Senior Partner, Olisa Agbakoba Legal (OAL) Dr. Olisa Agbakoba, (SAN) has said that Nigeria was losing trillion of dollars because the country was not taking full advantage of its maritime potential.
He also said the country was still not in congruent with modern global practices and developments in the maritime industry.
Agbakoba, who is the Founder and First President of the Nigerian Shipping Chamber of Commerce, spoke during AOL’s ’summit on, “Ship management: A commercial strategy for business rescue,” in Lagos on Wednesday.
He said: “Nigeria is losing a lot of revenues. The country is losing trillions of dollars because there are lots of revenue yielding opportunities here but the country is not maximizing them.”
The Managing Partner, OAL, Mrs. Yvonne Ezekiel, said the event was strictly around ship management.
She said: “Looking at it from the commercial side, because I’m not necessarily a maritime lawyer, but it’s about business rescue. So it’s a commercial decision that banks and ship owners need to take in terms of when they have these assets. And this asset runs into trouble because the ship owner is unable to pay the bankers, who are the lenders of finance, to acquire these vessels. So when they run into an obligation of being able to pay, then a commercial decision needs to be taken.
“What we are advocating is this commercial position: Rather than go to court, get an injunction and the ship is arrested, and then left in the ocean because there’s an injunction on the ship. So what we are advocating is for a commercial decision to be taken, that a ship manager should be brought in to manage the ship. And the ship manager, when he’s managing that ship, he pays the ship owner, he pays the bank and he pays himself. So there’s a win-win all around for everyone. So it means that rather than have a ship in a rough bucket, as we say, what you have is a vessel that is generating revenue.
“And this revenue is what everybody, all parties, would enjoy. So the bank gets the repayment loans, you know, at least a repayment of their loans. The ship owner gets some income for owning the ship, and then of course the ship manager gets an income for managing the ship.”
She said all the speakers made profound presentations adding that President of the Ship Owners’ Association of Nigeria (SOAN), Mr. Sonny Eja, identified the challenges their members face.
She stated that chief among them is that access to finance is very difficult and that banks charge , double-digit interest rates.
She decried that sometimes, even when the ship owners get access to loans or some form of finance, they might not use it for the right purpose.
Ezekiel said: “And therefore, at some point down the line, they run into trouble. And of course, the fact that with regulators, you have a multiplicity of regulators, a multiplicity of charges, right? And then even for ship owners, sometimes some of them may not decide the ship for maintenance as very key. They may not put a good focus, the right type of focus on maintenance.
“So what happens is that the ship runs into trouble and then of course they are not able to continue to work or put the ship to work. And if they’re not able to put the ship to work, it means they’re going to run into trouble when it comes to repayments or loans back on their lenders. So those are from the ship owners’ part, that’ is expected.
“Now, from the bank, so the bank says, yes, we know that people are going through trouble, but there are certain factors that they look into when they have to finance the acquisition of a vessel. So first, some of the key factors are that they expect that the person should at least have been in the business for some period of time, let’s say three to five years, to show a track record that,’ you know, I’ve been in this business and I can do it.’ For the bank to have the comfort that, ‘okay, you know, we are comfortable lending to somebody who has shown that he’s got the experience and expertise to do that.’”
She added: “Also, the fact that he says you have to also look at who are the backers behind this venture. Are they reputable enough for us to keep our money in there? And then talk about the fact that, you know, also for maintenance, when the banks lend money to the vessel owners, part of what they’re taking into consideration is that there will be some downtime to be able to keep that vessel maintained. Now, obviously, if you don’t factor that money into it, it means that somewhere down the line they’re going to have a payment issue.
“But they also look at the fact that if you’re looking for funding for one vessel, they expect that you should also have had other vessels that are on the combat, so that those vessels can help you manage your cash flow and help you with payment when your ships are being maintained, like some dry dock being, being maintained and renovated. So those are some of the areas that they have mentioned. But then they also reference the fact that ship management is a way that they are looking at, because Stanbic Bank in particular, as we mentioned that they have an experience, they’ve experienced the ship management model as a form of business rescue.
“They see it as a viable way to help all parties have a win-win situation. So at the end of the day, it’s all back to the key topic of today, which is: ‘Ship management as a model of business rescue,’ as a model for business community and business opportunity. Because what you don’t want is to pack your vessel, let your vessel somewhere and get damaged.
“That’s a legal aspect, but legal, you know, when you acquire a vessel, you have to see that you’ve got them, you need to see money paid as well. So, the home loader comes in where the bank is actually an issue where you cannot pay your loan, and the bank has to call in, try to call the loan, okay? Also, even for the ship owner himself, he knows that I don’t have the capacity to manage the vessel, that he wants to do this. So the thing is, obviously, there has to be a contract, a chapter contract, especially when the company enforces the bank, there has to be a chapter contract between the ship owner, the bank and the ship owner himself.
“If it’s just a direct ship owner and ship manager, you know, a direct contract between them. So, it’s to understand that there has to be a tight contract. And like one of the speeches has advocated, you don’t feed the commercial parts of the business to the ship owner.”
According to a statement by Media Assistant, OAL, Mr. Niyi Odunmorayo, the OAL Breakfast Meeting on Ship Management and Marine Projects is a premier event dedicated to exploring the key challenges and emerging opportunities in vessel management, ship financing, and sustainable marine operations. He said: “This high-level forum brought together globally recognised experts to address critical issues in ship management, with a particular focus on the financial and technical expertise required to ensure vessels are efficiently utilised and profitably managed.
“With participants including ship owners, financial institutions, oil & gas companies, and marine lenders, the event provided a platform for insightful discussions on: Optimising vessel operations for profitability and sustainability; overcoming financial challenges in ship management; and enhancing ship financing structures to ensure secure loan repayments
“Beyond knowledge-sharing, the meeting offered a valuable opportunity to network with industry leaders, gain expert perspectives, and explore practical solutions that drive efficiency, sustainability, and profitability across ship management and marine projects.”
