Regional maritime bank: Scramble for headquarters as Nigeria dithers
• Stakeholders Say It’s Not Priority
Countries in Central Africa, particularly the French speaking, are believed to have joined in the race to host the sub-regional maritime bank headquarters approved for Nigeria by 25-member countries of Maritime Organisation of West and Central Africa (MOWCA) in 2008.
The idea to establish the regional bank was mooted at the Bureau of Transport Ministers’ meeting in Angola in 2005, when Nigeria was tipped to host the headquarters. The approval for Nigeria to host the banks’ headquarters was ratified at the 13th General Assembly of MOWCA in Dakar, Senegal, in July 2008 after which the late President Umaru Yar’Adua approved it in February 2009. All the approvals were sealed at the 14th General Assembly of MOWCA on August 2011 in Kinshasa, Democratic Republic of Congo.
Since then, calls have been made to the Federal Ministry of Transportation and the Federal Government to provide ‘financial commitment’ essential for the bank’s take-off. The delay, according to reports, is due to lack of pre-incorporation funds, which would form part of Nigeria’s equity contributions to the bank’s project.
Nigeria conveyed its acceptance to host the bank to the MOWA Secretary General on February 25, 2009, when the Director of Maritime Services at the Federal Ministry of Transport wrote to say “Further to the receipt of your letter Ref. No MTA/BA/KG dated 20th May, 2008 and … in respect of establishment of regional Maritime Development Bank’s headquarters in Abuja, I am to acknowledge receipt of same and convey the approval of Mr. President/Commander in Chief of the Armed Forces of the Federal Republic of Nigeria, Alhaji Umaru Musa Yar’Adua for the establishment of the bank.”
After accepting to host the bank headquarters, MOWCA then asked Nigeria to provide a project secretariat with relevant logistics that would facilitate the takeoff; the draft headquarters agreement, identity and appointment of suitable consultants and draft of a charter for the bank, taking into consideration banking laws and regulations currently in force in Nigeria and the sub-region.
According to sources, the organisation actually strategised with the Nigerian Ministry of Transport, Foreign Affairs, Justice and Central Bank of Nigeria (CBN) to work out the modalities and agreement for the establishment of the bank.
But recently, a maritime expert, who was part of MOWCA’s committee that conducted feasibility studies on the establishment of the bank in Nigeria, raised alarm that some countries in Central Africa were aligning to jostle for the hosting of the bank headquarters, since Nigeria has failed to actualise the 25 African countries’ vision.
He said the French speaking countries in MOWCA were aligning to have it sited in the Democratic Republic of Congo.
He, therefore, urged Nigeria not to allow the opportunity slip away, since it is more advantageous to have the bank in the country.
Said he: “The bank will serve 25 countries, but Nigeria is the best place for its headquarters. Nigeria has the cargo traffic. More than 80 per cent of cargoes in the sub-region are generated in Nigeria, which also has the population and good geographical location to retain the secretariat of the regional maritime bank.
“The countries came into the race because of Nigeria’s inability to provide the necessary leadership conceded to it by member countries.”
Authoritative sources said though Nigeria accepted to host the Maritime Development Bank, it, however, failed to appoint a coordinator to drive it after providing the secretariat, a duplex for which it paid a two-year rent.
It also recommended the engagement of Messrs KPMG and BGL/NEXTON as financial consultants and Olaniwun Ajayi as legal consultant. The liabilities to the consultants, having been negotiated, were supposed to be underwritten by the Nigerian government, as part of its equity contribution to the bank.
Besides the move to enlist consultants, the Nigerian government, after securing accommodation for the proposed bank, went ahead to recommend one Chief Chris Orode, a Chartered Accountant and Maritime expert and leader of MOWCA group of experts on the feasibility of the regional Maritime Bank, to be the acting head of the secretariat project.
The Nigerian government did not implement this recommendation, apparently because it was not willing to commit itself financially, as no definite arrangement was made for the salaries of the secretariat staff.
Maritime stakeholders applauded the concession of the bank’s head office to Nigeria, but are worried why steps have not been taken to actualise the dream.
The President, Association of Nigerian Licensed Customs Agents (ANALCA), Prince Olanrewaju Shittu, said Nigeria might no longer be able to provide the needed fund for such a regional project because of the current economic crisis.
He believed that other countries would expect Nigeria to buy the greatest shares in the bank, as they are currently doing to ECOWAS Trade Liberalisation Scheme (ETLS), which Nigeria is wholly funding.
“The idea of a regional bank is good, but if it is going to be multinational in nature, what is the capital base and what is the shares structure like,” he queried. “If it is going to drain the little resources we have now, it will not work. Maritime operators will benefit from it because of the access to loan for ship acquisition and others, but Nigeria may not be able to carry it on its shoulder because she will end up to be the greatest financier of the bank. That is what is happening with ETLS, which Nigeria is the sole financier. So, Nigeria should forget it if it has no resources, unless the countries in the region can come together to provide the fund, which I doubt will happen.”
Chairman of Shipping Association of Nigeria, Mr. Val Osifo, said although it is a good idea to host the bank headquarters, but he doubts if that should be one of Nigeria’s priorities for now, especially in view of the current economic crisis.
“All countries in the region will be looking up to Nigeria to finance the bank. However, it is a good idea, if only we can put certain things in place,” he said.
According to him, for Nigeria to derive any benefit from such investment, there would be need to implement the local shipping policy properly for the multiplier effect that could be beneficial to the economy.
“We will need to implement the Cabotage policy properly for indigenous shipping operators to have full rights and access to coastal cargoes,” he explained. “If that happens, its multiplier effect will be seen in areas of employment generation, expansion in capacity by shipping companies and tonnage. The country will become a hub of maritime activities, as they continue to expand in shipping capacity. If we don’t do that, and we set up maritime bank, any expectation from such investment will be futuristic.”
In his view, maritime nations in the sub-region are currently competing for cargoes, hence the increase in the draft of their port channels to accommodate larger vessels. “If, as they are doing so, Nigeria remains where it is, it will not be able to cope with competition and they will begin to transship cargoes to Nigeria from their ports,” he said.
But to Otunba Kunle Folarin, Nigeria has no business in regional maritime development bank. Rather, he advocats the establishment of the industry-based Nigerian bank, such as, the Bank of Industry, Agric Bank and Mortgage bank, among others.
According to him, Nigeria is not on the same level with any of the countries pushing for the bank’s establishment, as there could be tendency for them to rely on Nigeria for the financing of the proposed bank.
Folarin, who is the chairman of Port Consultative Forum, denied allegations that Nigeria failed to provide the necessary leadership needed for the takeoff of the bank.
“Nigeria secured a secretariat for the bank, appointed consultants, but the failure to take off is based on the inability of MOWCA member countries to adopt the general principles for the bank’s administration. There should be a monetary instrument that should be adopted by member countries parliament. There must be conditions and fiscal policy that is legal. Other member countries are not subscribing to the bank and they also failed to adopt general principle for the bank’s administration,” he said.
“Is Nigeria going to fund the bank? If so, it should provide the personnel to run it. The coordinator should be given job prescription. Nigeria is simply saying, ‘he who pays the piper dictates the tune.’ The conditionality of running the bank should be put in public domain. We should have our own maritime bank. We have industry-based banks like Bank of Industry, Agric Development Bank and Mortgage bank. We have no business in regional banking because the partners are not equal.”
The Maritime Organisation of West and Central Africa (MOWCA) is an intergovernmental regional organisation comprising 25 countries in the West and Central African sub-regions. The countries are: Angola, Benin, Burkina Faso, Cameroon, Cape Verde, Central African Republic, Chad, Republic of the Congo, Democratic Republic of the Congo, Cote d’Ivoire, Gabon, Gambia, Ghana, Guinea, Guinea-Bissau, Equatorial Guinea, Liberia, Mali, Mauritania, Niger, Nigeria, Sao Tome and Principe, Senegal, Sierra Leone and Togo.