Former Managing Director of the Nigeria Shippers Council (NSC), Dr. Kingsley Usor, has cautioned the Federal government on the planned disbursement of the Cabotage Vessel Financing Fund (CVFF) to indigenous shipowners.
Usor spoke with SHIPS & PORTS against the backdrop of the recent announcement by the Minister of Transportation, Rotimi Ameachi, that the Federal Government had given approval to disburse the fund put at $200 million from January 2020.
Usor advised the government to set up a consortium of banks with inputs from experts in the sector to drive the modalities for disbursement of the fund in order to avoid repeating the errors of the defunct Ship Acquisition and Ship Building Fund (SASBF).
He said, “If you disburse to people, three quarter of the fund will go into wrong hands. It has happened before and it will happen again because they will use it for something that is not shipping, more so because it is not in commercial principle but political. When commerce comes face to face with politics, politicians take the easier way of making sure that those who will influence political decisions are looked after more than those who are commercially oriented.
“Disbursing is not the issue because the money is there already but can they pay back if the trade falls? Is the Central Bank of Nigeria involved because trade goes up and down? If it goes down, the ship that carries the trade will not make enough money to pay the mortgage. So there are so many questions to be answered and certain things to be put on line that must be followed strictly. If you give it to people who are (not) in the industry, they will squander it.
“Let there be a consortium of banks that will be set up for disbursement of the fund with the approval of the Central Bank of Nigeria (CBN) and not NIMASA or any agencies of government. I know CVFF is a specialised field and what it needs is beyond what our banks have, so we need experts to work with them.
“The banks will look at the application of those applying for the funds, and their capacity to decide if they can manage a shipping company. It is not just to make pronouncement that we will release money. When they release it, how do the shipowners pay back, if the trade falls? These are the issues. If you look at faces because the person is a politician or friend of yours, the money will disappear.”