By Uche Usim
AFTER several decades of nightmarish experience with intra Africa freight, trade and investment due to absence of a dedicated sealink, there seem to be some light at the end of the tunnel as West African Shippers anxiously await the launch of a $60 million sealink project initiated by the Nigeria Export Import Bank (NEXIM).
Despite the hitches that seem to dog its final launch, its promoters are optimistic an end would soon come to the labourious and expensive European and Asian routes to link other African countries under a new dispensation.
Today, West African shippers (importers and exporters) are forced to go through Europe or Asia before they can access another neighbouring African market, a development economic experts like Prof. Pat Utomi and Olisa Agbakoba (SAN) described as a huge disincentive to the business because the shippers are fleeced by foreign shipping lines who bill them heavily to move their goods within same region on the continent.
The duo painted a cycle of grief where 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.
The experts insist the situation has stunted the economic growth of West and Central African nations despite their rich maritime endowments.
To address these challenges, private investors, with the endorsement of some African governments/agencies in 2011, conceived a $60 million Sealink Project (SP) to address the issues of poor connectivity and high transport costs of international and sub-regional trade in West and Central Africa.
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 transnational private sector initiative is buoyed by Sealink Promotional Company Limited, which serves as its Special Purpose Vehicle (SPV), while the Nigeria Export-Import (NEXIM) Bank, the Federation of West and Central Africa Chambers of Commerce and Industries (FEWACCI) and TRANSIMEX (an integrated logistic services provider based in Cameroon) are the promoters.
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.
“Once we know exactly the level of equity we have raised, we will go for a loan for the balance. The equity/ debt ratio as desired should be 60 per cent equity and 40 per cent loan,” he explained.
Background
Before the Sealink Project idea was mooted, studies undertaken by NEXIM Bank and the NSC revealed that ECOWAS and Central African region have the lowest international score on logistics based on six key dimensions, including efficiency of Customs clearance process, quality of trade and transport related infrastructure, ease of arranging competitively priced shipments, quality of logistics services, ability to track and trace consignments and frequency with which shipments reach the consignee within the scheduled time.
Consequently, studies were commissioned by NEXIM and the NSC on behalf of the Federal Government to address the challenges of high transportation cost and excessive transit time as these have not only made intra-regional trade non-competitive, but ranked transport and logistics in West Africa about the costliest in the world.
The assignment was also to address the challenge posed by regional barriers, which inhibit free movement of persons and services and the absence of dedicated safe and modern fleet to facilitate short atlantic short-sea trade.
However, at its Investment Forum held on July 22, 2013 in Accra, Ghana, NEXIM Managing Director at that time, Robert Orya, described the Sealink Project as a reliable vehicle to take Africa out of the economic doldrums as it offers a unique and compelling investment proposition to private sector entities in the fast growing West and Central African region.
Orya expressed worry that the West and Central Africa was left behind in global business despite its huge economic potential.
Endorsement
Interestingly, the Sealink Project is enjoying the endorsement and support of various regional bodies. For instance, it has been endorsed and finally assisted via grant of $302,000 by the Directorate of Technical Cooperation in Africa/AfDB. It has also been supported by the African Export-Import Bank (Afrexim Bank) and ECOWAS Bank for Investment and Development (EBID) with arrangement for funding and investments.
It is technically assisted by the Maritime Organisation of West and Central Africa (MOWCA) with membership in the Sealink Technical Committee; technically and financially assisted by the NSC also with membership in the technical committee and commissioning of studies on its feasibility in the Gulf of Guinea (Equatorial Guinea and Sao Tome and Principe). The Sealink Project also enjoys the support of the Union of African Shippers’ Council (UASC) and West African Development Bank (WADB).
The project has been presented to the governments of member countries as well as their various maritime and ports organisations and authorities of member countries.
Part of the long-term projection for the project is to recreate in Africa, what plays out in Europe where about 28 countries are linked by sophisticated networks of airports, rail lines, roads and seaports, thus eliminating various trade hurdles.
Mr. Adamou Abdourahamane, the Secretary General of UASC, at a recent sub-regional workshop in Abuja themed, “Minimising Transport Costs and Improving Connectivity of West and Central African Countries: A Panacea for Economic Development of the Sub-region’’, said Africa’s share of global trade was more than nine billion tonnes.
He added that the figure was less than 10 per cent of the international trade and thus underscored the need for connectivity in terms of infrastructure in order to improve sub-regional trade.
Apprehension
Meanwhile, following the sack of Robert Orya, the former Managing Director of NEXIM in February this year by President Muhammadu Buhari, stakeholders and maritime enthusiasts have expressed fears that the Sealink Project may suffer a setback since he (Orya) nursed it passionately. Another worry for stakeholders was why the Sealink Project has not taken off five years after it was conceived. They are also wondering if it was not another white elephant project as it has received the endorsements, financial and technical support of various African agencies and governments and yet remained a paperwork.
But the Executive Secretary/Chief Executive of NSC, Hassan Bello, in an exclusive chat with Daily Sun said the project was fully on course, even as he added that the promoters are dealing with government institutions and not the persons.
“It is a private sector project with the endorsement of various regional bodies and establishments. We are dealing with NEXIM as a body and not an individual. So, the project is on course even though Robert Orya is no longer in charge at NEXIM. The promoters are dealing with institutions. The pilot project is about to take off with the supply of three vessels. The Federal Government is also looking at linking the Sealink Project with the proposed national fleet coming up soon. Everything has been laid out. The vessels for the Sealink Project won’t venture into the blue waters but remain in the brown waters and the Exclusive Economic Zones (EZZ). It’s a regional project for West and Central Africa. It’s on course. It is not a white elephant project,” he assured.
Implementation update
In an exclusive interview with Daily Sun the Executive Secretary/Chief Executive of the Nigerian Shippers’ Council (NSC), Hassan Bello, said the Sealink Project is in progress as a committee within his agency is also interfacing with NEXIM and other promoters to kick-start it.
He revealed that major intra-regional traders/shippers, especially in Nigeria and Ghana have expressed interest in the project and have written to that effect.
“The pilot scheme operation arrangements are being concluded with three maritime companies with Memorandum of Understanding (MoU) executed. Arrangements for jetties, port facilities and warehouses at Lagos and Port Harcourt, as well as other West and Central African partner countries being concluded. Partnership arrangement with Burutu Port by Akewa Global Services on behalf of Sealink ongoing for both intra-regional and inland waterway operations in Nigeria, especially towards supporting the mining sector. Messrs Marine Services and Supply Company Limited of the Regional Sealink Consortium has now confirmed willingness to deploy three ships for the pilot scheme operation of the project upon confirmation of Notice of Readiness (NOR) from Sealink Promotional Company Limited.
Hope Yongo, the Technical Adviser to the Managing Director, NEXIM Bank, Bashir Wali, at a recent transport confab in Abuja hinted that the bank has requested for the designation of the Kirikiri Lighter Terminal in Lagos as the regional port for the Sealink Project.
He added that the status of the terminal would be upgraded for container weight verification, in line with the SOLAS Convention. He, however, solicited cargo support from all member countries and encouragement of private and maritime organisations to boost the regional project.