Conditions set by Primary Lending Institutions (PLIs), have threatened commencement of disbursement of the Cabotage Vessels Finance Fund (CVFF), LEADERSHIP investigation has shown.
Recall that the minister of Transportation, Mu’azu Sambo, had announced that Union, Zenith, Polaris, UBA, and Jaiz Banks were confirmed as the designated PLIs’ for the disbursement of the funds by the Presidential approval that the ministry received.
It was gathered that the introduction of 15 per cent equity contribution from the indigenous shipowners may delay the process as the shipowners have said they lack the wherewithal to provide the funds to the PLIs for disbursement of the CVFF.
Speaking, a member of the Nigerian Shipowners Association (NISA), Rowaye Jibril, at the general meeting of the association, lamented that the 15 per cent equity contribution demanded by PLIs to indigenous shipowners could pose a stumbling block to accessing the fund.
According to him, majority of Nigerian shipowners are already in huge debts and have their assets confiscated by banks and the Assets Management Company of Nigeria (AMCON).
Jubril also lamented that the Nigerian National Petroleum Company (NNPC), is currently posing a great threat to local shipowners as they hold on to jobs based on ‘right of first refusal’, alleging that even when they don’t have ships they charter vessels to execute the jobs.
He said, “Most of the shipowners cannot meet up with the 15 per cent, the DG of NIMASA had to be sensitised about the fact that most Nigerian shipowners don’t have jobs and that is what led to the death of many shipping companies. Many offices in Apapa are moribund today because the shipping companies are dead. If we continue this way, I don’t see how we are going to meet up with the criteria and even when it is disbursed the money will go down the drain again.”
“NNPC is contending with us now. They don’t have ships but they hold on to jobs based on ‘Right of First Refusal’ and later go out and charter vessels which they use. Until someone stops them but nobody is ready. These are stumbling blocks to the growth of the industry.
Also speaking, the chairman Board of Trustees, NISA, Chief Isaac Jolapomo, noted that even though the conditions cannot be easily changed except through the National Assembly, he stressed that many ship owners do not have the capacity to provide 15 percent equity.
Jolapamo, lamented the ridiculous requirements and collaterals requested by banks on loans to Shipowners, saying the committee set up by the association was working on the 15 per cent equity to be provided by ship owners.
He, however, explained that indigenous Shipowners could explore an arrangement utilised by oil and gas operators who receive 100 per cen equity from the Nigerian Content Development and Monitoring Board (NCDMB), and Primary Lending Institutions.
He continued, “If you want to raise 15 per cent of N10 million, how much is it today? This is not easy for Shipowners to achieve. However, our committee that is working on the CVFF has been told that even the NCDMB doesn’t provide 15 per cent and we can also work towards that. It is achievable, we are looking at a situation where Shipowners will not have to provide 15 percent because If a Vessel owner has a job to do, that ship is enough collateral to the bank in other maritime nations.
“In our own case, they will want impossible collateral. The CVFF disbursement cannot revive shipping in Nigeria until we adopt the method of saying we want to do it ourselves,” Jolapamo noted.
Also speaking, the former general secretary of NISA, Tunji Brown, disclosed stated that 15 percent conditions to disburse the CVFF to Shipowners shouldn’t be issue to debate or worry over.
He noted that if all Ship owners from NISA and SOAN can liaise together with one voice, they can get 100 per cent equity from NIMASA just like the Nigerian Content Development and Monitoring Board (NCDMB) in the Oil and Gas sector.
Brown, noted that, equity conditions are not yet sacrosanct until the federal government’s CVFF committee comes up with a guideline for the disbursement.
He, however, call for unity among shipowners, saying for shipowners to benefit from CVFF disbursement, there must be unity of purpose.
“The 50, 35 or 25 per cent are not sacrosanct. It is not like this is what it is until CVFF disbursement committee comes up with a presentation to the minister, then that is when it becomes a guideline.
“The discussion about not being able to meet up with the 15 per cent equity funding is not what we should worry about. I can say categorically that if we want 100 per cent from NIMASA we can get it because other sectors such as the Oil and Gas are getting 100 percent. NCDMB are getting 100 percent. We can use the same module and use the assets as collateral. We must drive it together with SOAN,” Brown stated.
We’ve got the edge. Get real-time reports, breaking scoops, and exclusive angles delivered straight to your phone. Don’t settle for stale news. Join LEADERSHIP NEWS on WhatsApp for 24/7 updates →
Join Our WhatsApp Channel
