CABOTAGE VESSEL FINANCING FUND, MY FOOT!

The Cabotage Vessel Financing Fund (CVFF) was established under the Coastal and Inland Shipping Act 2003. The Fund is derived from the two percent deductions from all contracts awarded and by implications, on all freights under the Cabotage regime.

The CVFF was designed to enable indigenous shipping companies acquire adequate tonnage to be able to participate in coastal and inland trade. This is the whole essence of the Cabbage Act itself. 

 Since 2003, the CVFF has grown into hundreds of Millions of United States Dollars.

Just like the Cabotage Act, the CVFF is domiciled in the Nigerian Maritime Administration and Safety Agency (NIMASA). Put succinctly, it is the agency that is responsible for its disbursement.

Yes, NIMASA has since 2008 appointed four banks: Skye, Diamond, Fidelity, and Sterling, as Primary Lending Institutions (PLIs) for the purpose of managing and disbursing the CVFF. The PLIs are the financial institutions that meet the requirement of NIMASA to participate in on-lending, monitoring and management of loans under the CVFF scheme. But this is how far the good story has gone.

Since 2008, each successive Director General of NIMASA and each successive Minister of Transport has mouthed the names of the PLIs and dangled the CVFF disbursement carrot.

And last Monday again, the Minister of Transport; Senator Idris Umar choosed the auspicious occasion of the celebration of  2013 World Maritime Day in Calabar to tell Nigerians that six companies have been penciled down as beneficiaries of the Fund. As if  we didnt already know !

The Minister was quoted as saying that, "out of the several applications received for the CVFF facility, six applications have been processed and endorsed by these primary lending institutions and accordingly recommended by the management of NIMASA to the ministry and are being evaluated for approval".

 So I ask: Honourable Minister , what is delaying the disbursement. I know for a fact that NIMASA and the PLIs had been through with their assessment and recommendation of the various requests for more than one year.

I honestly hope that the fears that have been expressed concerned stakeholders about the N40Billion Fund are unfounded. The fear (which I also share is that the Fund will go to one or two privileged ship owners and some politicians. Finally, it is feared that the CVFF may never get to the indigenous ship owners  for whom it was created in the Cabotage Act.

Funny enough, how many tankers can N40Billion CVFF acquire. Maybe one or two new bottoms. If its fairly used, the most one can get is five  double hulls!

Could the delay be as result of any of these: The beneficiaries cant raise their share of the fund (which is 15 per cent of the cost of the ship) , or the banks are reluctant to go ahead with the  arrangement that they'll provide 35 per cent and take 5.7 per cent interest on the loans. Or could it be that the 50 per cent that NIMASA is expected to provide is not available, or is that NIMASA is just prevaricating to use it as a political tool.

Both the Minister of Transport and the Director General of NIMASA should stop telling us about how many firms that would benefit. The industry and its ship owners would love to know the beneficiaries.

I will love ti hear that the Funds have been given out. To do this is to further implement the Cabotage Act and also give hope to Nigerian ship owners.