In June last year, a ship owner and member of the Nigeria Indigenous Ship owners Association (NISA) Mr Ayorinde Adedoyin raised an alarm that the Cabotage Vessel Financing Fund (CVFF) is beginning to look like a scam.
About the same time, the President of the Shipowners Association of Nigeria (SOAN); Dr. Mkgeorge Onyung raised a similar fear.
After the immediate past Transportation Minister; Mr Rotimi Amaechi resigned, the SOAN President appraised the apparent hopelessness about the failed promises of disbursement of the CVFF. He expressed total disappointment.
We recall that to address lack of capacity among indigenous ship owners in Nigeria, the CVFF was included in the Coastal and Inland Shipping Act of 2003 otherwise referred to as Cabotage Act. The essence is to provide funds for vessel acquisition among the indigenous operators.
The source of the fund is a two per cent contribution by indigenous ship owners from every contract executed in the nation’s waters.
The collection and disbursement of the CVFF is backed by the provisions of Section 42(1)-(2) of the Cabotage Act 2003, which aims to promote the development of indigenous ship acquisition capacity by providing financial assistance to Nigerian operators in domestic coastal shipping.
Sadly, since the commencement of implementation of the Cabotage Act in 2004, indigenous ship owners have looked forward to the day the CVFF would be disbursed.
With foreign shipping companies flouting the nation’s Cabotage regime at will, the disbursement of the CVFF to indigenous operators was expected to increase indigenous capacity to a level that allows for competition with their foreign counterparts. But, this has not been.
There have been several reasons and failed promises from both the Nigerian Maritime Administration and Safety Agency (NIMASA) and the Ministry of Transportation.
Perhaps, the most shocking of it all, was the claim in 2021 during a maritime event in Lagos by the then-Minister, Mr Rotimi Amaechi, that the Minister of Finance, Zainab Ahmed, had said the CVFF does not belong to indigenous ship owners, and that it was a government fund meant to be used for public project. The Minister then directed the indigenous ship owners to write a protest letter to that effect!
Also cautiously toeing the line of the Minister of Finance, the Director-General of Nigerian Maritime Administration and Safety Agency (NIMASA), Dr Bashir Jamoh, during a briefing with maritime journalists wondered why somebody would claim ownership of a fund and still want to borrow from such a fund.
But a ray of hope later came when the incumbent Minister; Muazu Jaji Sambo was appointed. While bemoaning non-disbursement of the fund, he had assured stakeholders that he would do everything possible to ensure that the funds were disbursed before the end of 2022.
His words: “I want to say it here that it (CVFF) is indeed a low hanging fruits and I will do everything within my power to make sure that the fund is disbursed to Nigerians as quickly as possible, so that Nigerians ship owners can increase their capacity and as well generate wealth here instead of patronising foreign ships owners and money from such business is taken out of Nigeria, rendering us jobless”.
Well, the fund is yet to be disbursed, there appear to be a ray of hope. In December, the Minister announced that, President-Muhammadu Buhari has finally approved the disbursement of the CVFF “with immediate effect”.
The Minister confirmed that the President approved the disbursement following convictions that the money actually belongs to shipowners.
It’s already more than one month that the directive was given for immediate disbursement of the fund, yet we are still foot-dragging.
All things being equal, this Minister will vacate office by May 29, 2023, and we dare state here that Mu’azu Sambo will be assessed based on this promise.
The fact is that, since the collection started, no one has officially benefitted from the CVFF; all that we have been hearing are promises.
Under the CVFF guidelines that are already in public domain, 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.
At a point, NIMASA which is statutorily mandated to disburse the CVFF appointed four banks: Skye, Diamond, Fidelity, and Sterling as Primary Lending Institutions (PLIs) for the CVFF. But this has changed. We now have five lending institutions, namely: Union Bank, Polaris Bank, Zenith Bank, UBA and JAIZ bank.
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 has also changed
After the assurances of immediate disbursement, what we are hearing now is that the Federal Government will set up a committee to oversee the disbursement.
Another curious development is the demand by the NIMASA DG that indigenous ship owners, particularly the associations; NISA and Ship Owners Association of Nigeria (SOAN) must unite and possibly collapse into one indigenous ship owners association to facilitate disbursement of the CVFF
Listening to the DG of NIMASA last week at the colloquium organized by the media in honour of late Otunba Kunle Folarin gives a clear indication that the Federal Government and NIMASA may not commence disbursement any time soon.
He confirmed that a committee will be set up, as well as series of meetings between the agency and the PLIs and ship owners at different times.
He gave the impression that, contrary to the Minister’s directive of immediacy in the CVFF disbursement, there is actually no urgency.
We hear that NIMASA had earlier shortlisted six companies as first beneficiaries of the fund after due diligence had been conducted on them, and handed over their names Ministry of Transportation,
We had been told that it is the Presidency that is delaying the disbursement, which appear untenable any longer, going by the December 2022 declaration by the Minister.
The fact is that, the CVFF remains an unfulfilled dream of the initiators and drafters of the Cabotage Act.
Perhaps, the critical starting point for the Minister is to ask NIMASA what happened to the companies that were shortlisted as qualified to access the CVFF a few years ago. This is because it appears like the six companies (whose identities were never disclosed) are no longer in the picture.
Perhaps, Minister Sambo should be reminded that the immediate past Minister of state (who also acted briefly as Minister); Senator Gbemi Saraki actually told maritime industry stakeholders that there exists a list of shortlisted beneficiaries.
While we don’t subscribe to tardiness in the disbursement, we are perturbed by the landmines that NIMASA is setting on the path of ship owners.
After the cries by ship owners, after the previous excuses and the assurances, we should not be at the point of setting up committees after the Minister’s directive.
Previously, NIMASA had blamed the Presidency for delaying the disbursement of the CVFF. Now the Presidency has absolved itself. Between December 10, 2022 when the Minister conveyed the approval of President Muhammadu Buhari and equally gave a directive that disbursement should start with immediate effect and now, we can count about six weeks. Yet, nothing has been done, except meetings and assurances.
Between NIMASA and the supervising Ministry of Transportation, it does appear like there is a lot that is going on, that is detrimental to the success of Cabotage Act in general and implies lack of transparency in the CVFF in particular.
It is a surprise that events are taking the same pattern. The usual practice is for every new DG of NIMASA and every new Minister of Transportation to dangle the carrot of imminent disbursement of the CVFF in front of stakeholders, especially ship owners. But, we have passed this route severally in the past!
Between NIMASA, and the Ministry 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.
If the then-Minister; Mr Rotimi Amaechi said in December 2019 that CVFF disbursement would commence in January 2020. This is January 2023, and we are still being told the same story. This is tantamount to dishonesty and it further reinforces the fears that we nurse.
The fear is that, this government may have no intention of disbursing the CVFF.
We pray that the new Minster will proof us wrong, but he has until May 2023 to do this.
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