Chairman, Genesis Worldwide Shipping, Captain Emmanuel Ihenacho

Chairman of Genesis Worldwide Shipping, one of the few thriving indigenous shipping companies in Nigeria, Captain Emmanuel Iheanacho has said that the twin problem of low capitalisation of banks and the high cost of funds have remained the greatest impediment to the growth and development of shipping.

Iheanacho, a foremost Master Mariner, who spoke in a recent interview, observed that shipping in itself is a very difficult and capital intensive business.

He however noted that it is even more difficult in climes such as Nigeria’s economy characterised by low capital base of banks and the high borrowing interest rate, which make it almost impossible for one to source for funds through the money market in the country.

According to him, the smallest vessel costs well over $20 million, which is higher than the capitalisation of most banks in the country, a development that is worsened by the high interest rate, which is over 30 per cent.

“The indigenous shipping companies are faced with a situation whereby they borrow money at over 30 per cent interest rate while their competitors in other climes access such loans at five per cent or less and so this reduces their competitiveness since shipping is an international business”, he said.

It was also gathered that the prevailing culture among banks in Nigeria of preferring financing Letters of Credit and other short term funds has helped to further compound the problem, thus contributing to the non growth and development of shipping in the country.

Investigations show that most indigenous shipping companies have gone into extinction as their promoters have had to forfeit valuable assets used as collateral for loans to obtain loans from banks while in some cases such promoters have lost their lives due to shock arising from the sudden loss of their valuable property to banks.

Iheanacho, who doubles as Chairman of Integrated Oil and Gas Limited, an independent petroleum marketing company, said that the group had to venture into the oil and gas industry due to the prevailing challenges in the shipping industry.

He said: “Genesis Worldwide Shipping is a general cargo shipping company and so we ventured into the oil and gas business, established tank farms and started carrying petroleum products for ourselves, having been carrying for others and it has paid us off”.

The Master Mariner insisted that Federal Government needs to come up with deliberate policies and programmes to grow the business in the country as it was the case in many countries that have developed their shipping business.

He argued that in addition to creating jobs, it will significantly contribute to the growth of the country’s Gross Domestic Product GDP, developing the country’s shipping industry will add a lot of value to the economy.

Specifically, he said that growing indigenous shipping would help the country address the current problem of lack of ocean going vessels for the sea time training of the country’s cadets that would lead to the award of Certificate of Competency COC, as prescribed by the International Maritime Organisation.

“Indigenous shipping companies should be able to service the Maritime Academy of Nigeria MAN, Oron, Akwa Ibom State and other relevant institutions in terms of providing training berths for cadets on board their vessels for the award of COC”, he also said.

Recall that more than 6, 000 cadets of the academy, some of who completed their cadetship programmes more than 11 years ago have yet to do their COC programme without which they cannot secure jobs on ocean going ships.

Also, more than 2, 500 cadets of the Nigerian Seafarers Development Programme NSDP funded by the Nigerian Maritime Administration and Safety Agency NIMASA, trained in maritime universities in India, Egypt, Romania, United Kingdom, United States and the Philippines have yet to undertake the mandatory sea time training due to the absence of training vessels.