Nigeria: Funding Challenges Threaten Investments in Maritime Industry

Failure of Nigerian banks to grant loans to operators in the maritime industry has been identified as a major factor, crippling investments in the capital-intensive sector.

Managing Director/Chief Executive Officer of Japaul Oil and Maritime Services Plc, Mr. Jegede Abiodun Paul disclosed this in an interview with THISDAY at the commissioning of Japaul House at the weekend in Lagos.
He noted that banks' failure to give loans to maritime operators had not only impacted on investments made by key players in the sector, but also adversely affected the nation's economy.
"Banks do not release money to fund the Maritime Sector. Maritime is a very capital-intensive business. You cannot thrive in it without
having adequate funding" he said. He also identified the insecurity in the Niger Delta area and lack of skilled manpower and corruption as some of the challenges affecting maritime operation in Nigeria. He regretted that Nigerian operators hire expatriates to handle their businesses because of shortage of skilled Nigerians to handle coastal operations.
"It is sad that we bring in expatriates to handle our ships and vessels because our people do not have the required skills. The ones
we have are very few and the few we have want to enrich themselves on your vessels by engaging in sharp practices."
The Japaul boss however commended the Federal Government for introducing the cabotage law, which requires that vessels operating on inland coastal waters be owned and managed by Nigerians. He noted that the local content law and cabotage laws have given local operators a competitive edge over their foreign contemporaries that have dominated oil and gas business from inception.
He however stated that his company intended to invest over N40 billion in new projects in its divisions and subsidiaries in the mining,
dredging and offshore sectors. Highlighting the company's activities in recent years, Jegede said Japaul last year alone made a turnover of N7.1 billion and a profit of about N1.2 billion with current asset base in excess of N23 billion. "Japaul has been in business several years, and we have not for one year declare any loss. Last year we made a turnover of N7.1 billion and a profit of about N1.2 billion. In year 2009, we made about N5.5 billion about N1.1 billion profit. We have asset base in excess of N23 billion", he said.
He said "Japaul Dredging Services Limited is into all manner of dredging services and shore protection. We have received commendation from all our clients including oil majors for good performance and timely delivery of services. Japaul offshore and maritime services deal in chartering of marine vessels, with more than 50 sea and river ships and boats in our fleet. We are also doing business in oilfields maintenance services. This is a major division with many foreign affiliates positioned for handling engineering, procurements, and construction and installation projects in various oilfields. Japaul Mines and Products Limited deal in mining of minerals and having three big quarries in Ifon, Ondo State, Calabar and in Dubai, United Arab Emirates. Japaul Energy Limited is into marketing of petroleum products in Nigeria and along the West Africa coastline with operation office in Benin Republic."
Source: This Time