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Nigeria loses N13.5b annually to neighbouring countries for dry docking

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By Godfrey Bivbere
Nigeria is losing about N13.5 billion ($90 million) annually to its neihgbouring states through the movement of its vessels dry docking to meet the International Maritime Organisations (IMO) requirement, Director General of the nation’s apex maritime regulatory agency, Mr. Temisan Omatseye, has said. Disclosing this in a chat with Financial Vanguard in Lagos recently, Omatseye explained that there is a huge investment opportunity for ship repair and ship building in the country presently that is not being exploited.

The said that it cost between N45 million and N75 million ($300,000 to $500,000) to dry dock a vessel and that approximately 200 to 300 vessels go to Ghana, Duala and Robins Bay for dry dock annually. According to him, “Each dry dock cost the ship owner between $300 to half a million dollars each trip. If you can dry dock a vessel at $300,000 for dry docking for 25 days and if you have two docks a month that is $600,000 every month.”

“You can imagine having over 3,000 vessels (in Nigeria ); they have go for dry dock. It is a requirement by the IMO standard that a vessel goes for dry dock once every three years, and if you dock 200 to 300 vessels once every year at $300,000 per dock, you can then imagine how much it will come to.”

The NIMASA boss explained that it is not true that the investment environment is not conducive, further noting that the above has not only showed that there are business opportunities but that government is willing to assist whoever want to exploit the numerous advantages in the industry.

He pointed out that the federal government through the apex regulatory agency is willing to grant tax holiday and other incentives to investor coming to the sector.
On claims that the agency is not doing enough of enlightenment to inform potential investors of the opportunity available, is said it is untrue because he had told operators in the oil sector to reserve some aspect of their operations to Nigeria in line with the Cabotage law but he was disappointed that Nigerians are not coming forward.

Similarly, in its efforts to develop the shipbuilding sector of the Nigerian Maritime industry, Omatseye said that the agency has concluded arrangements with a Dutch firm to establish Africa’s first Ship recycling facility in Nigeria .

He disclosed this during a presentation to NIMASA by representatives of the Southern African Shipyard (SAS) who were in the country to explore the possibility of establishing a Shipyard in Nigeria. He stated that the exact location for the Ship recycling facility is the only challenge being sorted out by the Agency and further pointed out that the construction work should commence by the fourth quarter of this year.

The NIMASA helmsman expressed optimism that the project will have a positive multiplier effect on the Nigerian maritime sector.

IFC invests in Africa’s first Micro-finance debt fund to help improve access to finance
IFC, a member of the World Bank Group, announced today that it will invest in the first fund focused
exclusively on lending to micro-finance institutions in Africa, strengthening the region’s financial architecture and improving access to finance for smaller businesses.

IFC will invest $8 million in the Regional Micro, Small, and Medium Enterprise Investment Fund for Sub_Saharan Africa and provide a further $5 million to help the fund hedge its foreign currency risks. REGMIFA is expected to mobilize approximately $150 million from international agencies and development finance institutions.

The fund will provide local currency loans to smaller banks, non_bank financial institutions, and commercially oriented non_government organizations that serve micro and small businesses, many of which of which struggle to fund themselves in their own domestic currencies. It will also provide advisory services to help investees mitigate risks and expand their products and services. REGMIFA is being led by KfW Development Bank on behalf of the German federal government, supported by substantial technical input from IFC.

Gudrun Kopp, Parliamentary Secretary of State at Germany’s Federal Ministry for Economic Cooperation and Development (BMZ), said: “This innovative fund for the first time provides micro-finance institutions across sub_Saharan Africa with a broad range of financial instruments. It will enable micro-finance institutions to finance about 300,000 companies over the next five years and to create and secure 500,000 jobs, a significant contribution to both poverty reduction that will help alleviate the effects of the economic crisis in Africa.”

Other potential investors in the fund include Austrian Development Bank, Belgian Investment Company for Developing Countries, the European Investment Bank, French Development Agency, Netherlands Development Finance Company, Norwegian Micro-finance Initiative, and the Spanish Development Cooperation Agency. Over time, it also aims to attract private investors.

Difficulty accessing finance is a key constraint to Africa’s private sector. By improving the ability of low_income populations to access funds to start or expand businesses, REGMIFA will help create employment and reduce poverty in some of Africa’s least developed regions.

Jean Philippe Prosper, IFC Director for Eastern and Southern Africa, said, “Supporting the growth of micro and small enterprises is a strategic priority for IFC in Africa. By providing local currency financing and advisory services to micro-finance institutions, REGMIFA will significantly improve access to finance for entrepreneurs across Africa, helping to create employment and reduce poverty across the region.”

REGMIFA will be managed by Symbiotics SA Information, Consulting, and Services, a Geneva_based investment manager and advisor specialized in Micro-finance. It will initially focus on more developed micro-finance markets, including Ghana, Kenya, Nigeria, Tanzania, and Uganda, expanding into Central, West, and Southern Africa after its first year.

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