Assurance by the newly appointed minister of Transportation, Engr Mu’azu Sambo, that the federal government will disburse the Cabotage Vessels Finance Fund (CVFF), no longer excite indigenous shipowners. If it were before, the news of the disbursement would have elicited excitement, joy and applause but, recent ministers’ promises and failures have reduced their hope in government getting the fund disbursed.
The minister had recently said in Port Harcourt that the CVFF is a low hanging fruit that would be disbursed in September to indigenous shipowners. According to him, the disbursement would help to increase capacity.
The minister said, “this is a fund that was established under the Cabotage Act in order to build domestic capacity. I want to say it here, that it is indeed a low hanging fruit. I will do anything within my power to make sure that fund is disbursed to Nigerians as quickly as possible so that Nigerian Shipowners can increase capacity as well as generate a welfare instead of patronising foreign Ships and money from such business taken out of the hands of Nigerians rendering us jobless and so on and so forth.”
He stated further, “if we get our acts right, the maritime industry can replace the revenue from the oil.”
But, stakeholders’ have said the recent promise was not the first time a serving minister would raised industry hope over disbursement of the fund.
According to them, the promise followed the same old and worn- out pattern of his predecessors whose assurances were made more out of political expediency than sincerity.
“It would be the seventh wonder of the world if the minister could cause the fund to be disbursed by December, this year. Enough of playing politics with the business fortunes of our hapless indigenous ship owners some of whose businesses have gone under,” a stakeholder who craved anonymity had said.
They, however, went down the memory lane saying, no fewer than 90 per cent of shipping companies owned by Nigerians have either completely shut down their operations or barely struggling to survive.
Some of the indigenous shipping companies include: Equitorial Energy, Oceanic Energy, Morlap Shipping, Peacegate, Pokat Nigeria Limited, Al-Dawood Shipping, Potram Nigeria Limited, Joseph Sammy, Genesis Worldwide Shipping and Multi-trade Group all in Lagos; Niger-Delta Shipping in Warri, Delta State; and Starzs Investment Group in Port-Harcourt, Rivers State.
Of all the companies listed above, only two can be said to be operating viable businesses while others, representing 83 per cent of the companies are either completely dead or are in comatose condition.
It was further gathered that all the companies are also heavily indebted to banks and are mostly unable to service the loans they took to buy ships.
However, most of the ship owners have resorted to selling their landed properties to enable them service their bank loans, while others have lost prime properties to the banks.
However speaking exclusively to LEADERSHIP, the former President, Nigeria Shipowners Association (NISA), Aminu Umar, said the minister should be given a benefit of doubt, saying indigenous shipowners couldn’t wait anymore for the disbursement of the fund.
According to him, the minister can get the disbursement done in six months since the guildelines have already been approved by the National Assembly.
He said, “We should give the new minister the benefit of doubt. That he’s saying it means he is ready to do the needful though the process has not commenced and due to that from my own side, I can’t say much but we are anxious and can’t wait to see shipowners benefit from the contribution they have made over the years.
Umar, the Chief Executive Officer of SeaTrans port group said,”Already, there is a guidelines for the disbursement that was approved by the National Assembly, so I assumed he will work on the guidelines that was approved, and the moment they put in that, am sure it will be done in less than one month or two months and the process will commence.”
He, however, called on the government to allow everyone that has contributed to the fund to benefit from it, saying whether the fund belong to everyone that contributed.
“I think is for everybody to benefit from it and the guidelines do not give restrictions on whether you are doing business now or you are not doing now, but what the guideline says is that whoever wants it should apply, and the Nigerian Marítime Administration and Safety Agency (NIMASA), will vet the credit together with the bank, so the PLI and NIMASA will make a recommendation for approval to be given.
“So unless they change the guideline, it does not make a restriction, so anybody that is in the industry now or before has a chance to be able to get it.”
Speaking on how the fund, he said, “I think you should understand that the $350million is only 50 per cent. The bank is going to give 35peecent while the applicant will give 15percent, so what it means is that ultimately if you take $350million, it is $700million in total.
“$350million is NIMASA portion of 50 percent. The Primary Lending Institution (PLI) will give 35 per cent and the applicant will give 15 per cent, so the money NIMASA has is 50 per cent of what the credit will be.
However, with $700million, I think it should be able to buy a lot of ships that can be able to work and the fund is an ongoing thing not something that would stop. I think it is a good development and we wish the minister will be able to commence the process immediately,” Umar said.
Also speaking to LEADERSHIP, a member of the steering committee, NISA, Capt. Taiwo Akinpelumi, also disclosed that he believed the minister will ensure the disbursement of the fund.
He said, “my candid opinion is that every leader has its strategy and if he says the fund will be disbursed, I have no reason to doubt his assertion because the truth is, if there is a political will for the disbursement then it will be done, so it’s not rocket science as their is a law that established CVFF and there is also a guideline for the disbursement.
“So, everything is in place, so as they say it will be disbursed and I have no reason to doubt whatever the minister has said. They say they will disburse it and i hope and pray that God will give him that grace and the political will for him to disburse it.”
“Don’t forget that we always look at $350million and the $350milliin is NIMASA’s 50 per cent contribution and that means when you look at the guidelines for the disbursement, NIMASA will put down 50 per cent, the bank which is the Primary Lending Institution (PLI) will put down 35 per cent and Shipowners will put down 15 per cent so that that means the $350million is 50 per cent of the money we are looking at, so if NIMASA releases that $350million, so the total amount we are looking at is at the range of $700million, that’s when the fund should be disbursed and at least let the law be tested because it is better to get 10-20 people benefiting and the fund is revolving in such that almost everyone benefits than to say the money is not enough and wait, so it is better for someone to benefit than nobody to benefit at all.
“The object at the centre of all this thing is the ship and if the ship is not there then every other thing is just in vain. What is important is a concerted effort to make sure there is expansion, place renewal and acquisition of ships so that once indigenous operators were able to increase their tonnages, renew their tonnages and all that, there will be an opportunity to employ seafarers, opportunities to grow capacity, and the infrastructure that we are clamouring for like shipbuilding and ship repairing and as well create jobs,” he said.