Maritime sector mulls single digit facility for asset financing

There are high expectations that the maritime sector would soon get approval for single digit interest facility to support operators in the Nigeria’s maritime industry.

Director-General, Nigerian Maritime Administration and Safety Agency (NIMASA), Dakuku Peterside, who raised the hope for a new financing scheme during the official visit of the Managing Director of the Bank of Industry (BOI), Olukayode Pitan, to NIMASA corporate headquarters in Lagos, said he could see light at the end of the tunnel.

The credit facility is meant to help in the procurement of maritime assets,to put operators in a position to compete favourably with their foreign counterparts.

Dakuku, who received the BOI delegation, said the meeting with NIMASA was a follow-up to the Agency’s efforts to ensure that Nigerian players are competitive in the global maritime arena.

He said, “We have continuously sought partnerships that would grow our industry. We know that maritime asset financing is one of the major challenges of this industry, and we are tackling it head-on. In no distant future our people would be able to reap the benefits of our strategy.”

Speaking, Pitan commended the NIMASA management led by Dakuku for its various transformative initiatives in the maritime sector. He said the initiatives have brought renewed confidence in the maritime industry, and BOI is ready to partner with NIMASA because the viability of the sector would rub off on the entire economy.

Pitan disclosed that BoI haS an existing financing model in partnership with the Nigerian Content Development and Monitoring Board (NCDMB), which could also benefit the maritime sector if applied.

He stated: “We are proposing a partnership with NIMASA on vessel financing. We already have a similar partnership with NCDMB that is currently running at a single digit of eight percent, with little or zero risk for NCDMB, since the fund invested by NCDMB is guaranteed by BOI. This model, we think, can also benefit NIMASA and the entire maritime sector.”

At the end of the meeting, NIMASA and BOI agreed, among others, to work out modalities for financing the acquisition of vessels at a single digit interest rate; provision of guarantee for the funds that NIMASA will entrust to BOI; and management of the portfolio to guarantee effectiveness.

Recall that the management of NIMASA has consistently advocated a single digit interest rate on borrowings to assist in the acquisition of maritime assets.