$350m CVFF: NIMASA Gives Banks 72-hour Ultimatum

The Nigerian Maritime Administration and Safety Agency (NIMASA), on Tuesday, issued a 72-hour ultimatum to the Primary Lending Institutions (PLIs), to release modalities for the disbursement of $350 million Cabotage Vessels Finance Fund (CVFF).

The PLIs that were approved for the disbursement of the fund are, Zenith, Polaris, United Bank of Africa, Jaiz and Union bank.

Briefing journalists after meeting with the PLIs in Lagos, the director general NIMASA, Dr Bashir Jamoh, stated that the modalities to be released include the interest rate, tenure, collateral and requirements needed to access the fund.

According to him, the interest rate must be of international best practices because the money to be released to the banks are in Foreign currencies and not local currency. 

He, however, stated further that the disbursement of  CVFF can’t start without stakeholders engagement, saying that was why the agency met with PLIs.

He said, “We can’t start disbursement without stakeholders engagement, therefore, stakeholders engagement starts today. we are on track, we have started with the PLIs and all the five of them are here today. We have listened to them and they listened to us and from all indications they are ready for us as well.”

“What we want them to do now is to allow them come up with collective decision and that cannot take more than 72 hours. As we are leaving this boardroom, they will sit down and decide on date because we don’t want them to come individually to us with their own interest rate, we want them to have a consensus and a standard template on the disbursement of funds as well as the interest rate. This is what we advised them to do and as soon as they finish that, we will then invite the shipowners,” he said.

When asked what will be the interest rate and the collaterals needed by shipowners to access the loans, he said the guidelines would disclose that.

“The guidelines will tell us the interest rate and how the interest rate supposed to be, the tenure, and the collateral, because we won’t allow them to come and make the shipowners feel very insecure.”

“I mentioned to them on the issue of collateral, you all have NIMASA money with you so all these things will be deliberated among themselves, let’s allow them to go through our guidelines seriously and see how they can adjust within themselves because  we are giving them international currency not Nigerian currency, they cannot start looking at Nigeria lending rate but the uniform international best practices so we are still on track because the guidelines stipulated everything, “he said.

Speaking earlier, the managing director Jaiz bank, Dr. Sirajo Salisu, assured indigenous shipowners that the fund would be disbursed to them at the appropriate time.

He, however, informed the shipowners that CVFF is not a grant or money that can be received without paying back to the banks.

“We will try our best to partner with the beneficiaries or the proposed beneficiaries of these funds and I believe they are much aware that this is not a grant, this is not a money that they will just take away, this is money that is meant for a purpose and we will ensure that that purpose is achieved to the benefits of the country.”

Also speaking the director, head of enterprises, Polaris bank, Femi Aribaloye, also stated that whatever that will be needed by the banks to ensure the disbursement will be carried out but raised concerns on the risks involved on the part of rhe banks

“Whatever it is that we needed to do in terms of structure and interest will be carried out, but i think the ultimate or the most important thing here is to ensure that this thing is successful and that’s why we are here and that’s why this particular funds is now being disbursed in collaboration with the bankers.

“We are also very much aware of the environment which we operate in, we know things can be a little bit turbulent, policies, economic situation might change so, i just want to find out since its also within the purview of the Ministry of Transportation, if there is anything that can be done to further minimize the risk that the PLI’s are going to be carrying, we look at the chance of possibility of a partial guarantee because as financial institutions, we would like to ensure that everything is done rightly,” he said.