Fresh facts have emerged about the protracted delay in the disbursement of the Cabotage Vessel Finance Fund (CVFF). The contributory funds payable by shipowners have accrued for almost 20 years.
Findings revealed that a disagreement in interest rates proposed by the approved Primary Lending Institutions (PLIs) and the Nigerian Maritime Administration and Safety Agency (NIMASA) as well as hiccups in the 9% funding by the Nigerian National Petroleum Company (NNPC) Shipping are reasons behind the delay.
Speaking at a recent meeting between the new Managing Director of Nigerian National Petroleum Company (NNPC) Shipping, Mr. Ponas Gliatis, and the President of the Nigerian Chamber of Shipping (NCS), Mr. Aminu Umar, the Director General of NIMASA; Dr. Bashir Jamoh, revealed that the deadlock was primarily centered on a one per cent disagreement in interest rates. While the PLIs insisted on a 7.5 per cent interest rate, NIMASA advocated for a slightly lower 6.5 per cent.
He stated that this disagreement has become a significant obstacle, impeding the disbursement of the CVFF.
He explained that the NNPC Shipping had been foot-dragging on the 9% which it had agreed to pay out of the 15% that the Nigerian ship owners are expected to contribute to the cost of acquiring ships under the CVFF scheme.
Jamoh however expressed optimism during the meeting which held at the NIMASA head office in Lagos, that the discussions surrounding CVFF could be concluded within the next six months. He assured stakeholders of his commitment to updating the Minister of Marine and Blue Economy, Adegboyega Oyetola, on the deliberations and progress made.
However, ship owners’ reactions to the situation revealed scepticism and frustration. Otunba Sola Adewunmi, President of the Nigerian Shipowners Association (NISA), criticized the NIMASA Director General for not communicating with shipowners regarding the issues with the PLIs.
He expressed doubt about the proposed timeline. “Personally, I don’t believe him; he has never called any of us to say this is the issue we have”, he said
“Did he discuss it with any of the ship owners, this is a DG that refused to speak to ship owners, he only speak to people that he feels like speaking to, you can’t be negotiating on our behalf and you have an issue with the PLIs and you didn’t inform us and you are saying that’s the reason it was delayed. I don’t believe him, personally I don’t believe him, he has never called any of us to say this is the issue we have” he said.
On his part, another ship owner, Mr Sola Olatunji echoed similar sentiments, describing the CVFF as a political tool manipulated by authorities for over a decade. He questioned NIMASA’s sincerity in finalizing terms with money markets and labeled the ongoing discussions as “a serious deceit.”
‘I have expressed my views about this CVFF over and over again. If you look at the administration that has been involved in this endless CVFF, it’s all political tools by various authorities to manipulate the people in that particular sub-sector of the economy. It’s all propaganda. Don’t mind them. They want to borrow money from the bank to support shipping activities in Nigeria. There is nothing bad in that. It’s a common trend in other climes.
“More than a decade after, you are unable to finalise your terms with the money markets, yet you are flying this kite of disbursement of CV FF? This is a serious deceit over the years, and NIMASA has been doing this hatchet job” he said.
However, on his part, Aminu Umar, the President of the Nigerian Chamber of Shipping, expressed satisfaction with the proposed 6.5 per cent interest rate on CVFF, considering it favourable in Nigeria’s challenging fiscal environment.
Umar emphasized that the collaboration signified a crucial step towards fostering investment, job creation, and economic growth in Nigeria’s maritime sector.
“I think DG is the custodian of the CVFF. So, he says the timeline is six months, I expect that the timeline is six months, because everything relates and depends on that. So, I am very sure that this is one that he intends to meet. So, we will give him the benefit of doubt to see that he gets this done within six months”.
When asked if he is satisfied with the 6.5% interest rate he said, “looking at the Nigerian environment, it’s very good, you cannot get better than 6.5% anywhere in Nigeria. So negotiating up to 6.5% is a great work that they have done. So any ship owner who is doing business within Nigeria, will agree that 6.5 is perfect” he said.