By Seun Ibiyemi
There indications that Indigenous shipowners under the aegis of the Nigerian Shipowners Association (NISA) has abandoned Cabotage Vessel Financing Fund (CVFF) as it has commenced moves to create a $500million maritime fund in collaboration with foreign financiers to empower operators acquire assets and help them grow their fleet.
Disclosing this in a chat with journalist, a member of NISA and Chairman of the defunct Nigerian Maritime Expo (NIMAREX), Ayorinde Adedoyin said the fund, which is expected to come into fruition next year would be loan out to operators at a single digit interest rate.
According to him, “What the fund is meant to do is to encourage Nigerians to go and bid for jobs and when they win, the fund will buy the asset on a five -year loan at a single digit interest.
“This is something we have been working on for almost five years. What we are trying to do is to be able to pull money together like $500m dollars and I think we are almost getting there. What the fund will do is that it will acquire assets for operators, not only vessels but other ancillaries of the shipping industry and they can own it. It can be leased to them for about five to seven years and afterwards when they finish paying, the assets become that of the original owners.”
Ayorinde said the fund will serve as an alternative that would help increase capacity of indigenous shipowners beyond the Cabotage Vessel Financing Fund (CVFF), which operators have been unable to access for the past 18 years.
“It is not all about CVFF, we too are actually thinking and we hope and pray that by early next year, the maritime fund should come into fruition.
“We realized overtime that the cabotage law without funding is like a waste of time. Everybody was hoping that the CVFF will be used to empower shipowners to acquire more assets but that has not happened. But the truth is, there is a limit to what CVFF can really do.
“So that is the whole idea of looking at partnership with foreign funders to put funds together with a minimum of about $500milllion as this can actually help local shipowners with one digit interest rate. If we are not getting two or four percent like the foreign shipowners at least if we are getting seven or eight percent is still better than the 23 to 25 percent that we will be getting from the local banks which is part of why most of the shipowners in Nigeria can’t grow and why so many of them have lost their fleet because the Nigerian banks still not understand maritime funding.
“I don’t blame them (banks) really, they can only use money that they have, and in most cases, greed also comes into being because the majority of them still gets this money at two to three percent but the funny thing is that they still give the money out at about 12 to 13 percent. So why make a spread of about 10 percent on the money that you are borrowing?” he asked.