FeaturesHeadlinesMaritime Business

Exclusive: Why NIMASA handicapped to disburse Cabotage intervention funds



Funso Olojo.    |      

Indigenous ship owners have curiously but inadvertently worked against the disbursement of controversial Cabotage Vessels Financing Funds (CVFF), investigations have revealed.

Contrary to the widely-held belief in indigenous shipping community that the Nigerian Maritime Administration and Safety Agency(NIMASA)has deliberately held on to the funds, investigation has revealed that  the internal wrangling, deep- seated mistrust and high level treachery among ship owners have stalled the early disbursement of the funds.

The CVFF, an off -shoot of the Coastal and Inland Shipping (Cabotage) Act of 2003, is an intervention fund floated in 2004 to empower indigenous ship owners and enhance their capacity in the highly capital-intensive business.

It is a contributive scheme funded by indigenous ship owners with two per cent of the proceeds from their Cabotage contracts.

However, no disbursement has been made from the fund 24 years after its operation.

It was learnt that in a bid to undo themselves, some indigenous operators petitioned the Ministry of Transportation that not all of those pencilled down to benefit from the fund had vessels and cautioned the government against granting some individuals because of their perceived inability to pay back.

This act of treachery played out during the administration of former President Goodluck Jonathan when NIMASA, under the then  leadership of Mr  Patrick Akpobolokemi, selected and recommended six indigenous shipping companies to the then Minister of Transport, Senator Idris  Umar.

The owners had gone through the rigorous screening exercise and stringent guidelines prescribed by the Act to access the funds.

These Companies were Starzs Investment Company, Aquashield Oil and Marine Services Limited and Nkran Investment. 

Others were Zomay Marine and Logistics Limited, UTM Dredging and Seabulk Offshore Operating Nigeria Limited.

They were selected from over 100 applications for the funds.

It was learnt that a petition was sent to the Ministry of Transport and the Presidency, alleging lack of due diligence in the selection process and the fact that not all the six pre-qualified companies owned vessels.

The petitioners, it was gathered, warned that the loans, if disbursed to some of the selected companies, might end up in a similar manner which the previous intervention funds, Ship Building and Ship Acquisition Funds (SBSAF) ended as a bad loan.

“This was what made the then Minister take the file to the President who sat on it.

“Ordinarily, the Minister has the powers, as entrenched in the Cabotage Act, to order for the disbursement upon recommendations of NIMASA, but unfortunately, the petition made him to seek refuge from the then President Jonathan who held on to the file”, a highly placed source who had internal knowledge of the development confided in our correspondent on the condition of anonymity. 

It was further gathered that this development was later to prove fatal for the continued agitation and aspirations of indigenous ship owners under the incumbent leadership of NIMASA, Dakuku Peterside, said to be eager to disburse the funds but was sadly deterred by the precedent he met.

“The present leadership of NIMASA led by Dakuku is willing and eager to disburse the funds but the precedent it met on ground has created a cloud of uncertainty and doubt  and it doesn’t want to get caught in the political cross fire within the indigenous shipping community” a source in NIMASA, whispered to our correspondent.

It would be recalled that Dakuku Peterside, the Director-General of NIMASA, had on many occasions, acknowledged the need to empower indigenous ship owners to enable them compete in the industry.

In 2018, he even promised that the disbursement of the funds would commence in 2019.

“As you can see, unless a miracle happens, that promise can only be kept in the breach as we are barely two months before the end of the year.

“He is willing but apparently handicapped by the seed of doubt sown by the ship owners themselves who are ironically expected to be the beneficiaries of the funds”, the source further noted.

The Minister of Transportation, Rotimi Amaechi, seemed to have caught the bug of doubt about sincerity of ship owners when last year, during his first tenure in office, vowed not to disburse the funds as long as he remained the minister.

Unfortunately for the ship owners, Amaechi was returned as the Minister of Transportation for the second term.

To show his scepticism over the ability of the beneficiaries of the loan to pay back, the Minister, who declared that he didn’t want the funds to suffer the same fate as the Aviation intervention funds, decided to rejig  the guidelines for disbursement of the funds by making it much tougher to access.

Despite this, there is no enthusiasm from the body language of the Minister to part with the funds said to have accrued over $124m (about N44.64bn).

Our correspondent gathered that the general mood in NIMASA’s management is that it will be unsafe to disburse this loan to the present crop of shipping companies which are mostly one-man business owned.

“The management is sceptical about giving the loans to individual companies which are predominantly one-man businesses.

“What happens to the loans in case anything happens to the owner of the company?

“Government does not want to take chances given the bad experiences it had with SBSAF and Aviation intervention funds which have become bad debts”, an insider source said.

The thinking of NIMASA’s management, it was further learnt, was that the individual shipping companies should come together and form consortia of companies to access the funds.

“They should band together in twos, three and fours, as a consortium of companies as the practice in advanced economies and access the funds.

“It will be easier to get the funds repayment as the structure of the companies will not revolve around sole owners.

“Also, there will be larger resources pulled together that will serve as strong guarantee that the loans will not be mismanaged and repayment plan secured”.

It was gathered that the NIMASA management may have shared this thought with the indigenous ship owners who are most likely to be uneasy with the proposal due to the repressed but smouldering animosity among them.

This uneasy relationship among the indigenous shipping players has resulted to the fragmentation of their association.

Until recently, the indigenous ship owners were under a common umbrella called Nigerian Indigenous shipowners Association(NISA) .

But due to the cat and mouse relationship among them, their ranks have split with the formation of splinter groups such as Ship Owners Association of Nigeria (SOAN) whose members openly bragged that they are real owners of ships, African Shipowners Association and Ship Forum.

This fragmentation, our correspondent learnt, has effectively shot down any hope of early disbursement of the funds, despite government promises.

However, those who have grown wary of the endless wait for CVFF, have turned to an alternative intervention funds for succour, the Nigerian Content Development Funds, which was established in 2010 and powered by the Nigeria Content Development and Monitoring Board (NCDMB).

So far, this fund, derived from one per cent contributions from beneficiaries, has supported six ship owners from the accrued amount of $700m out of which $200m was seeded to the Bank of Industry to support operators in maritime as well as Oil and gas industry.

© 2019, maritimemag. All rights reserved.

Rail Transport: 20 new coaches arrive Nigeria in six weeks – Amaechi

Previous article

FG  to localise railway technology   — Minister

Next article

You may also like


Comments are closed.

More in Features