Shipping expert cautions banks against seizure of defaulting ship owners’ vessels
NAN-H-43
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By Aisha Cole
Lagos, May 12, 2017 (NAN) Mr Bukola Lawal, former Director-General, Nigerian Chamber of Shipping, has advised banks to adopt alternative workable solution to recover loans to defaulting ship owners rather than take-over of their vessels.
Lawal gave the advice in an interview with the News Agency of Nigeria (NAN) on Friday in Lagos.
According to the shipping expert, loan recovery from ship owners should be handled with care in order not to incapacitate the defaulter.
“Instead of impounding vessels for non-performing loans, banks and Asset Management Corporation of Nigerian (AMCON) should come to a term for renegotiation of the credit facility given to the defaulter.
“Inability to repay loans arise due to factors like high interest rate, non-availability of cargo, revocation of contract, vessel’s deplorable condition, litigation and foreign exchange,’’ Lawal said.
He said that few banks understood the sector or had the technical capacity to handle maritime projects involving an array of complicated technical, credit, financial and legal skills.
Also, many bankers did not understand the market, operational risk and management capacities and the extent to which the contracts mitigated performance risks, he added.
Lawal advised ship owners to be cautious with the details in the contract clauses with either banks or the Nigeria National Petroleum Corporation (NNPC) as some clauses might be harmful.
Lawal urged the Central Bank of Nigeria to compel banks to create maritime desks prior to the establishment of a Maritime Development Bank.
He called for capacity building for bank officials by accredited maritime institutions and professional bodies.
The shipping expert also said that the services of specialised chartered ship brokers be deployed for bareboat chartering of vessels outside Nigeria’s shore.
He also implored the NNPC management to provide more contracts for indigenous participation.
Lawal urged NIMASA to disburse the Cabotage Vessel Financing Fund (CVFF) to qualified ship owners who fulfil the requirements.
According to him, ministerial approval should be given for the disbursement of the CVFF at single digit interest rate.
The shipping expert called for the abolition of the waiver clause in the Cabotage Act which gave foreigners the opportunity to dominate shipping business in the country.
He commended NIMASA for the training of 2,400 seafarers and advised that subsequent trainings should be conducted through the Maritime Academy of Nigeria, Oron, Akwa Ibom.
The ex-director-general called for action on the seven maritime bills before the National Assembly to move the industry forward. (NAN)
AIC/COF/WOJ
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(Edited by Oluyinka Fadare / Wale Ojetimi)