The abysmally law trading activities within West and Central Africa will soon receive a boost when a proposed regional sea link project becomes operational, a senior official of Nigerian Export Import Bank (NEXIM), Mr. Hope Yongo, has said.
In a project presentation during the just-concluded 3rd ECOWAS Investment Forum in the commercial city of Lagos obtained on Saturday, Yongo said trading in West Africa was difficult because of the absence of a functional sea link.
”High transportation costs and excessive transit time are making intra-regional trade non-competitive and West African transport; logistics costs are some of the highest in the world,” he said.
Yongo added that the lack of dedicated, safe and modern fleet to encourage and facilitate Atlantic Short-Sea Trade along the West and Central Africa regions, was also affecting intra-Africa trade.
Compared to other economic blocs, intra–regional trade in Africa is the lowest – it is less than 11% in Africa and 12% within the ECOWAS sub-region; intra-European trade accounts for 72%; in Asia it is 52%; intra-North American Trade is 48% and 26% in South-Central America.
Yongo called on foreign and local investors to invest in the proposed sea link project, which he said, had the potential to accelerate intra-regional trade, regional integration, movement of people, goods and wealth creation.
“As a Trade Policy Bank and an Export Credit Agency, the regional sea link project essentially aligns with NEXIM’s development and strategic objectives of deepening intra-regional trade and enhancing total export credit, especially under the Bank’s ECOWAS Trade Support Facility (ETSF),” Yongo said.
The ETSF is designed to, among things, facilitate formal and recorded trade within ECOWAS, broaden trade and market access for Nigerian products, deepen payment systems and use of trade instruments.
The regional sea link project has three key market segments – Freetown-Conakry-Bissau-Banjul-Dakar, with a combined freight and passenger service; Cotonou-Calabar-Douala-Libreville, combined freight and passenger service; and Libreville–Dakar for freight only. They would dock at major ports in along the route.
To achieve the project goals, a Special Purpose Vehicle (SPV), as a promotional company, has been incorporated as Sea Link Promotional Company Ltd (SPCL) to raise money for the promotional activities of the project and identify and select initial investors/country location.
Others include to incorporate and raise funds for Transnational Maritime Shipping Company (TMSC), identify and select management team/technical partners, identify and select best financing scheme, initiate acquisition of vessels and design procedures for good corporate governance.
The NEXIM official said an Investment forum for the sea link project had been scheduled for 16 July in Accra, Ghana, under the sponsorship support of the ECOWAS Commission.