FG Approves Immediate Disbursement of Cabotage Fund by Five Banks

Gilbert Ekugbe

President Muhammadu Buhari has approved the immediate disbursement of the $ 350 million Cabotage Vessel Financing Fund (CVFF) by five banks.
The Minister of Transportation, Mu’azu Jaji Sambo, disclosed this yesterday during the flag-off of the third phase of the Nigerian Seafarers Development Programme (NSDP) TERRA II in Lagos.

According to the minister, the disbursement would increase the indigenous capacity in the maritime sector.
“The President of the Federal Republic of Nigeria, Muhammadu Buhari has approved my request for the disbursement of the Cabotage Vessel Financing Fund. I believe that finally, we are going to break the 17-year-old jinx that has hindered the expansion of the industry.

“When we disburse these funds in days to come to the beneficiaries deserving of it, we have made a case that the funds belong to you, ship owners. Mr. President is a man who respects the law and he is on the same page with us that we should proceed with immediate effect,” Sambo said.

He added: “We will be liaising with the minister of finance for budget implementation and the governor of the Central Bank of Nigeria (CBN) to work immediately with the approval. We have pledged to the president that they would continue to allow the funds to go into the treasury single account. However, whenever the money hits the threshold of $50 million, the CBN upon recommendation from NIMASA and the Federal Ministry of Transportation would inspect the transfer of the funds to the primary lending institutions.

“This milestone development, together with this ceremony, go hand-in-hand because there is a nexus between seafaring, ship, capacity building and making sure ships are available and with this approval, I am sure our indigenous capacity would grow higher and not even the sky will be the limit,” he added.
Responding to questions about the primary lending institutions in charge of the funds, the minister listed Union Bank, Polaris, Zenith Bank, United Bank of Africa and Jaiz Bank.

He added that the guidelines for the funds are very clear, saying that applicants will contribute an equity of 15 per cent, NIMASA 35 per cent while the balance of 50 per cent would be provided by the approved banks.

“Other additional requirements or eligibility will include but not be limited to such things as a contribution to the fund. Other things we will be looking at will be the issue of off-taking. If you do not want your loan to go bad, the easiest way to guarantee payback is that the applicants show you that they already have off-taker for their vessels,” the minister said.

The CVFF is an intervention fund created by the federal government for the development of indigenous shipping capacity in Nigeria for the maintenance of existing vessels or the purchase of new ones.          
The ministers, however, stated that the collapse of the Nigerian National Shipping Line (NNSL) has no doubt created a gap in the manpower development of the shipping industry in Nigeria, especially in the area of shipboard training and manning.

He also said the implementation of the coastal and inland shipping policy increased the demand for Nigerian seafarers which at that time was in gross shortage.
“In addressing the aforementioned shortfall the Federal Ministry of Transportation and Nigerian Maritime Administration and Safety Agency (NIMASA) midwifed the Nigerian Seafarers’ Development Programme (NSDP) in 2008. The programme as an intervention was designed to train Nigerian youths to become seafarers.

The choice of foreign Maritime Training Institutions (MTIs) was mainly based on the capacity and certification of the Institutions in the area of maritime training Standards of Training, Certification and Watchkeeping (STCW) by International Maritime Organisation (IMO),” he added.
He noted that the initiative targeted training globally competitive officers that would erase the unfortunate discrimination that existed between local and foreign-trained officers in practice.

“However, efforts are ongoing in the area of upgrading local Maritime Training Institutions to enable them to take up the NSDP training shortly.
“It is worthy of note that the NSDP has so far been a success story and has further advanced the human capacity development programme of the federal government,”  the minister explained.

He added: “I have been made to understand that the programme had produced a female tugboat captain in the person of CANUS EBINIPRE ROBINSON and several deck mates and second engineers currently sailing in both coastal and international vessels. The NLNG has in the meantime employed more than 44 NSDP officers and still counting. This is quite commendable and calls for more concerted efforts towards ensuring that the NSDP graduates are gainfully employed,” he averred.

He pointed out that the success of the laudable policy cannot be over-emphasised therefore the Federal Ministry of Transportation will continue to encourage and partner with NIMASA on NSDP and other policies on the development of a sustainable maritime-based economy (Blue Economy).

“We urge the beneficiaries to be good ambassadors of the nation and justify the massive investment in you. This programme is a rare opportunity that is highly sought after by your peers, but providence has placed it on you and must be guarded jealously for the development and benefit of the nation. We will continually monitor your progress in the programme and will not hesitate to discipline the recalcitrant ones among you,” he urged.
Earlier, the Director General, of NIMASA, Dr. Bashir Jamoh, said the disbursement of the funds would be in two folds, which he described as the naira and dollar components.

For the naira component, he said the fund is about N60 billion while the dollar component is about $350 million.
He said the flag-off marked another milestone on the human capacity development drive of the maritime industry as championed by NIMASA.
He said the programme was designed to train Nigerian youths up to degree level in Marine Engineering, Nautical Sciences and Naval Architecture in some of the best Maritime Training Institutions (MTIs) abroad and to position them to compete effectively in the global maritime industry.

He lamented that the number of Nigerian seafarers on ocean-going vessels had depleted over the years and the urgent need to boost it adequately for effective implementation of the coastal and inland shipping policy of the government, informed the initiative.
“At some point, it was said that Nigeria had less than 10 seafarers on ocean-going vessels, while countries like the Philippines had over 400,000 and currently earn over $6 billion in forex inflow from their seafarers employed around the world.

He said countries like India, Indonesia and China also have their nationals all around the world working in the maritime industry, expressing the hope that with continuous progress made and better projections in the NSDP, Nigeria will soon be among the major players in the global maritime sector.
“It is important to note that from inception to 2020, the programme has enrolled 2,041 students, while 892 are now licensed deck and engine officers including naval Architects, the rest are in their final stage of the programme,” he said.