CBN, NSC Move to Introduce Disbursement Account for Shipping Agencies


 .Agents lament $4bn annual revenue loss

By Eromosele Abiodun

The Central Bank of Nigeria (CBN) and the Nigerian Shippers’ Council (NSC)  are currently collaborating to  compel all  shipping  agencies  to open   Disbursement Accounts  (DAs)  from where they  will  carry out operational costs  for  their multinational principals overseas.

The apex bank and the NSC, ports economic regulator said this was in line with Article 4 of the United Nations Conference on Trade and Development (UNCTAD) minimum standards for shipping agents all over the world.

The Executive Secretary of the NSC, Mr. Hassan Bello explained during a meeting between the CBN representative and shipping industry stakeholders in Lagos  that maintenance of a disbursement accounts as provided by ‘UNCTAD Minimum Standards for Shipping Agents’ stops the agent from going to the local market to source foreign exchange to settle charges incurred by the vessel locally.

This is just as some agents have disclosed that Nigeria loses $4billion (N1.44 trillion) annually for not introducing the disbursement account for all shipping agents.

Such amount, the agents stressed, can bring about a lot of multiplier effect in the industry and the national economy.

Bello, who was represented on the occasion by the Director, Legal Services of the Council, Mr. Samuel Vongtao, identified such charges to be covered by the DAs as those collected by the Nigerian Ports Authority (NPA); Nigerian Maritime Safety and Administration Agency (NIMASA); ship chandelling costs and other local shipping costs.

Bello said such charges were usually in foreign exchange since, “it is assumed that the principal must have wired the funds to the disbursement of account of the agent in foreign exchange.”

He added that it was for the agents to make such payments in currency that was transferred to the disbursement account rather than going to the interbank market to source for foreign exchange.

He said that it was wrong that in Nigeria; the practice was completely different, adding that, “shipping   agents apply to transfer all incomes to their principal while at the same time applying to Central Bank of Nigeria (CBN) for foreign exchange at interbank market to service local costs.”

The CBN Deputy Director, Foreign Exchange Management, Trade & Exchange Department, Mr. A.S. Jibrin said the idea of the meeting  with the stakeholders was to ensure that the DA enjoys the support of those in the shipping industry.

Jibrin explained that what the CBN set out to do was to listen to the stakeholders on the DA, adding that the apex bank was interested on policies that will grow the shipping industry and the national economy.

He said the decision on the policy could not have been taken without hearing from those in the industry.

Jibrin said he was happy about the consensus opinion being expressed at the meeting that the Disbursement Account  should be introduced.

A former Director, Shipping Services of NSC, Mrs Dabney Shall-Holma said the Disbursement Account when introduced, will go a long way in improving the contributions of the  shipping sector to the  country’s gross domestic product (GDP).

Shall-Holma while noting that the shipping sector was nearly absent  or too low in terms of GDP contribution said it  was not good that shipping operators were not contributing  enough to the economy.

During the meeting, stakeholders were dismayed that DA is yet to be introduced in the country considering the time that the idea came up.

Participants said the CBN and the NSC should move as fast as possible to ensure that the policy takes effect in Nigeria.

The stakeholders maintained that it was wrong that the shipping agents were sourcing foreign exchange locally to settle NPA, NIMASA and other dues when they ought to have been sent such money from their foreign principals overseas.