General Buhari should investigate CVFF – Umar

Alhaji Aminu Umar is the Acting President of Nigerian Shipowners’ Association (NISA). In this interview with SHIPS & PORTS DAILY‘s Babalola Yusuf, he speaks on his association’s expectations of the incoming government, among other issues.



What are the expectations of the shipowners from the new government?

There are areas we will like the incoming administration to give some attention to when they have settled down. These are the areas that have been neglected by previous administrations.

One of them is the Cabotage Vessel Financing Fund (CVFF) which is for funding ship operators; it is being kept by the Nigerian Maritime Administration and Safety Agency (NIMASA). So far, no Nigerian shipowner has been assisted by the CVFF fund; some of us don’t even know the application process to access it.

Financing is a problem for us because shipping is a long-term business and it is capital intensive. It takes a minimum of five to 10 years to get returns if there is no turbulence in the industry. Not all banks are ready to fund such business. That is where the CVFF and the ship building acquisition fund comes in. This is different from the CVFF which is for vessels operating within the coastal waters. The ship building fund is levied on import and export vessels. We are aware that NIMASA collects a three per cent levy on all freight, of which a percentage is meant for the ship building fund. Just like the CVFF, we do not know the status of that fund. All these funds are supposed to assist in the long-term financing of indigenous shipping operations. But so far, this has not worked. These funds should not be restrictive; they should be accessible to those who want to succeed and the process must be transparent.


But some shipowners applied for the CVFF a few years ago. What happened?

I understand that about seven companies were shortlisted from those who applied. From the seven companies, only about two or three are players in the industry; the rest, no one knows them. To be honest, this fund is not meant for six companies. It is meant for all Nigerian companies that are willing to participate in shipping. For now, I do not think there is any NISA member that has been able to access the fund. Since we took over the NISA executive, we have not engaged NIMASA on the CVFFF but our predecessors did several times.


What is the present state of CVFF? 

On CVFF I don’t want to say much because to be honest, I don’t know how much that has accrued into the account and whether NIMASA is ready to disburse; I don’t know. A year ago, I saw some companies that have been shortlisted about six or seven companies and I have followed up to see whether they have been given the money and I gathered that they have not so to be honest I don’t know the processes of doing it. So, I expect after the election if the government settles down, they will look into the companies that are shortlisted and see whether they will see some of them.


Why is a NISA not asking question about the money or is there a conspiracy somewhere?

No, to my knowledge there is no conspiracy. The fact is we are just starting as an executive and it is something we will discuss with NIMASA to understand the position of the funds. So far and I know these are funds that are being contributed by shipowners and has been accumulated for years, I feel we will look at it together with NIMASA to see the guidelines and processes to access the funds and then we can come up and tell the members how they can access it so, let us leave it until we have a meeting with NIMASA and know the position because we don’t know.


Do you support training of seafarers abroad by NIMASA when we have MAN Oron and College of Fisheries?

To be honest, aside the cabotage, we intend to speak with NIMASA about the training of seafarers because one of the problems we are having is dearth of seafarers. The capacity building is like giving first hand training to people who are trained, though it is good to have scholarship for people to have education and come back but there is need for them to improve the capacity of MAN Oron, School of Oceanography and College of Fisheries and I know there is another university being built in Warri, I think there is one aspect they did not do which is partnering with shipowners because seafarers training does not end in classrooms. After going to the classroom, there is need to have seatime training so after school training, there is need for sea training, and on that they are supposed to partner with shipowners and this is NISA they should sit with us to discuss certain number of training, certain numbers of incentives that we can work out together and we intent to come up with a plan to make a proposal to submit to the management of NIMASA and discuss this partnering because as a shipowner when you take a seafarer you subject him to training so by him being trained in school alone does not make him efficient enough to come on board a ship and start the work. You have to give him some training and give him some seatime so all this we have to work together and we have discussed at our exco and that we should come up with a proposal and send to NIMASA and say the number of people you train we the shipowners can prepare them for training and we can take them for proper training because they are our manpower, it is what we need, some shipowners have no option but to bring expatriates which is at a very high cost for us why because the manpower that we have cannot do this jobs on some of this modern ships that have sophisticated equipment that need people with special skills to handle so we want to discuss this with NIMASA so that we can find a way out of getting these people trained.


What other policy of government has been a hindrance to indigenous shipping?

There is a policy of the Central Bank of Nigeria that has resulted in the loss of so many jobs in the industry. The policy is that for oil marketers to access the CBN funds and open a Letter of Credit, they must discharge the refined petroleum product being imported into Nigeria in another country. For the CBN, that is the only way the fuel can be considered as an import. Now, the problem is that 95 per cent of the vessels that go to Lome or Cotonou port to discharge cargo are vessels that were originally headed for Nigeria. There are other micro industries that are associated with the discharge of petroleum products from super tankers; husbandry agents who bring a change of crew, ship suppliers, ship agents, ship-to-ship transfer equipment providers, boat hire and so on. Many of these types of businesses, which were previously in existence in Nigeria, are dead because the oil marketers now discharge products at Lome or Cotonou.

The few companies that exist have to move their operations to Lome and Cotonou but they employ people in the countries where they are based. They are creating jobs in other countries but they are Nigerian companies.


What effect has this policy had on the industry and the economy as a whole?

It is a negative policy. There are many types of businesses that could have come up due to discharging operations but they are dead. The movement of these vessels, super tankers and tankers in Lome or Cotonou has caused the economies of these countries to flourish while ours suffers. We want the support of NIMASA in convincing the CBN that this policy is harmful.

We intend to discuss with the CBN so that those vessels that stay at Lome or Cotonou should come over and do their operations in Lagos. This has been on for more than four years now but it wasn’t always like this. Why do we develop other countries when we have Nigerians who are starving? Why should the discharging of these vessels not take place in Lagos? I know that my predecessors at a time met with the CBN and NIMASA over this but nothing has been done. We also have problems with the development and training of seafarers in the industry. Our seafarers are not adequately trained.

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