NIGERIA now has $141 million (about N22.4b) in its Cabotage Vessels Financing Fund (CVFF), which was opened in 2003 to help Nigerian ship owners in their vessel acquisition drive.
The fund is being managed by the Nigerian Maritime Administration and Safety Agency (NIMASA). It is a product of levies collected from ship owners on contracts executed within the country and a percentage of the agency’s yearly income.
Last year, NIMASA planned to disburse the fund through four primary lending institutions, including Diamond Bank, Skye Bank, Fidelity Bank and one other bank to avoid the recurrence of an incident 16 years ago when over $100 million was disbursed to ship owners in the country for vessel acquisition, only for them to default in paying back the loans, which were given out without collateral.
Last year, the banks came out with guidelines for loans under the scheme. They said shipping companies that intended to benefit from the disbursement from the fund through them would need to understand the standard requirement for the award of contracts by contract-awarding companies, particularly the International Oil Companies (IOC).
Besides, the banks said the loan-seeking shipping companies would need to procure good and relatively new vessels, as they would be subjected to the same criteria and process applied to the general banking public.
Most importantly, the banks said the intended beneficiaries would be made to produce evidence of long-term contract, besides the ability to motivate ships crew for sincerity and loyalty.
Although, the stage was set last year to disburse loans from the fund when the value was $71 million, Director General, NIMASA, Patrick Akpobolokemi, told The Guardian why the agency failed to go ahead with the loan disbursement.
Akpobolokemi said he was unaware that recommendations had been made to the Transport Minister, Idris Umar, for the fund’s disbursement through the banks.
His words: “I am not aware of such recommendation. Disbursement from the fund is not something we want to do in a hurry because any mistake we make in the process will be subjected to public criticism.
“We are taking our time to do it because it is public money. We have to be careful so that the money gets to the right people.”