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Stakeholders chart path to disburse $200m cabotage fund for ship owners

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A cargo ship. PHOTO:FEMI ADEBESIN-KUTI

Stakeholders in the maritime industry converged on Lagos, yesterday, to determine the modalities for disbursing the $200 million Cabotage Vessel Financing Fund (CVFF), to local ship owners.

Minister of Transportation, Rotimi Amaechi, told journalists after the meeting that stakeholders have agreed to set up a committee that will draft the guidelines for disbursing the fund, after 15 years of delay.

The CVFF scheme was created in 2004, but thereafter indigenous ship owners have been longing to benefit from the fund after several promises by the government failed.

The accumulated fund represents a two per cent contribution by indigenous ship owners on every contract done in Nigeria’s maritime sector.

The fund was established under the Cabotage and Inland Shipping (Cabotage) Act 2003, to provide finance to operators to maintain their vessels or purchase new ones.

Amaechi noted that there was a CVFF before this administration, and the money was applied to building faculty of Maritime in several Universities, but this time it would be given to ship owners.

“This is the first time we will be giving it to shipowners directly. So, we have agreed to set up a committee that will draft the guideline, which would be taken to the National Assembly for approval.

“There must be a rule, which anybody will qualify to be allowed to borrow the money, and the implementation will be handled by the lending institutions.

“The idea is to enhance the best of the maritime industry, and to do that people must borrow and return for others to borrow, and that is how we can grow the economy.

“One of the shipowners said he has 30 vessels, another one said 16; I said if you have these vessels the number of persons you will employ must have been high. So, the more vessels we buy, the more employment we create, and the more the growth of the economy,” he said.

Chairman, Ship owners forum, Mrs Margret Orakwusi, said the move was a welcome development, adding that the guidelines need to be specific on issues of interest rate; duration of the loan; category of vessels needed, and other condotions.
Orakwusi said she looked forward to the disbursement of the fund, and a better shipping industry where the fund would be utilised judiciously.

She canvassed a long spread of the interest rate on CVFF, noting that ships lasted for 30 years and more, with a single-digit interest and a low figure.

A maritime lawyer, Chidi Ilogu, urged the committee to come up with good suggestions to move the maritime industry forward.

“There should be a clear and positive indication to implement the policy, as we cannot keep the money forever in the bank; it has to serve the purpose it is meant to serve. The process for disbursement will take some time to fine-tune,” he said.

Ilogu added: “Nigeria has to be proactive, from all indications we want to be seeing being proactive He expressed Optimism that the Federal Govt will live up to its promise on the disbursement.”

Director-General, Nigerian Maritime Administration and Safety Agency (NIMASA), Dakuku Peterside, said the meeting has chart a course for disbursement of the CVFF after getting authorisation from Mr President to proceed with it.

“After extensive consultation, it was decided by the stakeholders here that a committee be set up to come up with a draft guideline, which the minister will study and pass on to the National Assembly for approval in line with the provisions of the Cabotage Act.

“After then, we will move to the next phase of actual disbursement, using the banks as the platform to disburse the fund.”

He assured that due process would be followed in the disbursement, saying: “We don’t believe there is a mathematical solution, we will follow due process.”


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