Banks Begin Disbursement Of $350m Cabotage Fund Next Month

Barring any last minute changes, shortlisted indigenous shipowners will get the first disbursement of the $350 million Cabotage Vessels Finance Fund (CVFF), by March 2023 from the Primary Lending Institutions (PLIs).

Also, the minister of Transportation, Mu’azu Sambo, met with the managing directors of the five approved PLIs in Abuja, to discuss the disbursement procedures.

LEADERSHIP reports that the funds available for disbursement was slightly over N16 billion and $350 million dollars and applicants of the Fund would make an equity contribution of 15 per cent while NIMASA would make an equity contribution of 35 per cent and 50 per cent would be provided by the banks.

However, according to a ministry source, shipowners have applied for the fund with various Primary Lending Institutions (PLIs), with their 15 per cent contributions.

 “Beneficiaries have applied with their 15 per cent contributions to the PLIs. Also, first disbursement will be made in March, 2023,” the source who craved anonymity said.

Moreover, the Transportation minister has called for a concerted effort by key stakeholders to make the quick disbursement of CVFF a reality. 

In a statement yesterday, the Federal Ministry of Transportation, said, the minister disclosed this while meeting with the representative of the heads of the PLIs that include the managing director of Polaris Bank; United Bank of Africa (UBA), Union Bank, Zenith Bank, Jaiz Bank, the director general, Nigeria Maritime Administration and Safety Agency (NIMASA), Dr Bashir Jamoh and  the MD Shipping, Nigerian National Petroleum Company Limited (NNPCL) and other stakeholders.

The minister reiterated that President Buhari had approved the immediate disbursement of CVFF.

He said, “The President also approved that the two per cent charge that makes up the Cabotage Fund should continue to accrue to the  CBN Treasury Single Account (TSA) and each time the account hits $50 million, the minister of Transportation should, on the recommendation of NIMASA, direct the CBN to release the amount to any of the five banks for disbursement.”

The minister noted that it has taken 17 years to get presidential approval for the disbursement and charged the key stakeholders to expedite action on the necessary details to facilitate the quick disbursement of the funds. 

“We have received the approval of the President to disburse the funds. It is now left for the key players to actualise the approval by the President,”he said.

Sambo said the maritime sector would be a major income earner for the country if properly managed, adding that it was fulfilling for him to lead the historic process of disbursing the CVFF.

Section 44 part VIII of the Cabotage Act 2003 provides for the establishment of the Cabotage Vessel Financing Fund (CVFF) and a 2% deduction on cabotage-protected trade earnings goes into the savings for the development of indigenous tonnage (ships) in Nigeria.

The Bankers and other critical stakeholders had hours of closed-door deliberation after the minister’s remark, to chart out a clear course for the final disbursements in the coming days.