Reps support establishment of Marine Development Bank

Members of the House of Representatives on Wednesday expressed overwhelming support for the bill which seeks to establish the Nigerian Marine Development Bank in Nigeria.

Section 2 of the bill which scaled through second reading on the floor of the House provides for issuance of N500 million authorised capital of 500 million shares of N1 each and shall be subscribed equally by the government of the Federation and the Central Bank of Nigeria (CBN).

The bank when operational is to carry on the business of marine credit guarantee and marine credit insurance; design and implement schemes of marine credit guarantee for parties carrying on business in Nigeria and marine related services which appears to the bank conducive to the purpose of encouraging maritime activities, as provided for in section 5 of the bill.

It can also undertake and guarantee the insurance of marine credit entered into by parties on marine business, contracts of insurance against risk of monetary loss or other monetary detriment attributed to circumstances outside the control of the person suffering the loss or detriment and resulting from the failure to receive payment in connection with otherwise arising out of acts or transactions in the course of undertaking marine activities with persons in any persons in any other country.

Section 6 of the bill also empowers the bank to receive or recover any money owed to it under any facilities or services, receive or recover such commissions and fees as may be agreed upon in consideration of
any guarantee or underwriting by the bank as well as invest and deal with the monies of the bank not immediately required upon such security and in such manner as it may from time to time determine.

Section 12 of the private bill sponsored by Mohammed Gololo (APC-Bauchi) also provides for the floating of Foreign Exchange Revolving Fund that “shall be used for direct lending to marine owners for the purpose of training the marine operations including services in accordance with any guidelines which the Board may from time to time stipulate and approve.”

Under the exemption clause as stipulated in section 14, the bank is exempted from export credit instruments such as bills of exchange, promissory notes, commercial papers, acceptances and similar instrument used for financing export transactions as well as stamp duties.

With the approval of the Minister, the bill empowers the Bank to raise funds in the foreign currency from Multilateral development banks and institutions such as international bank for reconstruction and development otherwise known as World Bank, Nigeria’s external resources, lines of commercial credit (either directly or in association with other persons) and regional development banks.

According to the explanatory memorandum, the bill seeks to empower the bank to carry out the business of marine credit insurance and for other related funding interventions.

Some of the lawmakers who spoke in favour of the bill include: Leo Ogor, Minority Leader; Ossai Nicholas Ossai, chairman, House Committee on Ethics and Privileges; Shehu Garba, Betty Apiafi (PDP-Rivers); Johnson Oni expressed optimism that

In his lead debate, Gololo emphasised the need for the creation of a financial institution saddled with the responsibility of improving access to long term loans and insurance for investors.

Throwing his weight behind the bill, Leo Ogor (PDP-Delta) explained that the bank when operational would provide  the much needed funding for Nigerian investors in the maritime sector to compete favourably with their peers.

According to him, the bill to establish a bank to finance the maritime sector is the kind of legislation that secures the future of the country, especially now that there’s a consensus on reducing government’s heavy reliance on oil revenue.

Speaking in support of the bill, Ossai Nicholas Ossai opined that a fully functional Maritime Bank will lead to consistent investment in the sector and creation of employments for teeming Nigerian youths and attract enormous benefits to the Niger-Delta region where a large number of maritime companies operate.

He added that the bill when passed into law will boost socio-economic activities in the oil producing region as well as douse the lingering youth restiveness in the region.

In her remarks, Betty Apiafi, chairperson, House Committee on Health Institutions who noted that a vibrant maritime sector is critical to the ongoing economic diversification, solicited for the support of other lawmakers on the passage of the bill.

The lawmaker who decried the state of the Nigerian economy and the inability of deposit banks to provide required financial support for the private sector, noted that the establishment of the Maritime Bank would go a long way to sustain businesses in the sector.

Apiafi noted that other development financial institutions, including the recently created Development Bank of Nigeria are more involved with assisting Small and Medium Scale Enterprises (MSMEs), hence the need to come up with institutions that can provide funding for large scale investments.

“If we are truly want to diversify the economy, we need to look at long term funding for sectors which have the potentials of diversifying the economy,” she stressed.

While ruling on the debate, Speaker Yakubu Dogara referred the bill to the Committees on Banking and Currency, Maritime Safety, Education and Administration for further legislative action.