Shipowners express hopelessness over inability to access $124m Cabotage funds

Abiola Seun

Distraught indigenous ship owners may have become wary of endless wait for the elusive Cabotage Vessel Financing Fund (CVFF) more than 15 years it was instituted.

Their wariness may have given way to forlorn hope as they have lost faith in ever accessing the funds to shore up their dwindling shipping businesses.

This follows the inability of the Nigerian Maritime Administration and Safety Agency (NIMASA) to disburse the accrued $124million (N37.9 billion) from the funds among indigenous shippers to deepen their capacity.

Indigenous shipowners were to contribute three per cent on every contract done in the nation’s maritime sector.

The federal government took a bold attempt to change the face of maritime business within its coasts when it enacted the Coastal and Inland Shipping (Cabotage) Act 2003 and it was designed to restrict foreign participation in Nigeria’s domestic coastal trade, nevertheless opportunities exist for foreign involvement.

Findings have revealed that the funds over the years have been trapped in leading commercial banks in the country with interest increasing significantly.

Stakeholders argued that the fund has been shrouded in mystery, maintaining that it was not true that only $124million had accumulated into it.

In a chat with our correspondent on why the federal government found it difficult to disburse the N37.9 billion CVFF, the Chairman of Peacegate Group, Prince Ayorinde Adedoyin said “I do not have anything to say about the Cabotage Vessel Financing Fund. I am just tired of talking about it.”

Hitherto, Adedoyin had said the Cabotage fund had become a political tool, stating that federal government’s appointment of new Director-General to NIMASA made it difficult for the funds to be accessed by indigenous shippers.

According to him, many other shipowners had lost faith in the fund, adding that most of the pioneer contributors had since gone out of business and the only people benefitting from the fund were the custodian banks, which had been trading with the money for the past 14 years.

Adedoyin called for transparency, expressing that the best thing was for the government to make the account open and detail how much had gone into the account each year and for the contributors to be the ones selecting beneficiaries and not the government.

The Chairman, Nigerian Ports Consultative Council (PCC) Otunba Kunle Folarin in an interview on CVFF said “people have over emphasized the change agent that the CVFF will do.

“CVFF is not the messiah? What is important is for people to look into ship financing. It is a very holistic way, not from government alone. There are other modes of raising finance, ship building for ship acquisition.

“As long as we continue to depend on CVFF, people will begin to suspect that is going to be a scam.

“The Cabotage Fund is about 15 years which means is like a mirage, the more you move close the more it moves away.”

Recently NIMASA reacted to disbursement of the CVFF in the first quarter of 2019 as promised last year

The Director General of the NIMASA, Dr. Dakuku Peterside had said it was important that people understand that the disbursement of the CVFF does not lie with NIMASA.

“It is the prerogative of the Minister of Transportation to disburse the fund. Ours is just to collect and warehouse. The Minister has already inaugurated a committee on the CVFF,” he said.

He tasked the committee to come up with a standard pattern for the disbursement of the CVFF, so that the fund does not end up like previous intervention funds that were disbursed in the maritime industry and was never repaid.

“That committee has submitted its report and it is before the Minister of Transportation. Until when the Minister approves that report and direct that we disburse the fund, I cannot say categorically when the fund will be disbursed. But what I know is that the fund is there, untouched and safe, and will be disbursed this year,” he added.

The objective of the Cabotage Act is primarily to reserve the commercial transportation of goods and services within Nigerian coastal and inland waters to vessels flying the Nigerian flag and owned by persons of Nigerians.