Since the creation of the Cabotage Vessels Finance Fund (CVFF), there has not been more concerted effort to disburse the fund than now. This effort was due to the approval secured by the Federal Ministry of Transportation from former President Muhammadu Buhari to disburse the fund.
However, due to this approval, the Nigerian Maritime Administration and Safety Agency (NIMASA) is set to kick off the disbursement of the fund anytime from now.
Also the 9th national assembly gave NIMASA approval to disburse the fund after the outcome of its investigation revealed that the money accrued to the fund has been intact.
However, after securing necessary approvals, NIMASA will disburse the fund to only competent and qualified indigenous shipping companies that have met the criteria set by the government.
To achieve this, the agency had met with chief executives of the five appointed Banks, otherwise known as the Primary Lending Institutions(PLIs).
The banks namely, Union, Zenith, Polaris, UBA and Jaiz Banks have given guidelines and modalities for the loan. To lend credence to the fact that the disbursement of the loan would kick off soon, NIMASA had already concluded the fine- tuning of its own modalities on the facility with its consultant, while in adherence to the task given them by NIMASA, the five banks on their part have also put together the requisite guidelines for the disbursement.
As part of measures to make it easy for the beneficiaries to repay the loan, NIMASA ensured that the Nigerian National Petroleum Company Limited (NNPCL) takes up 9 per cent of the 15 per cent of the loan to be repaid by the prospective beneficiaries even as shipping companies have been accessing the opportunity.
However, NIMASA has ensured and insisted that the Primary Lending Institutions must give out the Fund to the prospective beneficiaries at single digit interest rate to make it easy for repayment as the Agency has emphasised that is not a grant but a loan facility.
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The need for NIMASA to have the CVFF disbursed to shipowners is also to enable local shipping companies have the requisite number of fleet to participate in the Cabotage business and as such reduce the dominance of the trade by foreign shipping firms to the barest minimum.
The plan disbursement of the Fund is no doubt a step in the right direction, considering the tremendous benefits the step holds for the maritime sector and the Nigeria’s economy. It is however expected that the Fund, when disbursed, would be properly managed, while the beneficiaries would adhere to the laid down regulations on the disbursement.
Speaking to LEADERSHIP, a maritime lawyer, Kasarachi Opara, described the steps taken by Jamoh as commendable and reassuring, adding that the decision of this administration to give out cabotage fund to indigenous shipping operators, though belated, should be applauded and Kudos given to the Buhari led federal government for taking that bold step unlike the past administrations.
Opara however expressed concerns on the implementation of the necessary guidelines by the designated banks as required by the apex maritime body.
He said, “ I must commend the present DG of NIMASA for his outstanding performance that has raised the hope of practitioners in the industry.
“ My concern is more on the implementation of these processes by the designated banks. It is one thing giving an order and another thing implementing the order given.
“ Nigerian commercial banks are not best of friends when it comes to loans because they make the loans practically impossible for beneficiary to pay back, because of their high and unreasonable interest rates and so many other charges attached to the same loan which largely contribute to failures in repaying loans generally.
“ There should be a standard and reasonable requirement of what stands as acceptable collateral to cut across board for designated banks.”
Opara advised NIMASA to come up with a “technique to ensure strict compliance with the laid down procedures for disbursement by the banks and repayment of the loan by the beneficiaries to actualize the set objectives of the government so that there will not be any repeat of SASBF experience”.
He, however, commended the NIMASA DG on the whole process, saying he has demonstrated determination to disburse the fund.
He said, “So far, NIMASA needs to be commended for the steps so far taken. I will say that he has shown commitment considering the momentum put in the whole process. He has met with the five banks where he demonstrated body language showing clearly that his agency is ready to disburse the fund.
“In doing, NIMASA has even let the banks know that they should not introduce unnecessary collateral that will scare the benefitting shipping companies. Yet, Jamoh did not stop there, he made it clear that government does not want the mistake of the past to be made, so the fund when given will be paid back”
Speaking to newsmen in an interview recently after an engagement with Cabotage Operators in Nigeria over the disbursement of CVFF, Mike Igbokwe, maritime lawyer, who stated that ship owners started contributing the money in CVFF since 2003, said that its long overdue and time for government to use the funds for the purpose for which it was established.
“We need to follow the provisions of the constitution and the Cabotage Act in the disbursement of the fund. According to section 80 of the constitution, public funds that were for specific purposes are not paid into the Consolidated Revenue Fund, and the CVFF is one of the special purpose funds. The government must use it for that purpose,” he said.
According to Igbokwe, many people have been calling for the establishment of Maritime Bank using the CVFF Fund.
To achieve that, it means that NIMASA must go back to the National Assembly to amend the Cabotage Act because Maritime Bank was not one of the purposes for establishing the CVFF.
“Government must not divert the CVFF because it would be invalid, unconstitutional; and illegal to use CVFF for maritime bank,” he stated.
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