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Why FG dropped Nigeria’s maritime bank plan for regional initiative

By Adaku Onyenucheya
23 March 2022   |   4:04 am
The Federal Government has revealed that the establishment of the proposed Maritime Development Bank of Nigeria (MDBN) could send the wrong signal to the Maritime Organisation for West and Central Africa...

The Federal Government has revealed that the establishment of the proposed Maritime Development Bank of Nigeria (MDBN) could send the wrong signal to the Maritime Organisation for West and Central Africa (MOWCA) member states that are already committed to the formation of the Regional Maritime Development Bank (RMDB).

The government recently dropped the proposed MDBN to support the establishment of the RMDB, with headquarters and presidency ceded to Nigeria by the MOWCA 25 member states.

The director of Legal Services, Federal Ministry of Transport, Pius Oteh, stated this at the just concluded public hearing on the amendment of the Nigerian Maritime Administration and Safety Agency (NIMASA) act,2007; amendment of the Inland and Coastal Shipping Act and the repeal of Merchant Shipping Act, 2017, by the House Committee on Maritime Safety, Education and Administration headed by Linda Ikpeazu.

Oteh said the entire members of MOWCA, in 2011, agreed to have a billion-dollar capital base for the bank.

The lawyer also disclosed that the shareholding of the RMDB has been shared amongst MOWCA members with Nigeria taking the highest of 12 per cent.

‘‘There is an agreement that dates back to 2011, where the Transport Ministers in West and Central Africa approved and ratified the various governments of the Maritime Organisation for West and Central Africa. But for some period, there was no serious follow up on these decisions until about four years ago, we have re-energised this process.

‘‘Countries have signed the charter to the bank and we have enough countries to activate the process of the bank, as at this time processes are going on.

‘‘The headquarters of the bank will be in Nigeria, the other 24 countries have conceded to that and they have also agreed that a Nigerian will be the President of the bank. But it is going to be a Private-Public sector-driven Bank. The states in the two sub-region of West and Central Africa collectively have 51 percent of the shareholding of the Bank given to the MOWCA states and these shares were allotted to them based on volume of trade and so, naturally, Nigeria has the lion’s share of 12 percent and the other 49 percent will be for institutional investors,” he explained.

He said the African Import-Export Bank (AFREXIM) has shown a lot of interest, with a lot of institutional investors, particularly within member countries who want to be part of the bank.

He said the Secretary-general, MOWCA, Dr. Paul Adalikwu, who is a Nigerian, has been given the mandate to follow the process and ensure that the bank takes off as quickly as possible, hopefully within this year.

Oteh noted that the Federal Ministry of Transportation is currently engaged in discussion with the Central Bank of Nigeria (CBN) for some assistance concerning office spaces and other things required to run the bank.

‘‘The point we are making is that having gone that far, having reached an agreement with sister countries in the two sub-regions, we will like to continue and conclude that process as quickly as possible and pushing ahead with the Nigerian initiative is likely to bring a wrong impression that we are no longer fully committed to the Regional Maritime Development Bank; that is why we used that language that we should step down the Nigerian initiative and at the appropriate time, there is nothing wrong in having a domestic Maritime Development Bank, he said.

Oteh, however, added that, given how far the Regional Maritime Development Bank has come and properly structured, the bank will give Nigeria a wider playing field and more access to funds in terms of pulling resources from 25 countries instead of from a single country.

“So we think it is an initiative we should pursue to conclusion before we take up any new initiative. We are looking at one billion Dollars as the capital base of the bank,” he added.