Again, Uncertainty Trails Disbursement of CVFF

Uncertainty seems to trail the disbursement of the Cabotage Vessel financing funds (CVFF) timeline as a specific date for the disbursement is yet to be ascertained.

You will recall that the Federal Government had announced that it would disburse the Cabotage Vessel Finance Fund (CVFF) to indigenous shipowners after about 15 years delay.

Amaechi had stated that his ministry had finally received the approval of the President, Muhammadu Buhari (retd), to commence the disbursement of the fund by January 2020.

However, speaking yesterday during a stakeholders meeting with ship owners, the Minister disclosed that before the funds can be disbursed, a committee has to be set up which will be headed by the Director General of NIMASA and four other stakeholders who will come up with guideline for disbursement of the CVFF.

He said before he became the minister, the fund was initially applied to building university, building faculty of maritime in different universities but however assured that this time around it will be applied to shipowners directly.

According to him “What we have agreed today is to set up a committee that will come forward with the proposed guidelines which will be presented to the National Assembly.

``It is the committee that will determine if it will be a single digits or not,'' he said.

Amaechi further stated that as part of efforts to mitigate the risk involved in the disbursement,  financial institutions would be involved and the fiscal risk would be borne by the banks involved.

"The banks will be involved in developing the criteria for the disbursement of the fund, so the risk will be borne by the lending institutions", the Minister said.

The minister also noted that the committee would determine the interest to be inserted in the procurement of CVFF.

Speaking also, the Director General NIMASA Dr. Dakuku Peterside said the purpose of the meeting was to discuss the CVFF and the provision for disbursement.

In his words: "you are aware that the meeting was conveyed at the instance of the honorable minister of transportation. It's was to discuss one single item, the Cabotage  vessel financing fund for which the minister has gotten authorization from mr president.

" So after extensive consultation, it was decided by the stakeholders here that the committee be set up to come up with a draft guideline which the honorable minister will study and pass on to the National Assembly for approval in line with the provisions of the cabotage.

"After then,  we will move to the next phase of actual disbursement using the banks as platform to disburse the fund.

When asked if the fund will be disbursed  before the second quarter of the year, the DG stated that the disbursement  will be determined  by two factors, firstly he said if the National  Assembly  approves the proposed guidelines secondly the financial  institutions. 

"Well, that will be determined by two factors, one and the most important one, when the National Assembly approves the proposed guidelines, that will determine to an extent what will happen, the second will be that after the guideline, the provisions of the guidelines which will be religiously, followed by participating banks or bank whatever.

 "So, that will determine so, if stakeholders meet up with the requirements placed by the bank and of course it will be dispersed.

"So I don't think you expect that there will be some magical solution will follow due process. This is a government of the rule of law Simply for the due process.

He again stated that the total fund in the CVFF is about $200 million