Africa Retains Only 1% Of $1trn Annual Maritime Trade – AU

By Ikenga Chronicles November 1, 2016

Africa Retains Only 1% Of $1trn Annual Maritime Trade – AU

The African Union has said that the value of annual maritime trade within the African continent is in excess of $1 trillion.

Ship financing consultant to the AU, Mr. Oumar Seck, who spoke at the Nigeria Ship Financing Conference and Exhibition with the theme: “Financing Sustainable Maritime Development in Nigeria” in Lagos on Monday, however lamented that the continent retained only one per cent of the $1trillion due to the lack of ship financing window in the continent.

Available statistics also show that Africa accounts for only one per cent of the global vessel fleet even as she accounts for less than one per cent of the global seafarers job.

According to him, 39 out of the 50 countries in the continent are ocean linked, even as 95 per cent of trade in the region is by sea, but regretted that these countries have not maximized these potential by not building the required tonnage.

Seck, who was represented by the former head of the maritime desk of Skye Bank Plc and a maritime consultant, Peter Olorunfemi, also disclosed that the continent loses over $1 billion yearly to the increasing case of illegal fishing activities and other related activities on her territorial waters. According to him, in order to address these challenges that have given rise to huge economic losses, individual countries within the continent must evolve workable and sustainable ship financing options with a view to boosting local tonnage.

He therefore urged the Central Banks of the various countries to work out interest regimes and other long term facilities that support long term ship financing windows on a sustainable basis.

On the double digit interest rates in most African countries, the industry expert pointed out that no ship owner with a ship financing loan with an interest rate above nine per cent can break even because such ship owner will be competing with others from Europe, Asia and America, who got their loans at less than five per cent.

“There is also urgent need for capacity building and training in terms of the various ship financing options with a view to understanding and appreciating the issues at hand”, he also said.

While narrowing the issues to the Nigerian situation, given her strategic position in the continent, especially in relation to the size of her market, he said the relevant agencies of the Federal Government should come together to work out sustainable ship financing options in order to boost the nation’s indigenous tonnage.

Stakeholders, who spoke at the one-day event, however took a swipe at most banks in the country for failing to provide long term funding for projects, including acquisition of ships.

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