• Saturday, April 13, 2024
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BusinessDay

Experts list benefits of building regional shipping capacity through ship acquisition

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Building a regional shipping line will help to unlock the opportunities in the maritime sector by creating jobs for youths, ensuring effective indigenous participation in shipping business, and minimising high level capital flight which currently stands at $5 billion annually, says Roberts Orya, managing director of the Nigerian Export-Import Bank (NEXIM).

At a one-day ‘Sensitisation/Pre-Investor Forum’ on the proposed Regional Sealink Project for West and Central Africa, Orya said the project will attract private-sector funding into the development of key maritime infrastructure that will improve the level of intra-regional formal trade as well as the contribution of import/export trade to the nation’s Gross Domestic Product (GDP).

Building regional shipping capacity, he said, will not only help in ameliorating the basic road/rail infrastructure deficit challenges that affect regional integration within Africa, but will also allow for effective implementation of various maritime laws like Cabotage and Nigerian Maritime Administration and Safety Agency (NIMASA) Act.

“Regional sealink, if established, will enhance competitiveness in Nigerian export sector, thereby improving the contribution of manufactured exports from the current level of under 6 percent and attracting new investment for industrialisation,” the NEXIM boss said.

“There has been growth in intra-regional cargo and merchandise trade by about 300 percent in a decade from 4.7 million metric tons in 1998 to 13.4 million metric tons in 2008 without corresponding increase on basic logistical infrastructure.”

Aside from the benefits that will accrue to countries within sub-Saharan Africa from the proposed regional shipping company, $36 million is required for ship acquisition, equipment, office space and other infrastructure, while another $24 million that will cover the general and administrative expenses will also be required for setting up the regional shipping company.

Findings have shown that the Federation of West African Chambers of Commerce and Industry (FEWACCI) and NEXIM, together with their investing partners, will look to equity and debt financing options for the funding of the project.