Indigenous players in the maritime sector have expressed worry over the growing apathy of commercial banks to invest in long-term lending that will encourage the development of strategic infrastructure, especially in the shipping and maritime business.
Amy Jadesimi, managing director, Lagos Deep Offshore Logistics Base (LADOL), said in an interview with BusinessDay that Nigerian banks need to look inward and begin to invest in providing long-term funding for the development of strategic infrastructure in Nigeria.
“Infrastructure development requires long-time financing, which was almost impossible to come by in Nigeria over the past decade and half that we have been in business. Financing has been the biggest challenge and we challenge our banking sector to do a better job in supporting long-term projects because that is what the banking sector is for,” Jadesimi said.
Stating that Nigerian banking sector needs to do more by looking at long-term lending for strategic infrastructure development, Jadesimi disclosed that the banking industry in America was what enabled America to be America.
“American banks financed the building of the railway, the ports and that ‘empire country’. Our banking sector is currently financing short-term loan to import petroleum products and that is not correct,” she added.
According to Jadesimi, long-term investment is very critical because if Nigeria does not have more indigenous private sector investment in strategic infrastructure, the country will not achieve the needed economic growth.
“With an estimated 7 percent GDP growth per year, building strategy infrastructure in Nigeria is not a-nice-to-have but a-must-have. We in the private sector should be looking for a way to make long-term investment in strategic infrastructure by demonstrating our capability to developing infrastructure that would enable us to do manufacturing, textile, agriculture, build bridges, hospital, railway tracks and among other others in Nigeria,” she said.
“Nigerian commercial banks are not helping matters in terms of funding vessel acquisition. They supposed to provide the fund for such venture. Shipping business is a long-term project but our banks want to make returns in a short-term investment, but shipping is not like that,” Adewale Ishola, former president of Association of Master Mariners said in a telephone interview.
On that basis, he called for the establishment of a maritime development bank that would understand the intricacies of shipping and would give ship owners’ loans at a very competitive interest rate and not in a double-digit rate that ship owners are currently suffering repay loans. “This will help Nigerian ship owners to compete favourably with the foreign ship owners.”
“Funding is required to help the industry to grow. Shipping requires long-term funding hence government intervention is required to boost investors understanding of the market potentials,” Olisa Agbakoba, a maritime lawyer and senior advocate of Nigeria, said in a forum in Lagos.
Agbakoba, who highlighted lack of finance as one of the major challenges facing Nigerian shipping sector, said long-term funding was very critical to shipping business owing to the fact that vessel acquisition was a capital-intensive project. “Therefore, Nigerians need long-term fund to be able to participate adequately in the business,” he said.
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