The Unresolved Mystery of CVFF

The Cabotage Vessel Financing Funds(CVFF), an offshoot of the Cabotage law, is an interventionist programme of the Federal Government to empower indigenous ship owners for effective participation in coastal trade.

Modelled along Jones Act of the United States of America, the Fund is a contributive scheme involving two percent of the total earnings of indigenous operators from Cabotage contracts.

But curiously, the scheme has assumed a sort of myth among the stakeholders, especially the supposedly beneficiaries of the scheme.

Since 2004 when it was created, no single indigenous ship-owner has benefitted.

To say we are not pleased with this unfortunate development would be an understatement.

More worrisome to this platform is that more that 90 per cent of the operators who are supposed to get lifeline from the funds have either gone under or greatly castrated in performance and efficiency.

Yet, government has continued to grow the funds with the two per cent contributions from the hapless indigenous ship-owners.

Stakeholders were shocked by the mindless looting the funds was subjected to under the last administration of the Nigeria Maritime Administration and Safety Agency (NIMASA) ,which is the custodian of the funds.

Patrick Akpobolokemi, the then Director-General of the agency, allegedly dipped his hands into the funds and expended it on projects other than what it was meant for.

We recalled how the present government, then in opposition, had condemned the impunity of the then NIMASA DG over the CVFF misadventure.

The stakeholders had therefore heaved a sigh of relief and expressed hope of early disbursement when the present NIMASA management took over, given the position of the present government.

Almost four years in the saddle, we note with amusement the unending drama to which the scheme has been turned.

Between Dakuku Peterside, the incumbent DG,NIMASA and Rotimi Amaechi, the supervising minister of Transportation, they have built a thick wall of secrecy around the CVFF, subjecting the stakeholders to an endless and frustrating wait.

Dakuku had on several occasions raised the hope of the operators when he promised to disburse the funds.

Soon after, in December 2017, the Minister pointedly told the dejected ship owners that as long as he remained in charge as a minister, the funds would not be disbursed, citing several excuses.

Yet again this year, the same minister declared that government was ready to disburse the funds after the long existing guidelines must have been reviewed.

Expectedly, the already distraught indigenous ship-owners, who have grown weary of the delay tactics of government over the disbursement, understandably became disgusted and turned to an alternative source of funds to stay afloat.

Within a relatively short period, the few existing ship owners got succour from the Nigerian Content Development which made available $200 million through the Bank of Industry from the one percent contributions made by the shipping owners.

The quick and seamless disbursement of the same scheme by the NCB lays bares the hypocrisy and insincerity of the custodians of the CVFF, given the fact that both funds were domiciled in the Treasury Single Account (TSA), which is one of the numerous excuses NIMASA and its supervising ministry has been attributing to the delay in disbursement.

Apart from the delay in disbursement, the actual CVFF accruals have also been subject of controversy.

NIMASA has over the years dished out conflicting amounts as being the accruals of the funds.

As at June 2018, the agency claimed that the sum of $124million had accrued to the funds, the claims which the concerned stakeholders, especially indigenous ship-owners, have vehemently disputed.

They have claimed that , as far back as 2014 ,the accruals of the funds was more that the $124million being bandied by NIMASA.

In an attempt to make NIMASA claims sound hollow, a stakeholder made the following analysis.

“If we take into consideration the Agency’s response of 31st July 2014 to our official FOI request, confirming almost =N=30 billion and US$57 million accruals to the CVFF as at 1st July 2014, it clearly showed that Dr. Dakuku Peterside is either not abreast of the current update on the CVFF or he was being economical with the truth.

“Even if no more money was collected on account of CVFF since 2014, the =N=30 billion when converted to USD at 360 current BLACK MARKET rate plus US$57 million, would give you surely be in excess of US$140 million, which is indisputably more than US$124 million reported by the DG, after more than four years later (1st July 2014 to Aug 2018).

“This certainly situate correctly the position of NISA that the DG was incorrect about the actual worth of the CVFF. In specific terms, find what we consider could be the factual figures at the material time in 1st July 2014.

“Note that the exchange rate in 2014 was N150 to $1. If we use the current CBN official rate, it will be N305 not N360, the black market rate.

“If any of the above exchange rates applied, the following amount as far back as 2014 would be the accruals and CVFF reserve as follows:

1) N150 to $1; N30bn + $57m = $257m
2) N305 to $1; “. “. $155.38m
3) N360 to $1; “. “. $140.33m

“We are talking of 2014 how much more 2018. The DG might indeed be telling moonlight stories to uninformed Nigerians or was in fact very economical with the truth.

“We are meeting to fashion out ways to compel the DG-NIMASA to tell our members and indeed stakeholders and Nigerians the actual accruals to the last kobo. Members may resort to court action or resolve to approach the court if all avenues to get the figures are rebuffed by the NIMASA management.

“The patience of members, who are indeed the owners of the money have been wretched to its elastic limit and they may not agree to continue to wait indefinitely. To know the accruals is very central so that members will know the exact amount that is available before attempts are made to access the CVFF.

The above submission of aggrieved members of indigenous ship-owners , to us, clearly shows the sickening level of disrepute the whole exercise has sunk.

Clearly, the indigenous shipowners for whom the scheme was meant have lost interest and faith in the laudable initiative which they described as a sham.

We appreciate the frustration of the indigenous operators given the strangulating economic conditions they are faced with for which majority of them have been consumed.

We find it curious that a government which claimed to be protecting the interests of indigenous ship owners would want to delay for over 14 years the disbursement of a fund meant to give the same operators life line.

We find the development as incongruous to the desire and crusade of government to empower indigenous operators for optimum capacity and increased efficiency in the face of hostile operating environment populated by foreigners.

The continued delay of the disbursement of the funds has raised a fundamental question on the sincerity of government over the scheme.

Why should it take what seems to be an eternity to implement a policy that is meant to empower indigenous operators and grow the industry.?

Why should the present NIMASA management discard the process that produced six would -be -beneficiaries from the 100 applicants screened by the previous administration?

What is so mysterious and magical about the actual accruals of the funds?

Just as the teeming stakeholders are desirous of answers to these puzzles, we urge NIMASA and its supervising ministry to clear the thick cobweb of doubts surrounding the disbursement of the CVFF.

This would not only douse the tension and growing discontent among the stakeholders, it will also restore confidence and hope to the largely discredited scheme.

We frown at the so called review of the guidelines for the disbursement of the funds which we regard as unnecessary, time-wasting, shifting the goal post in the middle of the match and an attempt to further deny the indigenous shipping operators access to the funds.

We believe that the existing guidelines, which involve the Primary Lending Institutions (PLI), NIMASA and the lenders with shared obligations and risks, are rigorous enough to deter any defaulter.However, if there is going to be an amendment, we think it should be minimal and done without any fanfare so the real disbursement could commence.

Any further delay may exacerbate the speculation and hushed discussion among stakeholders that the funds may be subjected to further abuse similar to the type that occurred during the previous administration when it was alleged that part of it was used to fund elections of that year.

This speculation becomes more troubling as the 2019 general election approaches.Even though we don’t share from this sentiment but we appeal to government to expedite action towards eventual disbursement of the funds.

This gesture, we believe, will not only strengthen the financial capacity of operators to compete with their well-funded foreign counterparts but will also resuscitate not a few operators whose businesses have gone under.