After 15 Years, FG Begins Disbursement of $124m Vessel Finance Fund

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After 15 Years, FG Begins Disbursement of $124m Vessel Finance Fund

Abiola Seun

Indigenous Shipowners can now heave a sigh of relief as President Muhammadu Buhari has approved the disbursement of the Cabotage Vessels Financing Fund (CVFF),  after15 years of operation.

The CVFF which is believed to have accumulated N44.64bn ($124million) is derived from the two percent of the revenues of the shipowners and has been in operation since 2004.

CVFF has remained undisbursed since its creation in 2003, despite cries and efforts by industry operators to access the fund which is under the custody of the Nigerian Maritime Administration and Safety Agency (NIMASA). The Federal Ministry of Transport which supervises the agency had cited fears of insincerity on the side of ship owners for not disbursing the fund.

But, according to the Act establishing the fund, the Minister of Transportation is empowered to establish guidelines for the disbursement of the fund to eligible operators. After approval from the National Assembly, the fund can then be disbursed.

The Act also stipulates that selected applicants will send in their companies’ applications for the financing of the procurement of ships to the Nigerian Maritime Administration and Safety Agency, and NIMASA will send the applications to the banks warehousing the fund.

The banks are in turn required to carry out a credit risk analysis on the projects of the applicants and if the applicants are creditworthy, the banks will make recommendations to NIMASA that the transactions are worth funding.  NIMASA will then forward the recommendations to the minister to review, approve and send for disbursement.

However, speaking over the weekend at the Stakeholders’ Appreciation Night organized by the Nigerian Shippers’ Council, the minister of Transportation, Rotimi Amaechi, confirmed the long-awaited approval by the president.

He said the ministry would begin meetings with indigenous ship owners in January 2020, to commence the disbursement process.

Amaechi said, “I have got approval to disburse the CVFF. I just want to use this opportunity to inform stakeholders that the president has approved the cabotage fund and by Tuesday I will meet with the Nigerian Shippers’ Council and NIMASA to look at the dynamics of the fund.

In January, we will invite the operators for their proposals and see the nature of their businesses and how they can get the aid. The president has given the approval and we will begin the process to disburse it by next year.”

Amaechi also told maritime and port stakeholders at the NSC SAN 2019 that he was determined to fight maritime insincerity to a standstill. The minister lamented Nigeria’s current dangerous position in maritime security and accused Nigerian elites of cheating the system and not allowing genuine fight against sea crimes and piracy.

“Nigeria is currently ranking No. 1 in maritime insecurity. A few years ago, the Gulf of Aden was No. 1, but now Nigeria is No. 1. I went to see the Indian high commissioner yesterday because 18 Indian nationals were kidnapped on Nigerian waters and as I talk to you, India has issued a notice to her seafarers and citizens that they should stop going to Nigerian waters.

“I have said to myself that I will go public with this battle to secure Nigerian waters. Every opportunity I have to make a speech, I will talk about it. Nigerian elites must allow Nigeria to grow as a nation,” the minister said.

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