The Cabotage Vessel Financing Fund (CVFF) was established alongside the Nigerian Coastal and Inland Shipping (Cabotage) Act of 2003, to empower indigenous ship owners to take control of the nation’s coastal and inland shipping business, otherwise known as Cabotage trade.
The CVFF is a two per cent contribution by indigenous ship owners involved in coastal and inland shipping trade in Nigeria’s maritime domain. Its payment actually started in 2004, when the Cabotage Act implementation started.
Since then, it has become a source of interest, disagreement and mistrust between NIMASA and marirtime industry stakeholders, especially ship owners, who have been requesting for information about the fund, and
Sometime in 2022, a group of stakeholders approached a Federal High Court in Ikoyi, Lagos to compel the Nigerian Maritime Administration and Safety Agency (NIMASA) to disclose details of accruals and disbursements of the controversial Fund.
The order was granted and the agency, in full compliance with the provision of the FOI Act, NIMASA furnished details of the CVFF collection.
The CVFF was confirmed to have accumulated to N29,912,410,730.83, while the Dollar component was given as $57,030,085.40.
The agency also added that, “no amount has been disbursed from inception, however, six companies have been recommended to the Honourable Minister of Transport for disbursement and approval is being awaited”.
The fund has since accumulated beyond the 2022 figure, even though the actual figure has since remained official secret, which made some stakeholders to have also alleged at a point that the CVFF may have been misappropriated.
Arguably, the CVFF remains one of the greatest headaches of NIMASA. Its successive Directors General have waded through the cacophony of arguments and bitterness that the non-disbursement of the fund has generated. In return, they have offered explanations and even gave deadlines that were never met.
The incumbent Minister of Marine and Blue Economy; Mr Adegboyega Oyetola, as recent as last week at an engagement with stakeholders acknowledged that disbursement of the CVFF would support the growth and development of the shipping business in the country.
He told the gathering that the Ministry of Marine and Blue Economy was committed to delivering the disbursement of the CVFF to enhance efficiency, transparency, and competitiveness in the sector.
Sadly, the stakeholders’ engagement ended without any concrete commitment about what to do with the Fund.
This non-committal has been the lot of CVFF and the usual approach of either the Minister or the DG of NIMASA.
The closest the Nigerian maritime industry has got to the promise land concerning the CVFF was the December 12, 2022 approval by the then-President. This also did not result in anything tangible, since the Fund still remain in the custody of NIMASA through the Central Bank of Nigeria (CBN).
The collection and disbursement of the CVFF is backed by the provisions of Section 42(1)-(2) of the Cabotage Act 2003. The intended aim is to promote the development of indigenous ship acquisition capacity by providing financial assistance to Nigerian operators in domestic coastal shipping.
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 opens the space 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 supervising Ministry
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 then-Minister of Finance, the then-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 immediate 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 was not disbursed, even though President-Muhammadu Buhari reportedly granted approval for 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.
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 heard later was that the Federal Government would set up a committee to oversee the disbursement.
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 of Marine and Blue Economy 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.
Between NIMASA and the supervising Ministry, 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 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 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.
The fear is that; the Federal Government may have no intention of disbursing the CVFF. We pray that the new DG of NIMASA will proof us wrong
