$360m CVFF Disbursement: Shipowners Demand Single-digit Interest Rate
Nigerian shipowners are calling for single-digit interest rates as the federal government moves to disburse the long-awaited $360 million Cabotage Vessel Financing Fund (CVFF).
The fund, established under the Coastal and Inland Shipping (Cabotage) Act of 2003, is aimed at empowering indigenous shipping companies with structured financing for vessel acquisition-a goal that has been stalled for over two decades.
Last week, the minister of Marine and Blue Economy, Adegboyega Oyetola, directed the Nigerian Maritime Administration and Safety Agency (NIMASA) to commence the disbursement process, rekindling hope among local operators. The move is seen as a strategic effort to boost the capacity of Nigerian shipowners, reduce capital flight, and stimulate the local maritime industry.
However, industry stakeholders have raised concerns over potential interest rates, noting that prevailing commercial lending rates in Nigeria often range from 16 per cent to over 30 per cent, depending on the bank and borrower profile. Shipowners argue that such high rates would undermine the fund’s purpose and limit its impact, as only large, well-established companies typically qualify for the lower end of the rate spectrum.
The president of the African Shipowners Association (ASA), Captain Ladi Olubowale, CVFF to Nigerian shipowners at a single-digit interest rate will create abundant growth opportunities, boost capacity building, local content development and develop Nigeria as a maritime nation in Africa.
Captain Ladi Olubowale, who is also the managing director of Seamate Maritime Integrated Services Limited, described the involvement of Nigerian banks in the disbursement by the Nigerian Maritime Administration and Safety Agency (NIMASA) as a perfect strategy that will bring about transparency and elimination of dubious borrowers.
The ASA president stated this in Lagos while commending the minister of Marine and Blue Economy, Adegboyega Oyetola, over the directive to NIMASA to begin the CVFF disbursement which NIMASA promised to start in August 2025.
Captain Ladi Olubowale maintained that the CVFF disbursement directive also shows that President Bola Ahmed Tinubu’s administration is working towards building the nation, thus complementing the efforts of the Nigerian National Petroleum Corporation (NNPC) in the development of the downstream and upstream sectors of the nation’s petroleum industry.
He pointed out that many developed and developing nations, such as Japan, China, and Indonesia, have export funds for ship development and banks in these countries are also involved in ship funding, noting that Nigeria should not be an exception.
According to him, the majority of banks in Nigeria do not have specific desks for maritime but rather put maritime under energy desks, stressing that with their involvement in the CVFF disbursement, this lapse will be corrected, and desks will be created for the maritime industry.
“This disbursement will unlock a lot of things as Nigerians will be owning ships and more opportunities for Nigerian flag ships to trade and compete in the coastal waters of Nigeria and Africa which is already dominated by foreign vessels. This is the time we can play in our field.
“Banks involvement is a welcome development and a perfect strategy that will plug into all value chains. Without banks, it would be free money for everyone. But the banks being on top of the initiative and NIMASA coming in to stand as guarantor, shipowners need not be heard.
“Transparency is very key. Things have to be done in line with the international best practices. CVFF is an opportunity for ship ownership. All processes and conditions must be met. Bank involvement now will stop the failure of experience as there will be a committee to check and scrutinise all intending borrowers,” said Captain Olubowale.
The managing director of Seamate Maritime Integrated Services Limited noted that a lot needed to be put in place for a seamless disbursement of the fund, saying, “disbursement is just one part of it; readiness, execution and implementation have to be connected from end to end.”
While speaking on the preparations of the African Shipowners Association (ASA) for the CVFF disbursement, Captain Ladi Olubowale said ASA Africa and ASA Nigeria are made up of companies that own and operate ships that trade not only in Nigeria but in intra-Africa, pointing out that all ASA Nigeria members are licensed by NIMASA and their vessels are adequately certified by the International Maritime Organisation (IMO) regulations and Classification society standards.
He added that the association has a database of all its members who trade and where the cargos are having carried out extensive studies and advocacies to identify where they are.
“ASA is all over Africa; we are different. It is for companies that have ships that are fit for purposes. We own ships that trade intra-Africa and international oceans. It is not just about having ships but cargo, and we know where the cargo is – dry or wet. We have a database of our members who trade, and our ships are certified by IMO. We are fully prepared for the CVFF,” said Captain Olubowale.
For Seamate Maritime Integrated Services Limited, he said the CVFF disbursement is a dream come true, having explored various banks for funding but without success because the banks do not know the trade.
According to him, many shipping companies have failed in Nigeria and elsewhere in Africa because the shipowners want to manage the business, but this is not the case at Seamate.
He informed that Seamate has signed a lot of ship management agreements with many technical companies to manage its fleet and this, he said with emphasis, would create job opportunities for master mariners, ship surveyors, crew and many others.
“We are going to lash out on their experiences and competency and bring on diverse fleets into the system once we can get the funds. We have demonstrated the value that shipping is not about acquiring ships but connecting the supply value chains. We are building up our management in preparation for the CVFF disbursement,” said the Seamate boss, disclosing that the company, registered in three different African countries, can train cadets which is one of its core values.
“As one of our fleet strategies, we will have one ship solely dedicated for trading and Cadetship training,” he disclosed.
He maintained that the decision of the Minister of Marine and Blue Economy, Adegboyega Oyetola, and the Director General of NIMASA, Dr Dayo Mobereola, on the CVFF disbursement would turn Nigeria into a hub of qualified, trained and certified seafarers and its impact will be felt by the whole of Africa.
Ahead of the August disbursement, Captain Olubowale advised the NIMASA management to start engaging, sensitising and educating stakeholders on what they need to know to qualify for the fund and to drive a fleet that can trade within Nigeria and Africa and also develop our capacity.
“Disbursement is not only the solution. We need to bring back our master mariners to classrooms to nurture young people who will drive the fleets. There should be a lot of engagements to get stakeholders ready for the CVFF. If we have ships today, and with the competency we have now, foreigners will still take advantage of it because we have not developed our capacity to grow our end-to-end supply value chains of shipping.
“How do we meet up with issues such as decarbonisation, Green Ship, SDG 1 and SDG 14, and leverage our local contents? There should be a strategic roadmap for the deployment of these. It should be run as an end-to-end supply chain. Once Nigeria stands, the rest of Africa stands,” the Seamate MD submitted.
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