Efficient transport scheme is inevitable for all economies, developing and developed alike. Economics or commerce practically teaches that production can be complete only when its output gets to the final consumer or market. One sure way of ensuring that products get to the final consumer without hitches is through effective and efficient transportation scheme-sea, land, rail, pipeline and air.
For a long time now, key stakeholders have been advocating an efficient initiative that can create a West and Central Africa maritime shipping operation to facilitate trade and eliminate bottlenecks encountered via land transportation. So many gridlocks such as unbridled taxes, harassments, theft and seizures, among others, are basic reasons why sea transportation has become imperative, say analysts.
The Nigerian Export- Import (NEXIM) Bank has recently stepped to drive a scheme called ‘Sealink Project’ to promote trade across ECOWAS and Central African markets via sea transportation.
Apart from NEXIM Bank, there are also other organisations such as the Federation of West African Chambers of Commerce and Industry (FEWACCI), Sealink Promotional Company Limited and Transimex, which are also facilitators of the scheme. FBN Capital Limited is also part of the project, serving as its financial adviser.
Last year, NEXIM and its partners began Sealink placement offer with a view to bringing in investors that will pull $62.3 million to facilitate the project. The private placement took place by way of offer for subscription of 89,036,956 ordinary shares at $0.70 per share.
The purpose of the offer was to raise funds needed to acquire sea-going vessels for conveying people and cargo across the West and Central Africa coast. Information available to BusinessDay then showed that the project to be undertaken included vessels which would cost $47 million; spares costing $2.35 million; other equipment estimated at $6.37 million; and a three-month working capital of $4.3 million.
“The project would facilitate the realisation of enormous trade-related benefits, such as reduction of non-tariff barriers to trade, elimination of transit corridor issues, reduction of transaction costs to economic operators, as well as enhance fiscal benefits to various governments through formal and documented trade,” said Roberts Orya, managing director/CEO, NEXIM Bank, in Lagos, during the official announcement of the offer.
Business across Borders gathered that the first proposed passenger-cargo route to be achieved through this project will interconnect eight cities, from Cape Verde to Abidjan, while the second one will join six cities across the two regions. Route III, which will centre on only freight, will interconnect 10 cities, including Lagos, Nigeria’s economic capital.
During the event, Wilson Attah Krofah, Sealink’s board chairman, made it explicit that if the region does not exploit Sealink’s opportunities now, foreigners and people from other sub-regions would do so soon. According to Krofar, Sealink Shipping line increases opportunities for trade, adding that trading by road creates a lot of problems owing to numerous barriers across countries.
“We did a study and found that the easiest way for our people to travel is by sea. Every businessman who wants to expand must look at the bigger market and just like the BRICS countries, we can do it ourselves coming together,” he said.
Analysis has shown that there are several opportunities inherent in well-developed sea transportation. Africa, world’s second-most populous continent, is often blighted by high transport/logistics costs. International traders complain that shipping goods from Japan to Abidjan, capital of Cote d’Ivoire, which costs $1,500, could go for as high as $5,000 just from Addis Ababa to Abidjan, owing to issues surrounding land transportation in Africa.
Apart from this, the movement is often characterised by exploitation by corrupt regional government officials, delays and internal bottlenecks. The Manufacturers Association of Nigeria Export Group (MANEG) has often expressed shocks at gridlocks encountered by members across the region, which basically involve transport bottlenecks and cloning, among others. Importers too have been lamenting high costs involved in bringing in goods in the Africa in general.
Though Nigeria’s export market seems to be booming, many manufacturers are yet to fully tap into the thriving opportunity provided by Africa’s 1.11 billion population. Exploiting Africa’s markets has become necessary at a point where Europe is just recovering from recession. It has even become more imperative in a situation where return on domestic investment goes between 30 and 35 percent. With logistics costs and other disturbances, including other charges, the products of these exporters eventually become very expensive and thus uncompetitive.
ODINAKA ANUDU
