Tag: agreements

Nigeria: France-based shipping group signs agreement to operate a container terminal in Lekki, Lagos

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Lekki Port LFTZ Enterprise (LPLE), the promoters of Lekki Deep Seaport, recently signed a Memorandum of Understanding (MOU) with CMA CGM Group, a France-based world leader in maritime transport, to operate the seaport of the future container terminal in the port. This deal is CMA CGM’s second shipping company in Nigeria and on the African market.

CMA CGM, through its subsidiary CMA Terminals, will be responsible for marketing, operations, and maintenance of the container terminal at Lekki Deep Sea Port. Upon completion, the container terminal will be equipped with a 1,200-meter-long quay as well as 13 quay cranes and will have a capacity of 2.5 million Twenty-foot Equivalent Units (TEUs). With its 16-meter depth, it will allow the Group to deploy ships with a capacity of up to 14,000 TEUs. The port which is expected to start operation at the end of 2020 will have 2 container berths and will be Nigeria’s first deep-sea port.

“We are pleased to sign this Memorandum of Agreement with LPLE to operate Lekki Port’s container terminal,” said Farid Salem, Executive Officer of the CMA CGM Group. “As Nigeria’s first deep-sea port, Lekki Port represents a strategic choice for the CMA CGM Group. Thanks to its position and capacity, Lekki Port will allow us to bring to Nigeria larger container ships from Europe and Asia to better serve our customers and pursue our commitment to the development of the entire region. With CMA CGM’s unique service offering and expertise combined with our logistics and inland services, our presence in Lekki Port will benefit the entire Nigerian supply chain and market as well as neighboring countries.”

This port is expected to help reduce congestion in the Lagos port, which is fully in line with the CMA CGM Group’s development in the region. This terminal will also serve as a transshipment hub to Nigeria’s neighboring countries, most especially Benin.

During the official flag off ceremony of the Lekki port project recently the Federal Government of Nigeria pledged its total support for the project. This was made known by the Vice President, Professor Yemi Osinbajo who represented President Muhammadu Buhari.

“The signing of the agreement with the CMA CGM Group as another step in the right direction towards the actualization of the Port, which would become the deepest port in Sub-Saharan Africa,” said Navin Nahata, Chief Executive Officer of Lekki Port LFTZ Enterprise.

The future Lekki Deep Sea Port will be developed, built and operated by LPLE, a joint venture enterprise led by the Tolaram Group, the Lagos State Government and the Nigerian Ports Authority.

 

Source: The Nerve http://thenerveafrica.com/

 

IMF calls for East African interbank loan market

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The International Monetary Fund (IMF) has recommended the formation of a cross-border bank-to-bank lending market, secured through physical surrender of collateral across eastern Africa. The IMF said a secured interbank market would be a true repo (repurchasing agreement) market as the region lacks such facility between banks.

Small financiers are the most affected by the lack of a regional market for banks to lend and borrow from each other overnight, as they have to pay a hefty premium to get emergency funds from regulators or larger rivals. IMF reckons banks could lend each other regardless of the location of the borrower in the region, especially as the countries race to set up structures for a monetary union in the next five years.

“A true repo market will be the safest way of integrating EAC money markets. The concept of a true sale is more uniformly understood (which) therefore makes cross-border trading easier. “So, for example, a Kenyan bank is likely to feel much safer lending to a Ugandan counterparty if it receives outright legal title to Ugandan collateral,” said the IMF.

Not vibrant

The multilateral lender notes that in Uganda, for example, the repo market is not vibrant and does not match the international standards.

For one, the market does not use the standard documentation such as the global master repurchase agreement (GRMA), which sets out the guidelines of how the trading is to be done legally. Tanzania is also in the process of adopting the GMRA, which Kenya adopted it in 2008 to pave the way for the horizontal repo.

The repo is supposed to redistribute liquidity in the banking sector with government securities serving as the collateral. Though used in Kenya, it is still not very popular nor widely used across the region as the monetary union is not yet in place. The Kenyan GMRA is also domestically oriented, rather than regional.

Horizontal repo

The IMF advises Uganda to adopt the GMRA as the basis for the horizontal repo market. “A true repo market will depend on a robust Master Repo Agreement (MRA).

There is no Master Repo Agreement in Uganda. Uganda does need to draft one from scratch; there are plenty of MRAs available across the markets that can be used as examples for Uganda and tailored as needed,” says the IMF. With regard to Tanzania, the IMF says such an agreement (GMRA) is a prelude to the adoption of a new monetary framework that uses interest rates as the anchor.

Source: https://www.businessdailyafrica.com/