THE Nigerian Association of Master Mariners, NAMM, has said that banks currently operating in Nigeria lacks the financial capacity to grow the local shipping industry hence the need to look at other options for vessel financing in country.
Speaking at the last quarterly meeting of the NAMM held at its Secretariat in Lagos, former Minister of State for Interior and retired Ship Captain; Mr. Emmanuel Ihenacho said that the dynamics of vessel financing has gone beyond the methods Nigerian banks deploy to such ventures.
Ihenacho also said that the interest rates charged on loans by Nigerian banks for vessel purchase is the highest compared to other climes adding that until the rates are brought down local ship operators will continue to source funding for vessel acquisition to finance purchase of ships.
He explained that besides the issue of limited access to funding, short loan tenors, collateral requirements, risks perception by banks, limited shipping finance expertise, corruption and bureaucratic hurdles and foreign exchange fluctuations have remained some of the challenges local shipping operators and owners are currently grappling with.
According to him, the local shipping industry and Nigeria’s Coastal trade is still being controlled by foreigners thereby limiting the opportunities for indigenous players.
He advised that the government should take advantage of the Cabotage Act and address the concerns and challenges facing indigenous shipping industry adding the Nigerian Maritime Administration and Safety Agency to increase its Cabotage compliance level
He said: “In terms of economic losses, the country lost and is still losing significant revenue and jobs due to the absence of a robust indigenous shipping industry.
“If we had control of our own shipping, if we participated in the movements of goods, we can negotiate the freight rate of the carriage of our cargoes but because we are dependent on foreign vessels for the carriage of our international trade.”
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