Indigenous ship-owners have blamed the high interest rates charged by Nigerian banks for hampering the development of the country’s shipping sector.
They stated this during the quarterly seminar of the Nigerian Association of Master Mariners (NAMM) held at the weekend, in Apapa, Lagos, with the theme: “Cabotage Financing.”
Former Minister of Interior, Emmanuel Iheanacho, who is also the Chairman of Genesis Worldwide Shipping, lamented that Nigerian banks’ high interest rates had been inimical to the development of the shipping sector.
Iheanacho said that while banks in other countries charge about four per cent interest on loans to ship owners, some Nigerian banks charge as high as 16 per cent.
He listed some of the major commercial banks that offer acquisition loans in Nigeria to include Zenith Bank with 10-15 per cent interest rate yearly; Guaranty Trust Bank (GTB) with nine to 14 per cent; First Bank with 10-16 per cent and United Bank of Africa (UBA) with 10-16 per cent charge.
Iheanacho said that banks in Nigeria lack sufficient knowledge of the shipping sector, and are therefore not sufficiently equipped to grant loans for the acquisition of ships and other critical maritime assets.
He said the high interest rate charged by the banks had made it difficult for indigenous ship-owners to acquire vessels and be competitive under the Coastal and Inland Shipping (Cabotage) Act 2003.
Iheanacho said that the success of the Cabotage Act had been hindered by many factors, including high interest rates, short loan tenors, risks perception by banks, ship financing expertise, foreign exchange fluctuations and limited access to international funding.
Also speaking, President, Nigerian Association of Master Mariners (NAMM), Tajudeen Alao, called on the Nigerian Maritime Administration and Safety Agency (NIMASA) to stop pocketing the three per cent levy it collects on cabotage operations.
He said two out of the three per cent levy is meant to be warehoused into the Cabotage Vessel Financial Fund (CVFF) account for shipping development but has not been used for the purpose.
Alao, however, called on the Federal Government to immediately commence the process of disbursing the CVFF to Nigerian ship-owners to enable them to acquire ships.
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