Nigeria Maritime Law Association (NMLA) has lauded the Federal Government for its decisive action in initiating the disbursement of the Cabotage Vessel Financing Fund (CVFF).

Established under the Coastal and Inland Shipping (Cabotage) Act of 2003, the CVFF was created to provide crucial financial support to Nigerian shipping companies for vessel acquisition.

However, successive administrations had not operationalised the fund, leaving the industry waiting.

Some maritime lawyers, who spoke in separate interviews with the News Agency of Nigeria (NAN) on Sunday in Lagos, expressed their optimism about this development.

Mr. Mike Igbokw, Senior Advocate of Nigeria (SAN), on CVFF’s implementation, said, “I am heartened by the federal government’s move to disburse the CVFF for the benefit of shipowners.”

While emphasising the need to see the actual implementation to realise the benefits, he recalled that previous government approaches favoured a public-private partnership for a national shipping line, a departure from the current direction.

According to Igbokwe, the CVFF is primarily sourced through a mandatory two per cent surcharge on contracts for vessels engaged in the nation’s coastal trade, collected by the Nigerian Maritime Administration and Safety Agency (NIMASA).

The fund also accumulates through tariffs, fines, license fees and other amounts approved by the National Assembly.

“All participants in Cabotage in Nigeria contribute to this fund, which is intended to promote the development of the local shipping industry,” Igbokwe explained.

He cautioned against allowing the funds to remain idle in banks, where their intended purpose of empowering Nigerian citizens is undermined.

He urged the government to start the disbursement, suggesting that even if large vessels can not be acquired initially, the funds could be used to procure barges for transhipment activities.

Chief Chidi Ilogu, SAN, a former president of the NMLA, stressed that Nigeria’s ambition to become a shipping hub in Africa hinges on its ability to own ships.

He warned that without a robust fleet of indigenous-owned and adequately equipped vessels, foreign entities would continue to dominate the shipping business.

Ilogu highlighted the potential of the CVFF to facilitate the purchase of medium-sized vessels suitable for transhipmentt within West African countries.

He noted that the newly established Lekki Deep Sea Port presents a significant opportunity for indigenous shipowners to transport cargo to other parts of the country at a reduced cost.

“We have been discussing this disbursement for a long time; now, policy implementation is key,” he asserted.

He also called for seamless collaboration between the Ministry of Transportation and the newly created Ministry of Marine and Blue Economy to prevent any conflicts of interest.

Furthermore, Ilogu encouraged young operators to seize the opportunities that the CVFF disbursement would present.

The current president of the NMLA, Mrs Funke Agbor, also commended the federal government for directing NIMASA to finalise the modalities for the CVFF disbursement.

Expressing her optimism, Agbor stated that the disbursement would significantly boost growth in the maritime sector, particularly for indigenous shipping companies.

She emphasised that enabling local players to own vessels through the CVFF would also create crucial sea-time training opportunities for Nigerian cadets.

This positive momentum follows a directive issued on April 15, by the Minister of Marine and Blue Economy, Alhaji Adegboyega Oyetola, instructing NIMASA to begin the disbursement process.

Oyetola said the directive signifies a decisive shift after more than two decades of stagnation, ushering in a new era for Nigeria’s indigenous shipping under the leadership of President Bola Tinubu.

“The disbursement of the CVFF represents not just the release of funds, but a profound commitment to empowering Nigerian maritime operators, boosting national competitiveness, and fostering sustainable economic development.

“This isn’t just about disbursing funds; it’s about rewriting a chapter in our maritime history,” Oyetola declared.

He highlighted the prolonged dormancy of the CVFF, stating, “For over 20 years, the CVFF remained a dormant promise.
“Today, we are bringing it to life deliberately, transparently, and strategically.”

Oyetola said that NIMASA had already issued a Marine Notice, inviting eligible Nigerian shipping companies to apply for the funds.

Qualified applicants can access up to 25 million dollars each at competitive interest rates to acquire vessels meeting international safety and performance standards.

The fund will be administered in partnership with carefully selected and approved Primary Lending Institutions (PLIs) to ensure a professional and efficient process.

“We are not merely funding vessels; we are investing in a future where Nigerian shipping companies can stand shoulder-to-shoulder with their international counterparts.

“This is a turning point, one that affirms our commitment to local content, economic resilience and maritime sovereignty,” he added.

The minister noted that the CVFF disbursement would yield significant benefits, including the growth of a stronger and self-sufficient shipping fleet, the creation of numerous job opportunities.

Others, he added, were the stimulation of local shipbuilding and repair industries and a substantial reduction in capital flight associated with chartering foreign vessels.