As part of efforts to deepen trade within the Economic Community of West African States (Ecowas) , the Nigerian Export Import Bank (NEXIM) has embarked on a sea-link project that would cost a total of $61.5 million.
The project is geared towards setting up a maritime shipping company that would link the West African coast in order to facilitate trade and ensure smooth transportation of goods among the Ecowas member states.
The fund required for this project would be raised through 60 per cent equity and 40 per cent debt.
The managing director of NEXIM, Roberts Orya, made this known yesterday in Abuja at the end of an interactive session with organisations that would spear-head the initiative.
The organisations to partner the bank on this project include, the Ecowas Commission, the Federation of West African Chamber of Commerce and the private sector which would drive the initiative.
He said the company which would be set up in Nigeria was initiated to limit the hurdles associated with the transportation of goods within the sub-region.
He noted that presently, the project was at the stage of incorporating a ‘Special Purpose Vehicle (SPV) and afterwards, begin the process of raising equity which is where the private sector comes in to buy shares.
According to Orya, “We have identified that one of the barriers to deepening trade within the Ecowas sub-region is how to move goods within the region, if we have to increase the trade flow in the region we have to set up a vehicle to drive this. That was the brain behind our initiative, to have an efficient transportation system that would move goods from one member country to another, and also be able to create jobs for the teeming youths with whatever we have.
On the timeline for executing the project, he said, “We want to complete the incorporation of the SPV by the end of August, and by the end of November, the company would be incorporated.
While commending the Ecowas Commission for endorsing the initiative, he said, “We believe that this is the very first step in deepening trade within the Ecowas sub-region, and enhancing the trade flows within the member states, and then begin the process of raising equity, which is where we require the support of the private sector. A lot of private organisations, companies have expressed interest to invest in this initiative. The Chamber of Commerce of the West African States is to promote the initiative by creating awareness in their various States, other donor agencies have also suggested we also involve a wider coverage to cover the central African countries. That is still on the drawing board”.
On the $61.5 million fund required for the project, $60 million is for the equipment and working capital, while the awareness campaign would gulp $1.5 million.
Earlier, Mr. Alfred Braimoh of the department of macro-economic policy, Ecowas, said the commission has given full support to the project, adding that the project would start delivering in its second year of commencement and dividend is expected to be paid in the third year.
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