Rober Orya, CEO - NEXIM
Disturbed by the high intra-regional freight costs and shipment delays which make cargo delivery within the West and Central African sub-region take an average of 45 to 60 days, the Nigerian Export and Import Bank (NEXIM Bank) is facilitating the establishment of a private- sector driven regional shipping line with $60m(N9.6bn) to make the intra-regional trade seamless and competitive as well as reduce the logistics cost identified as one of the highest in the globe. NEXIM bank is the trade policy bank of the Federal Government.
The Managing Director and Chief Executive Officer (CEO), Mr. Robert Orya disclosed this last week in Abuja when the National leadership of the National Association of Small and Medium Enterprises (NASME) paid him a courtesy visit to explore areas of collaborations with the bank on the fourth coming NASME international Small and Medium Enterprises(SMEs) Trade Fair coming up in October in Lagos.
Called a Regional Sealink Project, Orya is calling on stakeholders in the maritime sector to invest in the initiative which has the potential of overcoming the challenge of road infrastructure as well as absence of rail links within the region.
According to Orya, the funding requirement for the regional sealink project is $60m out of which $36million will be required to purchase vessels, equipment, office space and other infrastructure and $24million for working capital to cover general and administrative costs to be raised through equity and debt financing respectively.
Orya said,” beyond making business sense, the project has some inherent accruable national benefits that further justify its implementation. These include, unlocking opportunities in the maritime sector through effective indigenous participation, thereby stimulating maritime-related employment as well as localizing some of the maritime freight payment of an average of $5billion annually from import and export tonnage.”
The Sealink project is also capable of giving the maritime related legislations such as the Cabotage Act and the Nigerian Maritime Administration and Safety Agency (NIMASA)Act as well as the National Shipping Policy a boost.
Enumerating the benefits further, Orya noted that the Sealink project would enhance the competitiveness of Nigerian exports, thereby improving the contribution of manufactured exports from the current level of 6 percent and enhancing local industrial capacity utilization and attracting new investments.
Additionally, the project will enhance Nigeria's status as a maritime hub for the West and Central Africa with the attendant benefits of facilitating Atlantic short- sea trade and development of pool of talent and manpower for the industry.
Adding that the project has the potential to stimulate multi-modal transport development to cater for non-littoral regional member countries and facilitate the growth of hinterland haulage business, as the market segment is not yet targeted by major shipping lines, the NEXIM bank boss stated that the project has been endorsed by the Federal Government and being sponsored by the Federation of West African Chambers of Commerce and Industry(FEWACCI) with collaborations from the ECOWAS Commission.
Justifying the Regional Sealink initiative,Orya said that it is cheaper to move a container from China to Lagos than from Lagos to Dakar, explaining that this was the motivating factor as they cannot sit and watch this capital flight when a huge unemployed youth are idling away within the sub-region.
Two consultants, one from Anglo-phone and the other from Franco-phone speaking countries were engaged to visit the 15 member countries of ECOWAS and later Cameroun. The two consultants came up with funding requirement of $61.5million and $1.5million was supposed to be used for setting up the Special Purpose Vehicle (SPV), which is the Sealink Promotional Company Ltd to mid-wife the regional shipping line.
In his words,” the SPV is to run the activities that we are running now, which include to get a issuing house to prepare the information memo, organize and run board meetings, put in place good corporate governance structure so that by the time the SPV gets the money it will be transmitted into transnational shipping company. So, we are going to use $60million for the shipping line and we are going to buy three ships for a start.
“We have proposed 3 routes or ports of call: Two, for cargo and passengers, one route for cargo. We are doing something that is peculiar to our own environment that will make our people very comfortable and deepen the trade within a short period”, Orya stated.
On collaboration with NASME, he said,” we have to look at some of the areas that we can channel our resources in both funding and capacity building, saying that NEXIM had embarked on a mission to bring its services closer to the SMEs so that they don't look far for us to process facilities. We now have agencies, not branches, in the east, south-west, Adamawa, etc. You don't need to go to our full regional branches to access our facilities”. He further promised to partner NASME on the SMEs international trade fair.
Earlier, the President of NASME, Alhaji Garba Ibrahim called for the support of NEXIM bank to the NASME SMEs international trade fair and the need to support members as well as build capacities.