Finally, West African Shippers to access NEXIM’s $60m

There seems to be some light at the end of the tunnel as the wait by West African Shippers for the $60 million Sealink project draws to an end.

Thanks to the Nigeria Export Import Bank (NEXIM), which has finalised plans to provide the seeded funds to operators.
Described as a major effort aimed at giving needed leap in the sector, the project, which was started in 2009, has suffered many setbacks due to inconsistency in policy of government.

When the facility is fully put into use, it is expected to assist major operators in finding solutions to some of challenges associated with the sector.

Said an official: “if the facility is fully utilized, the years of frustrating experience of decline in growth with intra Africa freight, trade and investment due to absence of dedicated funds would have been over.”

Visibly elated of the development, stakeholders, including Mr. Olisa Agbakoba (SAN) expressed delight that a new vista is opening up for the country’s economy.

Said Agbokoba: “West African shippers, in their efforts to remain afloat, pass the prohibitive charges to consumers, who in turn pay much higher for goods than necessary. This is a negation to the needed growth from the sector.”

In his comment, a development economic expert, Prof. Pat Utomi, described it as one of the pragmatic approaches at improving on a factor that has been largely responsible for a stunted economic growth of West and Central African nations despite their rich maritime endowments.

Nigeria is rated among the countries that serve as the main hub in sea transport business, linking European and Asian routes with other landlocked African countries.

Currently, West African shippers (importers and exporters) are forced to go through Europe or Asia before they can access another neighbouring African market, described as a huge disincentive to the business because the shippers are fleeced by foreign shipping lines which bill them heavily to move their goods within same region on the continent.

It was in a bid to address these challenges that private investors, with the endorsement of some African governments/agencies between 2010 and 2011, conceived the idea of having a seed money, tagged Sealink Project (SP), with initial budget of $60 million, to address the issues of poor connectivity and high transport costs of international and sub-regional trade in West and Central Africa.

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The project was designed to have both passenger and cargo terminals and going by the proposition, the first route (passengers) will see ships take off from Dakar to Cape Verde then Banjul, Bissau, Conakry, Freetown, Monrovia and finally terminate in Abidjan.

It would follow the same pattern back.

For the second passenger route, ships would take off from Lome to Cotonou-Burutu- Calabar-Douala-Point Noire-Luanda
and back.

For the only freight service, the route is: Libreville-Douala-Lagos- Burutu-Lome-Tema-Abidjan-Monrovia-Conakry-Dakar.

The SPV’s total cost was estimated at $1.5 million and was covered by NEXIM Bank and other donors, including the Nigerian Shippers’ Council (NSC), the Department of Private Sector of the Economic Community of West African States (ECOWAS), and the African Development Bank (AfDB).

According to the SPV Coordinator of the Sealink Project, Tidiane Traore, an equity offering was opened in March 2014 but the original closing date of September 2014 was extended due to the Ebola outbreak in West Africa.

He said once the stakeholder know exactly the level of equity they have raised, they will go for a loan for the balance with an equity/ debt ratio designed to be 60 per cent equity and 40 per cent loan.

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