Director of Seamate Maritime Integrated Services Limited, spoke on West Africa Coastal Shipping and Opportunity Outlook. Mr. Aanuoluwapo Agbola, CEO of Dukeridge Nigeria Limited, delivered paper on Code Supply Value Chain Opportunities.