$100m CVFF stalled

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…Ship owners fault NIMASA after 14 years of establishment of CVFF

…CVFF is fraud – Prince Adedoyin Ayorinde

By Oluyinka Onigbinde

Ship Owners have faulted the constant delay of Cabotage Vessel financing Funds stalled in the Central Bank of Nigeria (CBN), 14 years after it was established to boost local content in the shipping industry.

Known as the Cabotage Vessel Financing Fund, (CVFF) the fund was created by the Coastal and Inland Shipping (Cabotage) Act, 2003, to promote the development of indigenous ship acquisition capacity by providing assistance to Nigerian operators in domestic and coastal shipping.

Section 42 Part V111 of Section 44 of the Cabotage Act empowers the Nigerian Maritime Administration and Safety Agency (NIMASA) to collect, deposit and administer the fund under guidelines proposed by the Minister of Transport and approved by the National Assembly.

The Act also limits beneficiaries of the fund to Nigerian citizens and shipping companies wholly owned by Nigerians. The CVFF is funded through two per cent surcharge of the contract sum performed by any vessel engaged in coastal trading; and monies generated under the act including tariffs, fines and fees for licenses and waivers.

However in spite of the poor health of many local shipping companies for which the fund was set up under the Coastal and Inland Shipping Act, 2003, commonly known as the Cabotage Act, the ship owners are yet to access the funds

The process for the disbursement of the funds started since 2012, with the agency (NIMASA) maintaining that the process was still ongoing for the disbursement of the funds.

In a chat with Prince Adedoyin Ayorinde, an indigenous shipowner who spoke with Nigerian NewsDirect over the weekend said the whole process of the CVFF was a fraud and scam.

According to him “I am tired of talking about the CVFF because the whole process of the CVFF seems to be fraud.

“The same old story we hear in time past is what they have kept telling us, we are tired and as a matter of fact the CVFF is our money but since they have decided to keep repeating the same story for us every time, then there is nothing really to talk about.

“In fact I am planning leaving the maritime industry soon, I am tired of the maritime industry because I can’t buy a ship in Ghana not to talk of saying I want to buy one in France, so I don’t really have much to say. Ships owners are tired of this whole process we will soon disburse it, it is in this bank, it is this amount, it is that amount, so much talking without action won’t get us to anywhere, let NIMASA do the needful if CVFF is not a fraud” He said.

Another ship owner who spoke with Nigerian NewsDirect on condition of anonymity said over 10 operators were swimming in indebtedness running into N600 billion.

This he said had made many indigenous ship owners to back out of the business due to lack of funds.

However during a cocktail parley with stakeholders in the ship and maritime industry recently, the Director General of NIMASA, Dr.Dakuku Peterside told newsmen that the agency had concluded every necessary documentations needed for the disbursement of the Cabotage Vessel Financing Fund (CVFF) currently estimated at over $100 million.

According to him “we are determined to disburse the CVFF according to the laws and regulations that I can I say with all seriousness

“The current debt financing regime cannot support ship financing in Nigeria, in many countries we get negative coming to borrow money to finance shipping in some countries it’s one percent.

“The maximum ship building company is three percent so, a man who wants to get the same facility at 25 percent cannot compete with that of three percent

“So we agree that, that is a problem and we must do something to tell our financial institutions that ship building is a peculiar area unlike every other area and financing shipping is long term.

“So one of the major advantages of the CVFF is marching the funds coming from financial institutions this will help to crash the rate of borrowing and that’s why we are passionate about disbursing the CVFF that will come at nothing with financial institution fund that will come at 25 percent interest rate, so the CVFF will help in crashing the rate from25 percent to one single digit.

“Also the CVFF has the capacity to attract foreign funds that will attract smaller digit so we are looking at getting the best deal for our people.” he said.

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