Ship Owners Threaten to Stop Contributions into CVFF

Tayo Oladipupo I

As the Federal Government Continues to hold on to the Cabotage Vessel Financing Fund (CVFF) for almost fourteen years without hope of disbursement, Nigeria ship owners may stop the continued deductions of the funds from their freight rates.

The CVFF is a two percent deduction made by the Nigerian Maritime Administration and Safety Agency (NIMASA) from the freight rate of all indigenous ship owners.

The fund was meant to empower indigenous ship owners to grow their businesses and to remain in business.

However, some ship owners from whom the funds were deducted have reportedly been heavily indebted to banks so much that they have left business due to inability to meet bank obligations.

While presenting a paper on the topic: Ship Acquisition and Financing in Nigeria: Challenges and Solutions, at the Nigerian Maritime Technical Summit in Lagos, Engr. Greg Ogbeifun, President Ship Owners Association of Nigeria (SOAN) said if the government had a good reason not to disburse the fund, they should stop deduction of the two percent contributions.

He avered that the closest the ship owners have gotten close to getting the fund was under the government of President Goodluck Jonathan where all due diligence had been done and the President being aware of the enormous fund in the possession of NIMASA stalled the process.

According to Ogbeifun, his company has what it takes to get the disbursement and the banks were even ready to stand for him but the minister is not forthcoming.

“But we believe that there is no situation that cannot be changed. If I were the minister, what I will probably do is to invite financial experts and sit them with NIMASA and the ship owners and banks and ask the way out of the present scenario.

“You give out the fund to grow the sector and protect the money and that is what ship owners association are engaging and ssaying. Look, we appreciate where you are coming from but you cannot just let it be and if the funds cannot be disbursed for good reasons, is it possible to recommend that they stop taking our two percent?,” He asked the audience to which there was a resounding “Yes”.

Comparing the CVFF with the NCDF, he said that the Nigerian Content Board was transparent in its dealings with contributors saying all information is available on the website of the board.

According to him, between 2010 and 2018 the board had $700 million and had since empowered six industry players.

He noted that both the CVFF and NCDF are domiciled in the Treasury Single Account (TSA) under the control of the Central Bank but NCDF has been disbursing to beneficiaries, while the CVFF has been stuck.

“The NCDB that is collecting one percent of our revenue has been able to support six industry players and we happen to be one of them, we have been able to access the fund, use it wisely and have the money paid back.

“Now listen to this, all the CVFF fund have now been moved to the Treasury Single Account (TSA) under Central Bank control . The roles played by the PLIs has now been taken out.

The minister may not have the time to explain to you the way I am doing, he cant. Where are the contracts, who is going to do the credit analysis, how are we going to pay back the money if they release it out? That is where they are on CVFF,” he stated.