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Who is Afraid of a Maritime Regulator?* By Philip Agbese

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In the vast expanse of commerce and industry, the term regulation elicits a multifaceted response, precipitating a dichotomy of opinions. On one hand, regulation is perceived as a vital mechanism to ensure a level playing field, safeguard consumer interests, and maintain market integrity. Conversely, it is often met with trepidation and apprehension, particularly by those who fear the potential consequences of increased costs, bureaucratic red tape, and interference with business operations.

 

 

This dichotomy is presently unfolding in Nigeria’s maritime industry, where the proposed Nigeria Shipping and Port Economic Regulatory Agency Bill has sparked a contentious debate among stakeholders. The maritime industry, aptly referred to as the lifeblood of global trade, is characterized by its intricate complexity, involving a diverse array of stakeholders, including shipping companies, port authorities, and regulatory bodies. As a critical component of Nigeria’s economy, it facilitates international trade and contributes substantially to the country’s Gross Domestic Product (GDP).

Notwithstanding its importance, the maritime industry operates in the absence of a dedicated regulator, raising concerns regarding the standardization of practices, safety protocols, and environmental sustainability. Moreover, the industry is not immune to challenges such as unfair pricing practices, arbitrary charges, and inefficiencies in port operations, underscoring the need for effective regulation.

However, the question remains: who is afraid of a maritime regulator, and why? Is it the fear of increased costs, the potential for bureaucratic interference, or the apprehension of change in a traditionally unregulated industry? As the debate rages on, it is essential to consider the benefits of regulation, including enhanced safety standards, improved efficiency, and a level playing field for all stakeholders. Only then can we address the concerns of those afraid of a maritime regulator and chart a course for a more robust and sustainable maritime industry.

To provide a comprehensive response to this query, it is essential to elucidate the role of a regulator. In its essence, a regulator serves as a vigilant watchdog, ensuring that industry participants conform to established rules and standards, thereby maintaining a level playing field and promoting a culture of compliance. This function is crucial in any industry, but it assumes even greater significance in sectors like maritime, where the stakes are exceedingly high and the potential for malpractice is substantial.

A maritime regulator can play a pivotal role in ensuring fair and transparent pricing practices, safeguarding shippers from arbitrary and exorbitant charges, and promoting efficiency and productivity in port operations. These outcomes can, in turn, lead to reduced shipping costs, stimulate trade, and ultimately drive economic growth and development.

The recent proposal for a bill to regulate shipping in Nigeria has sparked anxieties and apprehensions among some stakeholders regarding the creation of a new agency and the potential for increased governance costs. While these concerns are understandable, they belie the significant economic benefits that a well-designed regulatory framework can bring to the maritime industry, including enhanced safety standards, improved efficiency, and increased investor confidence.

However, this fear is misplaced and stems from a lack of understanding of the critical role regulators play in fostering economic growth and development. By establishing clear rules and standards, regulators can promote competition, innovation, and investment, ultimately leading to a more robust and sustainable industry.

Regulators play a vital role in any industry, and their presence has been instrumental in promoting economic efficiency, safety, and innovation across various sectors. To fully appreciate the significance of a maritime regulator, it is essential to examine the economic benefits that regulatory oversight has yielded in other industries. Across various sectors, the presence of regulators has proven instrumental in fostering transparency, enhancing consumer confidence, and mitigating systemic risks, thereby contributing to the overall stability and growth of industries.

By ensuring compliance with established standards and regulations, regulators have played a crucial role in attracting investments, stimulating economic development, and promoting market integrity. In the financial sector, for instance, regulatory authorities have been instrumental in upholding banking and investment standards, thereby bolstering market integrity and minimizing the occurrence of fraudulent activities. The Central Bank of Nigeria (CBN), for example, has ensured stability and soundness in the financial system through its regulatory actions.

Similarly, in the telecommunications industry, the Nigerian Communications Commission (NCC) has played a pivotal role in regulating the sector, leading to increased competition, improved service delivery, and significant economic growth. The presence of regulators in these industries has not only enhanced consumer protection but also promoted innovation, efficiency, and competitiveness, ultimately contributing to the overall development of the economy. Also, in the healthcare industry, regulatory bodies have played a vital role in ensuring the quality and safety of pharmaceutical products, thereby inspiring consumer trust and fostering innovation. The regulatory framework has created an environment where manufacturers are held to high standards, resulting in improved product reliability and effectiveness. This, in turn, has boosted consumer confidence and driven innovation, leading to the development of new and improved treatments.

Likewise, the Nigerian Electricity Regulatory Commission (NERC) has played a crucial role in the power sector, ensuring that operators adhere to stringent safety standards and promoting investment in the industry. NERC’s regulatory oversight has created an environment conducive to growth, attracting investors and driving innovation in the sector.

These examples highlight the positive correlation between effective regulatory oversight and economic prosperity, emphasizing the need for a similar framework in the maritime industry. The maritime industry is not immune to the benefits of regulation, and the need for a regulator is long overdue. The industry has been plagued by inefficiencies, corruption, and a lack of standardization, leading to increased costs and reduced competitiveness. The introduction of a regulator will help address these challenges, promoting economic efficiency and growth in the industry.

The regulator will establish clear guidelines and standards, ensuring that operators comply with safety protocols and environmental regulations. This will create a level playing field, promoting competition and innovation, and driving economic growth in the industry. Moreover, the regulator will provide a framework for dispute resolution, protecting the interests of consumers and operators alike. By establishing a regulatory framework, the maritime industry can unlock its full potential, contributing significantly to Nigeria’s economic development.

Across a wide range of industries, regulators play a vital role in fostering economic growth and stability. They establish clear rules of the game, ensuring fair competition and protecting consumers from bad actors. In the maritime sector, effective regulation is essential for:

 

The establishment of a robust regulatory framework can markedly enhance maritime safety by setting and enforcing stringent standards for ship construction, maintenance, and operation. This significantly reduces the risk of accidents and environmental damage, thereby protecting precious lives and property. Moreover, regulations can effectively address security concerns, such as piracy and terrorism, by implementing measures to prevent and respond to such threats.

Efficiency and Productivity:

Regulations can play a vital role in streamlining operations and improving efficiency in the maritime industry. By establishing standardized procedures and documentation, regulators can substantially reduce administrative burdens, expedite the movement of goods, and facilitate the seamless execution of maritime transactions.

Investment and Innovation:

A clear, predictable, and well-defined regulatory environment can attract significant investment to the maritime sector. Investors are more likely to be willing to invest in an industry where the rules are transparent, well-defined, and enforced, thereby fostering a climate of confidence and stability. This, in turn, can lead to innovation and the development of new technologies that can further improve efficiency, safety, and environmental sustainability in the maritime industry.

 

The establishment of a maritime regulator has the potential to transform the industry’s dynamics, cultivating a culture of accountability, compliance, and innovation. By establishing clear guidelines for vessel operations, cargo handling, and environmental protection, a maritime regulator can significantly enhance operational efficiency, reduce the incidence of maritime accidents, and minimize environmental degradation. Furthermore, regulatory oversight can create a level playing field for industry participants, curbing unfair practices and promoting healthy competition, ultimately benefiting consumers and the global economy at large.

If, as some stakeholders claim, the proposed maritime regulatory bill is merely a bureaucratic exercise with no tangible benefits, then their concerns are understandable. However, the potential benefits of a well-designed regulatory framework are substantial and cannot be overstated. The question that arises, therefore, is who is truly afraid of a maritime regulator?

The development of a maritime regulatory framework is a complex and intricate undertaking, requiring careful consideration and expertise. It is crucial to get it right, as a poorly designed regulatory framework could have the unintended consequence of stifling growth and innovation, while a well-designed framework can deliver significant economic benefits, driving growth and development in the industry.

In order to effectively address the concerns of stakeholders, the Nigerian government can adopt a transparent and inclusive approach to developing the regulatory framework, affording stakeholders the opportunity to provide input on the proposed regulations. The government should also clearly articulate the objectives of regulation and the enforcement mechanisms, ensuring transparency in decision-making and implementation.

To mitigate the risks of corruption, the regulatory agency should be established with robust governance structures and clear lines of accountability, ensuring transparency in decision-making and enforcement. By weighing the potential costs of a new maritime regulatory agency against the potential benefits, it becomes evident that the benefits of improved safety, security, efficiency, investment, and innovation far outweigh the costs, leading to increased economic growth and prosperity for Nigeria.

The fear of a maritime regulator is misplaced, and the industry requires regulation to promote economic efficiency, safety, and innovation. The implementation of a maritime regulator is not a cause for fear; rather, it represents a crucial step towards ensuring the sustainability and integrity of the global maritime industry. By drawing parallels with the economic benefits of regulatory oversight in other sectors, it becomes evident that a maritime regulator can catalyze positive transformation, fostering a conducive environment for growth, innovation, and responsible practices.

In conclusion, the Nigerian government should not be swayed by the anxieties of some stakeholders, as the potential benefits of a well-designed maritime regulatory framework far outweigh the costs. The industry will experience significant growth and development with the presence of a regulator, and the Nigerian maritime industry has the potential to be a major driver of economic growth. Therefore, we must embrace the proposed shipping regulatory bill and support the establishment of a maritime regulator. Embracing the presence of a maritime regulator is not just a regulatory imperative; it is a strategic investment in the future of maritime trade, one that holds the potential to yield far-reaching economic and societal benefits.

Agbese is the Deputy Spokesman, 10th House of Representatives writing from Abuja.

Business

PRESIDENT TINUBU CONGRATULATES DR ADEDUNTAN, AS FIRST BANK CELEBRATES EX-GROUP CEO

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PRESIDENT TINUBU CONGRATULATES DR ADEDUNTAN, AS FIRST BANK CELEBRATES EX-GROUP CEO

STATE HOUSE PRESS RELEASE

PRESIDENT TINUBU CONGRATULATES DR ADEDUNTAN, AS FIRST BANK CELEBRATES EX-GROUP CEO

President Bola Ahmed Tinubu congratulates Dr Adesola Adeduntan, the retired Group Chief Executive Officer of First Bank Nigeria Limited, for his exceptional service at Nigeria’s oldest bank.

In celebration of Adeduntan’s remarkable tenure, the 130-year-old First Bank will host a special send-off ceremony this weekend, expressing gratitude for his contributions over the past nine years.

President Tinubu commends him for steering the bank through transformative growth, which includes expanding customer accounts from 10 million to over 42 million and elevating Profit Before Tax from N10 billion in 2015 to an impressive N300 billion in 2023.

These milestones, the President said, reflected Adeduntan’s visionary leadership and commitment to excellence.

The President expresses his appreciation for Adeduntan’s willingness to serve the nation in various pivotal roles, including his contributions to the Nigerian Economic Summit Group and other prominent institutions. His extensive expertise in the financial sector has significantly bolstered Nigeria’s economic landscape.

President Tinubu also lauds the bank’s solid internal management ethos, which is responsible for the seamless transition from Adeduntan to the current CEO, Olusegun Alebiosu.

President Tinubu wishes Dr. Adeduntan continued success in all his future endeavors.

Bayo Onanuga

Special Adviser to the President

(Information & Strategy)

November 1, 2024

 

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ZENITH BANK DELIVERS REMARKABLE TRIPPLE-DIGIT GROWTH IN GROSS EARNINGS AS PBT HITS N1.0 TRILLION IN Q3 2024  

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Zenith Bank Enhances E-Channel Services for Customers

ZENITH BANK DELIVERS REMARKABLE TRIPPLE-DIGIT GROWTH IN GROSS EARNINGS AS PBT HITS N1.0 TRILLION IN Q3 2024

 

Zenith Bank Plc has announced its unaudited results for the third quarter ended 30 September 2024, recording a remarkable triple-digit growth of 118% from N1.33 trillion reported in Q3 2023 to N2.9 trillion in Q3 2024. This performance underscores the Group’s resilience and market leadership in spite of the challenging macroeconomic environment.

 

According to the Bank’s unaudited third quarter financial results presented to the Nigerian Exchange (NGX), the triple-digit growth in the topline also led to an increase in the bottom line, as the Group recorded a 99% Year on Year (YoY) increase in profit before tax, growing from N505 billion in Q3 2023 to N1.0 trillion in Q3 2024.  Profit after tax equally grew by 91% from N434.2 billion to N827 billion in the same period.

 

The growth in the topline was driven by the expansion of both interest income and non-interest income. Interest income saw a notable 190% rise to N1.95 trillion, attributed to the high-yield environment. Non-interest income rose by 41% to N856 billion, bolstered by substantial growth in fees and commissions, which highlights the strength of Zenith Bank’s retail growth and the robust performance of its digital channels during the reporting period. The robust increase in profitability reflects the Bank’s focus on operational efficiency and strong risk management practices. Earnings per share (EPS) nearly doubled, rising to N26.34 from N13.82 in Q3 2023, underscoring Zenith Bank’s strong value creation for shareholders.

 

The Bank’s balance sheet grew significantly, with total assets growing by 49% to N30.4 trillion, largely supported by customer deposits, which rose by 42% to N21.6 trillion. This growth in deposits was broad-based across corporate and retail segments, highlighting the Bank’s deepening reach and customer loyalty. Gross loans increased by 46% to N10.3 trillion, underscoring the commitment to supporting strategic sectors in the economy.

 

Capital adequacy ratio remained strong, improving to 21.9%, well above regulatory requirements. The return on average equity (ROAE) stood at 37.8%, up from 35.1%, while return on average assets (ROAA) also improved to 4.3% as Zenith Bank maximized its asset base. Cost of funds increased to 4.3%, reflecting the broader market trend of rising interest rates, while the cost of risk was maintained at 7.3%, underscoring the Bank’s proactive approach in provisioning for credit risk. The Bank’s cost-to-income ratio rose to 39.5%, reflecting the impact of strategic investments in technology and capacity building aimed at supporting long-term growth, even as it continues to strive for greater operational efficiency.

 

Zenith Bank’s asset quality remains a cornerstone of its strength, with a non-performing loan (NPL) ratio of 4.5%, within regulatory limits. A high coverage ratio of 198.4% underscores the Bank’s disciplined approach to risk management, positioning it for resilience in the face of market volatility while supporting stable loan growth.

 

Zenith Bank remains steadfast in its commitment to sustainable growth and value creation. The Bank launched a capital raise program on August 1, 2024, consisting of a combined Rights Issue and Public Offer. This capital raise was driven by the Central Bank of Nigeria (CBN)’s recapitalization directive for commercial banks issued in March 2024. While the Bank awaits final capital verification approvals from authorities, the fundraising exercise was successful, reflecting strong confidence in Zenith Bank’s brand.

 

The additional capital will enhance the Bank’s ability to expand its product offerings, deepen its penetration in strategic sectors, boost lending to the real sector and pursue its African and global expansion plan.  In furtherance of this, the Bank in September 2024 received regulatory approval for the establishment of a Zenith Bank branch in Paris, France, which is fully operational and will enhance the Bank’s product offerings in international markets.

 

With a strengthened capital base, Zenith Bank is well-positioned to navigate the evolving economic landscape, while putting best-practice sustainability standards at the heart of its business. The Bank will also continue to prioritize opportunities that enhance stakeholder value and a strong compliance and corporate governance culture, which will reinforce the its leadership position within Nigeria’s financial sector and drive long-term growth.

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IPMAN: Setting the Record Straight

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Fueling Uncertainty: Investigating Nigeria's Subsidy Removal And Dangote Refinery Debacle* By Sylvester Audu

IPMAN: Setting the Record Straight

 

The Dangote Petroleum Refinery wishes to clarify that it has not received any payments from the Independent Petroleum Marketers Association of Nigeria (IPMAN) to purchase refined petroleum products.

IPMAN: Setting the Record Straight

Although discussions are ongoing with IPMAN, it is misleading to suggest that they (IPMAN Members) are experiencing difficulties loading refined products from our Petroleum Refinery, as we currently have no direct business dealings with them. Consequently, we cannot be held responsible for any payments made to other entities.

The payment in mention has been made through the Nigerian National Petroleum Company Limited (NNPCL), and not us. In the same vein, NNPCL has neither approved, nor authorised us to release our Premium Motor Spirit (PMS) to IPMAN.

We would like to emphasise that we can meet the nation’s demand for all petroleum products, including petrol, diesel, and aviation fuel. At present, we can load 2,900 trucks per day and we have also been evacuating petroleum products by sea. We advise IPMAN to register with us and make direct payment as we have more than enough petroleum products to satisfy the needs of their members.

Furthermore, we believe it is instructive for all stakeholders to refrain from making unfounded statements in the media, as that could undermine the economic re-engineering efforts of His Excellency, President Bola Ahmed Tinubu. Conducting business through public speculation is counterproductive and unpatriotic.

In the interest of our country, we encourage all stakeholders to collaborate and heed the advice of President Tinubu, while promoting a unified approach, rather than engaging in media conflicts and needless propaganda.

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