The Nigerian Maritime Administration and Safety Agency (NIMASA) gives conditional reasurance for the disbursement of the cabotage Vessel Finance Fund (CVFF) even as the government and shipowners work to find ways to eliminate obstacles in the way of the disbursement,writes Augustine Ojeikhoa
Concluding arrangements are on for the disbursement of the lingering Cabotage Vessel Financing Fund (CVFF). According to the Nigerian Maritime Administration and Safety Agency (NIMASA), its management had continued in its stakeholders consultation and engagement with the view to ensure effective communication to attain a seamless disbursement of the fund.
Early January, Dr Bashir Jamoh, the Director-General of NIMASA held a meeting with the CVFF steering committee of the Nigerian Indigenous Shipowners Association (NISA) led by its chairman, Dr Edward Sohwo. A statement from NIMASA said that Jamoh had at the meeting assured indigenous shipowners of the commitment of the agency to implement the Federal Government approval for the Fund’s disbursement.
The Federal Government last year,through the Federal Ministry of Transport had shortlisted five commercial banks to act as the Primary Landing Institutions for the disbursement of the 20 years old CVFF which has accumulated up to $350million and N16billion, bringing the total sum in the CVFF account to the tune of N261billion.
The PLI banks include Union Bank Plc, Zenith Bank, Polaris Bank, United Bank for Africa (UBA) Plc and Jaiz Bank. The CVFF was established in 2003 alongside the Coastal and Inland Waterways (Cabotage) Act 2003 to empower indigenous shipowners to acquire vessels to take control of the Nigeria’s coastal and inland shiping business.
Late last year, President Muhammadu Buhari approved the disbursement of the Fund with the condition that applicants for the Fund are expected to make an equity contribution of 15 percent, while NIMASA will make equity contribution of 35 percent and 50 percent to be provided by the commercial banks.
There are,however, some summountable challenges and obstacles on the way to the disbursement of the CVFF fund. First, both the indigenous shipowners associations NISA and Shipowners Association of Nigeria (SOAN) led by Isaac Jolapamo, are of the view that the 15 per cent equity contribution on the side of the indigenous shipowners was on the high side. Some members of both NISA and SOAN have recently lamented that for a long time they have not been operating and, therefore would find it difficult to raise such equity contribution.
Other issues associated with the fund disbursement are the setting up of a disbursement committee by the Federal Government, the need for an audit of the Fund, harmonised guidelines for disbursement, disunity among shipowners which resulted in the two paralell associations – NISA and SOAN.
Tentacle gathered that during the meeting of the indigenous shipowners with the NIMASA boss, Jamoh, the latter had requested that before the disbursement of the Fund, there was the need to end the division in the camp of the indigenous shipowners. Jamoh, Tentacle gathered, had requested that the two separate associations, NISA and SOAN, would have to collapse into one united association or body of indigenous shipowners.
It was also gathered that Jamoh had requested further that the indigenous shipowners would have to accept the declared amount in the CVFF account, noting that it would not be wise to commence the disbursement if the shipowners are still doubting the actual amount in the Fund’s account.
Another area of concern to the NIMASA – DG is the issue of the CVFF disbursement committee. Sources said that Jamoh at the meetings with indigenous shipowners had insisted that NISA’s “CVFF Committee” would run in collison with the Ministry of Transport disbursement committee name. He, therefore, noted that the ministry’s committee name and that of NISA cannot be the same hence, Jamoh had advised that NISA would have to change its CVFF disbursement committee name.
In the midst of the foregoing, Jamoh the NIMASA boss had said that the greatest impediment to the disbursement of the CVFF fund is the ongoing amendment of the law establishing the Fund at the National Assembly. He said the amendment had been passed in the House of Representatives while the Senate is yet to conclude its own amendment process.
Jamoh made this known on Thursday, January 19, 2023 at event of a colloquium organised by the maritime media to celebrate the passing on of late Otunba Kunle Folarin, a notable maritime business operator whose death occurred late last year.
At the event chaired by Captain Emmanuel Iheanacho, Chairman of Genesis Shipping and a former Minister of Interior, Jamoh said, “The CVFF is like a marriage that is yet to be consummated, but people have inferred a lot of challenges which may not let the marriage work. Why are the insinuations? We have never started the CVFF policy.
“We can’t start the disbursement without engagement with stakeholders. We are taking out time to avoid the challenges that crippled the CVFF’s predecessor, Ship Acquisition and Ship Building Fund (SASBF)”.
