shippingposition
  • Home
  • News
  • Editorial
    • Vox Pop
  • Maritime safety
  • Oil and Gas
  • Personality
  • Health
No Result
View All Result
shippingposition

Home » Much ado about the Cabotage Vessel Finance Fund

Much ado about the Cabotage Vessel Finance Fund

by Joshua
March 29, 2021
in Editorial

The Cabotage Vessel Finance Fund (CVFF) is an essential part of the Cabotage Act, and that it has been untouchable for as many years as it has accrued.

With a lofty objective of deliberately reserving commercial transportation of goods and services within Nigeria’s coastal and inland waters for Nigerian-flag vessels and vessels that are owned by Nigerians, the Cabotage Act spells out four pillars upon which its implementation must rest.

The four pillars are that: Cabotage vessels must be wholly -owned by Nigerians; they must be registered in Nigeria, must be crewed by Nigeria and Nigerian shipyards must build and repair Cabotage vessels.

These pillars, especially the one that amplifies ownership of vessels by Nigerians, underscores the essence of the CVFF, which is akin to a contributory fund by the so-called Nigerian ship owners and beneficiaries of the Nigerian Cabotage system.

An important annexure to the Act is the Cabotage Vessel Financing Fund; a Fund which is derivable from the two percent deductions from all contracts awarded under the Cabotage regime. It was designed to enable indigenous shipping companies acquire adequate tonnage to be able to participate in coastal and inland trade, still currently dominated by foreigners.

The fact is that, since the collection started, no one has officially benefitted from the CVFF; all that we have been hearing are promises.

We recall that, at a forum organised by the News Agency of Nigeria in 2018, the then- Director General of the Nigerian Maritime Administration and Safety Agency (NIMASA); Dr Dakuku Peterside said the agency had concluded necessary documentation needed for the disbursement of the Cabotage Vessel Financing Fund (CVFF). He gave the accruals from the fund at that time to be in excess of US$100 million.

And in 2019, the DG also told journalists that the CVFF is already in the neighborhood of $124million, even as he raised fresh hopes of disbursement of the Fund to qualified Nigerian ship owners. But, it was never disbursed.

Under the CVFF guidelines, each beneficiary must submit application and needs to tie the loan application to a maritime project, for which 15 per cent of the project cost must be provided, having been pre-qualified by NIMASA.

NIMASA, which is statutorily mandated to disburse the CVFF, at a point appointed four banks: Skye, Diamond, Fidelity, and Sterling as Primary Lending Institutions (PLIs) for the CVFF.

A lot of stakeholders have raised one question or the other about the CVFF. A former Executive Director of NIMASA, Engr Nnadi Ogbuagu had accused the NIMASA DG of telling lies about the actual worth of the CVFF. He alleged that the figure which the DG bandied could not have been correct.

Similarly, a former chairman of the board of NIMASA, and currently Vice President, Nigerian Chamber of Shipping, Alhaji Tijani Ramallan had alleged misapplication of proceeds of the CVFF. He alleged that a former DG of NIMASA diverted the money to issues unrelated to maritime.

More importantly, Ramallan expressed disgust that the Ministry of Transportation, NIMASA and others wrongly behave as if the CVFF is a public fund. He says, the CVFF is a stakeholders’ fund and that it should be used for the development of shipping.

The fact is – the CVFF remains an unfulfilled dream of the initiators and drafters of the Cabotage Act.

There have been a lot of back and forth about the CVFF. At some point, there was an announcement that six companies had been prequalified to benefit from the fund; that was the last that was heard of it. If it is true that NIMASA had for a long time conducted due diligence on the six companies and handed over to their name Ministry of Transport, if it is also true that it is the Presidency that is delaying the disbursement, then our fears about the insincerity on the part of government may have been confirmed.

Perhaps, it is appropriate to ask at this point: what happened to the six companies that were shortlisted as qualified to access the CVFF a few years ago?

It appears that we have gone past the excuses of blaming the Federal Government and the Presidency. It also appears like the six companies (whose identities were not disclosed) are no longer in the picture.

If by its claim, the CVFF has grown in excess of US$200Million, why is it still being warehoused with the Central Bank of Nigeria (CBN), and why are we still at the level of forming committees upon committees.

While not subscribing to the allegation that the Fund may have been misappropriated, the non-disbursement of the CVFF is raising questions.

Between NIMASA and the supervising Ministry of Transportation and the Presidency, there is a lot that is going on that is detrimental to the success of Cabotage Act in general and the transparency of the CVFF in particular.

Back to the present: Now and again, we have been promised that the CVFF would ‘soon’ be disbursed. We have passed the route severally in the past!

It is a surprise that the incumbent leadership of NIMASA is following the same pattern; the usual practice is for every DG of NIMASA and the Minister of Transportation to dangle the carrot of disbursement of the CVFF in front of stakeholders, especially ship owners.

Between the DG of NIMASA, and the Minister of Transportation, there appears to be a conspiracy of not wanting to disburse the CVFF, or is there something unusual or untold about the fund that handicaps them?

Nigerian maritime industry stakeholders are tired of hearing this same song of; ‘we will soon disburse the CVFF’. Both NIMASA and the Ministry of Transportation are beginning to sound like a broken record.

It was the Minister; Mr Rotimi Amaechi who by himself, said in December 2019 that CVFF disbursement would commence in January 2020. This is March 2021. He didn’t say another process would be set up to begin another round of meetings over CVFF. This is tantamount to dishonesty and it further reinforces the fears that we all nurse.

Yes, we are told that, President Muhammadu Buhari has directed that that the Cabotage Vessel Financing Fund should be disbursed. Yes, to begin the disbursement, NIMASA has called for Expression of Interest from banks to act as Primary Lending Institutions.

But, the process to getting the funds is still far-off and it is our hope that the latest assurance of disbursement would not be like the past, when hopes were raised and dashed.


Related Posts

Nigeria, China Currency Swap Deal: A Baggage Of Failed Promises

Nigeria, China Currency Swap Deal: A Baggage Of Failed Promises

July 7, 2025
How NIMASA’s Inactions Cost Nigerian Seafarers Oppurtunities On Board Foreign Ships – Expert

For The Sake Of Nigerian Seafarers

June 30, 2025
Disunity ‘Killing’ Maritime Journalists

Disunity ‘Killing’ Maritime Journalists

June 24, 2025
Stakeholders Demand Clarity, Sustainability As Regional Maritime Bank Takes Off After 16 Years   

The Regional Maritime Development Bank Must Deliver On Its Mandate

June 16, 2025

Discussion about this post

Latest News

NPA Bags NASS PAC Transparency Award

NPA Bags NASS PAC Transparency Award

July 12, 2025

Nigeria Customs Says Claim Of Form ‘M’ Migration Charges False

CRFFN Showcases Reform Milestones, Dismisses Court Ruling Misinterpretation

NCMDLCA Faction Distances Self from Amiwero’s Court Action, Backs CRFFN on POF Collection

Customs Intercepts ₦9.2bn Worth of Fake Bedroom Booster, Others

Customs, NAFDAC Inaugurate Implementation Committee for 2024 MoU

Nigeria Customs Intercepts Container with Over 10,000 Donkey Genitals

Senate Hails Adeniyi’s Election as WCO Council Chair, Says It’s  a Major Win for Nigeria’s Global Trade Leadership

Oyetola Launches Door-to-Door’ Diplomacy for Nigeria’s IMO Council Bid

FG Urged To Link Warri-Itakpe Rail To Inland Ports, Road Networks

Red Sea Operation Rescues 4 More From Cargo Ship Sunk By Houthis

Shippers’ Council Set to Establish Border Information Centre at Idiroko, Bolster Trade Efficiency

kindly like our Facebook page

Health

Contraceptive Pills Can’t Cause Cervical Cancer – Expert
Health

Contraceptive Pills Can’t Cause Cervical Cancer – Expert

June 30, 2025

Mrs Roseline Akinlabi, Adolescent and Youth Sexual Reproductive Health Desk Officer, Osun Primary Healthcare Board, says contraceptive pills cannot cause...

ONIONS: The Good Old Healing Vegetable

KNOW YOUR BODY PARTS: The Liver

June 16, 2025
ONIONS: The Good Old Healing Vegetable

ONIONS: The Good Old Healing Vegetable

June 16, 2025
Why Prostate Disorder Cases Are Increasing Among Nigerian Men – Experts

Why Prostate Disorder Cases Are Increasing Among Nigerian Men – Experts

June 1, 2025
20m Nigerians Live With Mental Health Issues, Says WHO

20m Nigerians Live With Mental Health Issues, Says WHO

June 1, 2025
Health Facts You Didn’t Know

How Your Habit Affects Fertility

May 19, 2025
Fruits For Raining Season

Fruits For Raining Season

May 19, 2025
See Mental Illness Like Other Treatable Diseases – Says Suicide Survivor

Health Facts You Didn’t Know

May 19, 2025
Alligator Pepper: Benefits, FAQ, Side Effects, & Warning

Alligator Pepper: Benefits, FAQ, Side Effects, & Warning

April 28, 2025
Water And Health: The Relationship That Helps Life

Water And Health: The Relationship That Helps Life

April 28, 2025

© 2021 Shippingposition

Navigate Site

  • Home
  • About Us
  • Contact us
  • Privacy Policy
  • Sitemap
  • Terms

Follow Us

No Result
View All Result
  • News
  • Coast To Coast
  • Oil and Gas
  • Maritime Education
  • The Terminals
  • Maritime safety

© 2021 Shippingposition