Sunday, 30 November 2014

Coins make noise while notes are silent

It was the English poet and playwright, widely regarded as the greatest writer in the English language and the world's pre-eminent dramatist, William Shakespeare, who said that coins always make sound but currency notes are always silent.

The Bard advised that "whenever your value increases, keep yourself calm and silent". People of value are wise and careful with their utterances and actions.
Truly, an empty barrel makes the loudest noise and one place where we have empty barrels in abundance is the maritime industry.


The maritime industry is one place where people of mediocre abilities lay claim to expertise. A few days ago in Abuja, I heard a man who, a few years ago, was a typist claim that "there is no where in the world where..." but before he could finish his sentence, a very wise Abuja-based government official asked him if he had visited every country of the world to lay claim to knowing the trend in every part of the globe. It turned out that our typist turned 'maritime expert' had travelled to only Ghana – by bus – in his whole life. He had never been to Europe, America, Australia or Asia. He had never carried out any comparative analysis of the regulatory trend elsewhere, yet he sits here and bamboozles the gullible with an expertise he did not possess. And he is one of the most vociferous. Our friend uses his loud voice and noise to drown opposing views. Those who have substance in their arguments simply walk away rather than join issues with such a character. It would be futile arguing with someone so steep in self-adoration worship.

The thing with the barrel is that it won't make any noise if you don't hit it with a rod or stick or mere hand. So does the empty barrel really make the loudest noise? Are not those hitting it the ones making a noise? The sound that eventually comes from the empty barrel is a result of cause and effect. Without a preceding action, emptiness will remain still. Without an argument, the emptiness of someone like our friend will remain still.
A major problem of the maritime sector is the preponderance of pseudo-leaders. The sector has abundant potentials but its growth is stunted largely by the low quality of its leaders.
Have you heard that weird joke by those comedians where they tell us that God once was queried by other nations for His apparent bias treatment of a country called Nigeria? They alleged that the countries complained that God so loved Nigeria that He gave her everything needed to be the greatest in the world. But God laughs all knowingly and asked them to wait until they see the caliber of leaders he would give to Nigeria. I hasten to add that this joke is apt with regards to the maritime sector.
I find the views of many of the noisy pseudo-leaders and 'experts' in the maritime sector immature and sometimes appalling.  A philosopher once noted that something is odd if a person is not liberal when he is young and conservative when he is old. I am far from being a conservative but one matures and regards some of the views of one's younger years as undeveloped and callow. But for many of these pseudo-leaders, nothing changes. When you hear then shout, it is because their interests are being threatened or they fear that they could lose relevance. Their agitations are never altruistic. They will go as far as pull down an organization to maintain their nuisance value.
Many a times, these pseudo-leaders play the roles of saboteurs and spoilers. They are the 'opposite people' in Fela's song. They are disagreeable and polarize the industry. They stunt the growth of the shipping sector in pursuit of selfish interests. They make misleading statements and dish out false information.
But the real valuable leaders are not noisy. I respect Mr. Chidi Ilogu, a Senior Advocate of Nigeria and one of the most respected lawyers in the country.
A man of very few words, Ilogu told me: "Bolaji, forget all these noise. Focus on the substance". What a wise counsel. We should henceforth forget the noisy lot and pay attention to real issues in the maritime sector. These people are not fighting for us, but for their own selfish interests.    

Monday, 24 November 2014

Maritime Microfinance Bank Gets CBN nod to Start Operations



Nigeria's apex bank, Central Bank of Nigeria (CBN) has given nod to a Maritime Microfinance Bank (MMB) to start operation next month.
Described as the first financial institution fully dedicated to servicing the maritime industry in the country, MMB is expected to formally open its doors to the public on December 1, 2014.

Confirming the development, a promoter of the new bank, Mr. Bolaji Akinola said, the  MMB was set up to fill a yawning gap within the financial services industry by offering small loans or micro-loans, to maritime industry operators and workers who are unable to access conventional loan services.

According to Akinola who is also one of the directors of the  MMB, this is the starting point for us. We are embarking on a revolution in the provision of financial solutions for the maritime industry. We are starting as a unit micro-finance bank but our vision is to evolve into a full fledge commercial bank fully dedicated to the growth and development of the maritime industry.

He maintained that the birth of MMB was a culmination of several years of research and team work between several well-meaning people who are passionate about growing the maritime industry.

Giving an insight into the operations of the new financial institution he said MMB would use small and microloans to develop small businesses based on their existing talents and skill sets.

He said: "Dockworkers, freight forwarders, truckers, port workers, staff of private companies and government organisations who mostly have challenges accessing small loans can now heave a sigh of relief as the bank for them has finally come. Access to finance is an invaluable element that brings growth and development to any sector of the economy. It also helps in realizing full economic capabilities of the people.

"As part of the agenda for full development of the maritime sector, access to finance has been identified by the stakeholders in the industry as one of the key elements that needs to be considered".

According to him, the bank will build exceptional value for its clients by demonstrating incomparable care for their needs and increasing their financial wealth by providing tailored solutions to meet their financial needs and protecting their assets. We are deploying the latest banking technology and have developed very exceptional financial solutions that will help our clients grow. These are in addition to the regular banking products which include savings account, current account, salary account and co-operative account among others.

The promoter explained that micro, small and medium enterprises in the maritime industry can now easily access loan facilities to grow their businesses through the new establishment of the new financial institution in the maritime industry.

Thursday, 13 November 2014

Danger zone: chasing West Africa’s pirates


Take a boat ride out from the Nigerian port of Lagos and it is easy to see why piracy, sea robbery and other forms of maritime crime are such a problem.
The ocean is swarming with cargo ships, oil tankers, barges and other vessels waiting for permission to enter the overcrowded port.
Great hulks of rusting metal, anchored and sitting low in the water, almost as if they are inviting pirates to sling their ladders over the side and clamber up on board.
"It was 14 August 2014," says Nigerian navigation officer Rotimi George.
"At around 2am I heard banging on my cabin door: Boom, boom, boom, boom. 'Pirate attack, pirate attack'. They seized the captain, who was Russian, and the Ukrainian chief officer."
Mr George is one of hundreds of seafarers who have been attacked this year off the coast of West Africa one of the world's top piracy spots - and far more dangerous than the waters off Somalia.
Psychological scars
According to the International Maritime Bureau (IMB) and the Oceans Beyond Piracy group, there has been an escalation in violence.
More seafarers were killed and wounded in the first nine months of 2014 than for the whole of 2013, when more than 1,200 were affected.
This is believed to be a conservative estimate, as the IMB says about two-thirds of attacks off the coast of West Africa go unreported.
As well as physical violence, there are the psychological scars.
Captain Suresh Biradar, an Indian who was kidnapped off the coast of Nigeria, says he will never return to sea again.
"They kept us on the bare wooden floor of a tiny hut. Each day, the only food we had was a 70-gram packet of noodles.
"The pirates became violent after taking drugs. They pointed guns near our heads and ears, and fired bullets.
"I was released after 28 days when a ransom was paid."
The experiences of Mr George and Capt Biradar reflect a growing trend, not only of kidnapping for ransom, but of pirates sorting through the crew and taking away those considered to have "high-value" nationalities.
A study by Oceans Beyond Piracy has documented how pirates have seized American, Indian and Polish seafarers, but have left behind Nigerians because they are considered worthless in terms of ransom.
Robbery, cargo theft and ransoms
Unlike Somali pirates, who have used the single technique of seizing ships and their crew for ransom, there are three types of piracy in the Gulf of Guinea.
According to a former member of the British special forces, Sven Hanson, who now works for a private maritime security company in West Africa: "You've got the classic armed robbery at sea, which has been happening for centuries, where pirates board a vessel to steal money, radios and mobile phones.
"The next scale up is cargo theft, the predominant threat in West Africa, when pirates hijack an oil tanker, take her to a quiet place, bring another ship alongside and siphon off the oil.
"Third, there's kidnap for ransom when pirates seize the expatriates."
In most cases of West African piracy, the pirates want the cargo, not the crew.
This means levels of violence are higher than they are off the coast of Somalia, where the pirates need to keep the crew alive in order to obtain ransoms.
"The attacks are deadly and brutal," says the first female head of the Nigerian trawler owners' association, Margaret Onyema-Orakwusi.
"The pirates throw the captain and chief engineer into the cold room where we store the fish. They freeze to death," she says.
"Piracy has decimated the fishing industry; 100,000 jobs have been lost and Nigeria now imports more than 80% of its fish."
Many of the pirates are former militants from the oil-rich Niger Delta region, although, as maritime expert Bolaji Akinola points out, they are just part of a complex, global jigsaw.
"The criminality stretches very wide - if someone steals crude oil, he has to sell it either to a country or a multinational company."
A pirate based in the Niger Delta said the only way to get a share of the region's oil wealth was to rob ships.
"We attack seafarers and we beat them so they'll tell the government," he told the BBC.
"They're eating the oil companies' money while we go hungry. We have to collect their money in order to survive."
In its efforts to combat maritime crime, Nigeria has a bewildering number of government agencies, partnerships with private security companies, even deals with former seafaring militants who have themselves carried out spectacular acts of piracy.
Senior naval official Rear Admiral Samuel Alade says piracy has been "drastically reduced" because of what the navy and others are doing.
'War risk area'
Not everyone shares his point of view.
The Norwegian Ship-owners' Association says the number of times its vessels visited Nigerian ports decreased by 37% between 2011 and 2013 because of the threat of attacks, even though port calls to the rest of Africa increased by about 20%.
Underwriters have designated the waters off Nigeria, Togo and Benin a "war risk area", pushing up insurance costs.
This ultimately affects the cost of food, oil and anything else that is transported by sea from West Africa.
Nigeria's multi-pronged approach to tackling piracy has generated confusion, even amongst its own security agencies.
Nigerian maritime police in October 2013 opened fire on Nigerian naval personnel after mistaking them for pirates.
In March 2014, two British men working for a private maritime security company were arrested and accused of stealing oil.
The strategy of paying former militant leaders to help fight maritime crime is also proving problematic.
One former Delta warlord, General Boyloaf, who led a spectacular attack on a Shell oil platform 120km (74 miles) out to sea, was in August 2014 appointed by the authorities as leader of a maritime security outfit in his home state of Bayelsa.
"The government was having serious security challenges in the creeks," he said.
"They chose me to deal with it as the creeks are my terrain. I was born in the creeks, I fought against the government in the creeks and I will now use that knowledge to hunt the pirates."
But dressed all in white and sitting on a black sofa under an oil painting of a tiger in his villa in the capital Abuja, he complained the government was "choking" funds agreed as part of a 2009 amnesty for the militants.
"What do you expect us to do? We will fight. I know what my people are capable of doing," he said.
Maritime expert Bolaji Akinola does not think former warlords should be involved.
"People who fought against the state are now being hired to protect its most precious facilities. If they're no longer satisfied with what they're getting, they can hold the state to ransom."
Mr Akinola believes efforts by the Nigerian authorities and their partners in the private sector are beginning to "push the pirates back", at least in Nigerian waters. But the pirates are not going away.
A bit like squeezing a balloon, he says they are "going further west and further south, and deeper into the Atlantic Ocean".
"The situation in the Gulf of Guinea is going to get worse before it gets better."

Source: http://www.bbc.com/

Monday, 10 November 2014

Fracking, shale gas and the Nigerian economy

The Middle East region has been embroiled in an unprecedented dimension of crisis of late yet rather than climb, the prices of crude oil have been on a downward spiral. I think this trend signposts the end of the era when the prices of oil shot through the roof whenever the region erupted in crisis.  

Less than six months ago, oil was trading at $106 per barrel, up from a low of $91 per barrel earlier this year.
Since 1990, there have been 21 "destabilizing" events that have occurred in the Middle East. From Operation Desert Storm in 1990 to the Anbar Clashes in 2013, the area has had both major and minor political/military disruptions. Over the last 23 years, on average, oil prices have risen by 5.4% 30 days following the beginning of a disruption. 

Usually, following the first period of price surge, still-higher prices follow. Historically, three months after the start of the crisis event in the Middle East, oil prices have risen by 9.2% from their pre-crisis levels. If this average holds true, oil prices should be approaching $112 per barrel by now. But this has not been the case as the prices have crashed by about 27% in three months.
When oil prices rise, oil-producing countries including Nigeria, which exports over two million barrels per day, benefit. 

Historically, the OECD countries (large, developed countries) have been the largest consumers of oil in the world. However, that historical truism has changed over the last number of years. The OECD (developed countries) consumed 72% of the world's oil production in 1992. Today, that percentage has fallen to 49%. The non-OECD (developing) countries now consume 51% of the world's energy output. 

Besides, oil consumption in the U.S. has declined from a high of almost 21 million barrels per day in 2004 to the current 18.8 million barrels per day while the country, which was the largest buyer of Nigeria's crude no longer buys our hydrocarbon. This is simply because the United States' domestic oil production has risen from less than 5 million barrels per day to 12.8 million barrels, currently. What that means is that its oil imports are running at an annualized rate of around six million barrels per day, down from well over 12 million barrels per day in 2004.
A process known as 'fracking' has made all the difference for the world's largest economy. 

Fracking, the common name for hydraulic fracturing is widely used to extract oil and gas, particularly from deep shale formations. A single well requires the use of millions of gallons of water and tons of sand. 
Fracking has lead to a boom in U.S. energy production, with a number of beneficial effects. According a 2014 report from the Federal Reserve Bank of Kansas City, in states where natural gas fuels a significantly higher proportion of power plants, average electricity prices have fallen. 

Fracking has led to an abundance of oil in the United States of America, which has in turn reduced the demand for import, and consequently stability in the prices of crude oil on the international market. 
Sliding oil prices means declining revenue for Nigeria, and other oil exporting nations.

At a recent Senate committee session on the Medium Term Economic Framework (MTEF), which serves as a basis for the preparation of the estimates of revenue and expenditure for the annual budget, Mrs. Ngozi Okonjo-Iweala, Finance Minister and Coordinating Minister for the Economy, admitted that the Nigerian economy was facing challenges on account of the oil price drop. To put it succinctly, the Nigerian economy is facing serious crisis as a result of drop in oil revenue due to slowing global demand and the rise in US shale oil production.
Further price drops may result in further difficulties, considering that our 2014 national budget is predicated on a benchmark of $77.50 a barrel and daily production of 2.39 million barrels. 

The activities of crude oil thieves and oil pipeline vandals are also making it more difficult for Nigeria's output. 
There is still demand for Nigeria's crude from Asian economies like China but the outlook is worrisome. What if the economies of Asia, with their heavy investment in research and development, discover cheaper sources of energy in their backyards? And this could be sooner than later. 
Nigeria is in a typical Catch-22 situation: the demand for our crude is shifting at a fast pace to new buyers who may not have the capacity for large volumes; and we do not have significant refining capacity in our country. So a significant proportion of crude oil earnings go out to import processed petroleum products. 

The drop in global oil prices makes it imperative for Nigeria to urgently diversify its revenue base.
There is now a compelling need to unlock the potential of agriculture. With over 84 million hectares of arable land, Nigeria should be a net exporter of food, which should enable the country earn substantial revenue outside oil. The maritime industry is also good as an alternative source of revenue if accorded necessary priority. 

Monday, 3 November 2014

Perambulator

Like several other Africans, I enjoy listening to Fela's songs. I love music generally but as the late wolrd statesman, Nelson Mandela said in his book Long Walk to Freedom, the music of my own flesh and blood goes right to my heart. 
The curious beauty of African music is that it uplifts even as it tells a sad tale, Madiba said. And that is very true for me with regards to Fela's songs.
ITT (International Thief Thief) was a great album recorded by the Abami Eda in the 1980s. It told the story of how politicians connived with businessmen to loot the public treasury. He infuriated the political establishment by dropping the names of ITT Corporation vice-president Moshood Abiola and then General Olusegun Obasanjo at the end of the hot-selling 25-minute political screed.
Another of my favourites is Perambulator. The dictionary meaning of perambulate is to walk or travel through or around a place or area, especially for pleasure and in a leisurely way. Perambulator on the other hand means "a machine, similar to an odometer, for measuring distances by means of a large wheel pushed along the ground by a long handle, with a mechanism for recording the revolutions". It is also means a baby carriage; pram. Irony of the English language!
Well, Fela's perambulator means a person who makes a lot of motion without making any progress; a man that is full of activities without an iota of productivity.
Fela made the analogy of a commissioner in charge of dirt in Lagos. The commissioner is worried that the "town council" had been collecting salary without ridding the city of its stench. He determined to do something about it.
The commissioner's starting point was go on radio to announce: "I am going over to London to learn how English carry dust bin."
Fela: "Wetin commissioner no know be say other people dem go there to learn atomic energy, but our own commissioner dey go there to learn dust bin carrying.
"You see, him just dey perambulate and him still dey same same place."
One of the morales in the song is that we waste so much time on frivolities. We look for exotic answers to simple and uncomplicated problems. And we talk too much. 
On a subject, we will hold seminars, workshops, talkshops, symposiums, conferences, debates, forums, awards, launching, get-togethers and all. We will do everything except solve the problem.
The Apapa gridlock, which remains a sore point for the managers of our roads and for this administration, is a typical example.
Series of seminars and all manners of stakeholders' meetings have been held on the same subject by almost every other interest group within and without the maritime industry yet several years after, the problem lingers.
All the recommendations are there, rotting away on moth-infested papers piled up in some archives as if they would grow feet and implement themselves. 
The gridlock is as a result of four major factors namely; increase in the volume of business activities at the ports and jetties without corresponding increase in road infrastructure; lack of holding areas for trucks; collapse of Apapa-Oshodi expressway; and the insatiable appetite for graft by security operatives.
It is a fact that cargo throughput at the ports in Lagos have doubled over the past five years from less than 40 million metric tons in 2008 to over 70 million metric tons handled last year. Container throughput for both ports has also risen to more than one million TEUs in 2013 from about 400,000 TEUs in in 2006. But despite these increases, the road infrastructure has remained the same. Tank farms and petroleum jetties are now preponderant in the same port corridor, a situation that was alien to the port environment about 10 years ago. Yet inspire of all these, government has not deemed it fit to either construct new roads or develop alternative modes of transportation to cope with the rising cargo volume. Many of the tank farms and oil jetties were licensed by the Nigerian Ports Authority (NPA) with the understanding that they would evacuate their products by rail but none has complied with that licensing condition. 
In the days of Abacha, the dark-goggled General was accused of grounding the nation's refineries in order to dish out patronage to his cronies to import petroleum product. But the level of importation, fifteen years into our democratic experiment, is unprecedented in the history of this country. And the refineries are in worse shape than during the Abacha era. So long as we are not refining petroleum products, importation will continue unabated and tank farms will remain in business. And as long as they continue to conduct their businesses in Apapa, their trucks will continue to compete with trucks plying the port for the shrinking and collapsing roads. 
The second factor responsible for the gridlock is also man-made. For almost ten years, operators have shouted themselves hoarse on the need for the Lagos State government to dedicate a sizeable portion of land for use of truck operators as holding bay.
Over two thousand trucks are required at the ports and oil depots daily to evacuate cargo to various parts of the country yet there is nowhere the trucks can park. So they stay on the road. The ideal is to have a parking lot where the trucks will all go to and wait until they are called into the port to either drop or pick up cargo. It is common sense but then, someone said it is not common. 
For the umpteenth time, Fashola, Jonathan et al, please allocate a land space that can hold up to 5,000 trucks at a time for use as holding bay for trucks plying the port. Such facility should have canteens, dressing rooms, resting rooms, showers, repair yards etc for the truckers who will be happy pay to use it. It could even be concessioned to a private operators. 
The collapse of the Oshodi-Apapa expressway is another major factor responsible for the pains commuters are being put through right now. Every vehicle, every truck going in and out of Apapa now uses the narrower Ijora-Apapa road with its attendant consequences on the Ijora bridge. The result of this is the chaos which has become a daily occurrence and which is capable of leading to the collapse of that bridge. Static trucks remain on the bridge day and night. And of course, operatives of the Western Naval Command of the Nigerian Navy, with base on dockyard road Apapa, are cashing in on the ensuing commotion. They 'charge' N2,000 per truck to pass through. They don't mind delaying a truck for hours if the driver fails to 'cooperate'. The Police, Army and other security operatives are not left out of milking the hapless truck operators.
Desperate situations require desperate measures; there is need for spirited move to salvage the situation. All these seminars are not the answer. We need to do the needful, now.