Shipowners Urge FG to Commence Disbursement of $124m CVFF

Eromosele Abiodun

Stakeholders in the maritime and shipping sector of the nation’s economy have called on the federal government to commence the disbursement of the $124 million (N45.26 billion) Cabotage Vessel Financing Fund (CVFF), in line with its promise last year.

This, they stated, would help revitalise the industry and ensure that a larger percentage of Nigerians play in the industry and create employment for Nigerians.

Some ship-owners who spoke to THISDAY on the condition of anonymity said the decision by the government not to disburse the fund domiciled at the Central Bank of Nigeria (CBN) defeats the purpose for which the fund was set up.

Following relentless agitation by the Nigerian ship owners that the federal government disburse the CVFF in line with set down regulations, the Director General of the Nigerian Maritime Administration and Safety Agency (NIMASA), Dr. Dakuku Peterside had last year said the agency would commence the disbursement in 2019.

Peterside, who stated this in a chat with journalists in Lagos State, said the fund, which has increased to $124 million would be disbursed as soon as the Ministry of Transportation concludes the review of the guidelines for disbursement.

Speaking at the unveiling of the 2019-2020 forecast in Lagos recently, the NIMASA boss stated that contrary to what is been peddled, the CVFF is not enough to drive the industry in the country because shipping is a capital intensive venture.

According to him, “The maritime sector has the potential of contributing at least 10 per cent of Nigeria’s gross domestic products (GDP) in no distant future as Nigeria has the biggest market in African and generates about 65-7- per cent of cargo throughput in West Africa, and 65 per cent of all cargo heading for these regions will most likely end up in the Nigerian market.

“To enable Nigerians play major roles in the maritime and shipping sector, two things are critical. The first is asset building/ acquisition and the second is human capacity development. It is a known fact that shipping is capital intensive, the CVFF is not adequate to address the huge demand for maritime asset, so in addition, NIMASA is looking at other ship financing models.”

That, he said, was why the agency had been engaging with government at the highest level to push for special intervention fund, special interest rate and other incentives that will drive optimal performance in the sector.
“We shall not relent in our drive to put the right framework together to help beneficiaries and investors have good return on investment. The country is also making huge investments in human capacity development in the sector which means that more Nigerians will get involved in shipping especially in shipping operations.

“There has been consistent effort by the government to drive changes in the maritime and shipping sector through regulatory and infrastructural developments,” he said.

He added that the main public bodies regulating the maritime and shipping sector have all keyed into the government’s strategies to reform the operating environment and improve on her ease of doing business index, which has the potential of attracting more businesses to the maritime industry.

“The year 2018 offered government opportunities for strategic changes in policies so as to restore growth in the economy, invest in our people and build a globally competitive economy. The regulators and the stakeholders will continue to push for these reforms as our interest remains to develop indigenous capacity in the shipping and maritime sector to ensure a high-level playing field for operators to tap into the vast economic benefits inherent in shipping and we are happy to project a 2019 – 2020 period full of hope for investors and sustainable growth,” he said.

In an interview with journalists last week, Executive Director, Finance and Administration at NIMASA, Dr. Bashir Jamoh, had pointed out the lack of synergy or unity among stakeholders in the maritime sector has stalled the disbursement of CVFF.