Baring another whimsical change of mind, the Cabotage Vessels Financing Fund (CVFF) will soon be disbursed to qualified Nigerian ship owners in line with the spirit of the cabotage law. This announcement of the imminent disbursement was made by the Minister of Transportation, Rotimi Chibuike Amaechi, at the recent Nigerian Shippers Council Stakeholders Appreciation Night 2019, held recently in Lagos.
Amaechi told his apparently unexcited audience of ship owners that he had received presidential approval to disburse the CVFF. He said he would meet NIMASA and the Nigerian Shippers Council (NSC) the next day “to look at the dynamics of the fund” while the ministry would begin meetings with indigenous ship owners in January to commence the disbursement process.
“In January, we will invite the operators for their proposals and to see the nature of their businesses and how they can get the aid. The President has given the approval and we will begin the process to disburse it by next year,” Amaechi declared.
Ordinarily, coming from the Minister of Transportation, one would have seen the disbursement of the CVFF as a fait accompli. But this is not the first time Nigerian ship owners had been treated to such empty declarations. He and his protégé in NIMASA had made the pronouncement several times. In fact, coming from Amaechi, who had once, during one of his many unguarded utterances and tantrums, said that the CVFF would not be disbursed so long as he remained the minister of transportation, one would be right to take the announcement with a pinch of salt.
One can recall that in December last year the same promise of disbursement was made by the Director-General of NIMASA, Dakuku Peterside. As the 2019 Presidential election campaign was heating up, Dr. Peterside, who was speaking to ship owners at the annual workshop and dinner of the Ship Owners Association of Nigeria (SOAN), said plans had almost been concluded to disburse the fund.
Of course, the ship owners and maritime observers who had been used to such gimmicks did not take the pronouncement serious, especially given the spirit in charge of the nation’s political landscape at the time. Their indifference to the promise was subsequently proved right as one year after, the elections over, nothing has happened.
Again in March this year, the NIMASA DG said barring any last minute change of plans, the ministry of transport would be disbursing the CVFF. The DG who was represented at an event hosted by a group of journalists in Lagos by the agency’s Executive Director of Finance and Administration, Dr. Bashir Jamoh, warned that the fund must be used for the purpose it was meant –perhaps to drive home the seriousness of his statement.
On several occasions, the CVFF had come close to disbursement. At a time, forms were filled, the screenings done. And stipulated conditions fulfilled. At the end, the successful applicants never saw the loan or even a whiff of it. One recalls when six companies were said to have emerged successful after a gruesome screening exercise of numerous applications. The news was all over the place. But the disbursement was still delayed, and when it was time to do that, the minister of transport was changed and a new minister had to get the approval of the President before the disbursement could be done. The approval never came.
Even when a good opportunity was created for the disbursement of part of the fund to establish a national carrier, the CVFF still remained untouchable. Having become clear that indigenous ship owners could not muster the 60% equity participation allotted them for the floating of the proposed national carrier, Amaechi who had maintained that the CVFF would not be used to establish the national carrier, at a stage, said government was going to use part of the CVFF to bail out screened and qualified ship owners.
But after setting up a committee to screen the applicants and to work out the modalities, Amaechi and the government still made a U-turn, leaving their plan to refloat a national shipping line to collapse like a pack of cards.
To most stakeholders, using part of the CVFF to assist screened and qualified ship owners was the right thing to do. To them, it was the most appropriate way to disburse the fund without the beneficiaries touching it or diverting it to other uses. But government thought otherwise.
The CVFF, a well-thought out compliment of the nation’s Coastal and Inland Shipping (Cabotage) Act 2003, was provided to assist indigenous ship owners with the acquisition of vessels to enable them to take full control of the captive market created for them by the cabotage law. Both the stakeholders that lobbied extensively for the enactment of the law and the lawmakers had recognized the urgent need to have a financing fund that would empower Nigerian shipping operators to acquire vessels in order to operate maximally in the cabotage trade, as a stepping stone to ending the foreign domination of the nation’s shipping sector.
But 19 years after the enactment of the Cabotage Act, and over 15 years since the money started accumulating in the CVFF, it has remained untouched, with previous administrations and the present one refusing to let the fund serve the purpose for which it was established. After several promises of disbursement, and sometimes putting the machinery in motion for the purpose, everything would become a mirage, as in most cases, those promises and disbursement efforts turned out to be mere political gimmicks –a case of the more you look, the less you see.
Now that the President has given the nod for the Fund to be disbursed to owners of the fund, and the Minister has affirmed that this would begin in January 2020, barely one month from now, what measures have been put in place for a smooth disbursement that would guarantee that all the fears of government that led to the protracted delay are addressed?
To many of the prospective beneficiaries, the disbursement guidelines and some necessary things ought to have been done before announcing the disbursement. For instance, the actual figure lying in the Fund ought to have been ascertained first. As a matter of fact, how much has accrued to the fund since inception has been a source of bickering and controversy over time. Various amounts had been bandied about. Some had said the fund was worth $100bn, some $300m and still to some it is $700m and $124m.
But NIMASA, the agency collecting and warehousing the fund, said the amount was a little over $100m. Even as the authentic source, the agency’s inexact figure did not do anything to douse the speculation and the controversy. This is more so considering the many years the 2% collection has been accumulating, plus the interests in the banks and the waiver fees foreign companies have been paying to continue to play their leading role in the country’s cabotage trade.
However, whatever amount that is said to be in the account, one thing that is clear is that the fund can only grow, and has continued to grow. Stakeholders recall that it is more than five years now since they were told that the Fund had hit $100m. Saying that the amount in the fund now is just a little above $100m gives a lot of room for doubt –and more speculation.
According to former President of Ship Owners Association of Nigeria (SOAN) Engr. Greg Ogbeifun, no one seems to know for sure what the fund is worth. Hence it has to be audited to ascertain how much is in it. Engr. Ogbeifun had also earlier in the year made the same call.
While speaking to Vanguard newspaper on the latest disclosure of imminent disbursement of the fund by the minister of transportation, Ogbeifun said, “It is a very welcome development that the president has given the approval, but I think it is necessary for things to be done properly. Number one, it is important that the actual amount in that account be established because nobody seems to be very sure as to the actual amount that is in that account and to do that, my sincere opinion is that the minister should get the NIMASA (Nigerian Maritime Administration and Safety Commission) to appoint a world class accounting firm to carry out audit of that fund from inception to date.
“That way we will know the exact amount that is supposed to be in the account because the minister cannot say he wants to disburse money if he does not even know how much money is in there. So this exercise is the most important exercise to be carried out.”
Ogbeifun further said, “My company has been contributing to that fund for more than 10 years and we have the record of every dollar and cent that has been collected from us by our charterer for the fund. And I am sure other ship owners would have their own records; NIMASA who receives the fund should have their records, the banks’ records should be there. The International Oil Companies that collect the funds at source from us should have their own record. So it is quite easy to do that. When that is established, then they will know to what extent that money can go to meet the requirement of the ship owners. When that is done, for me, any ship owning company that has not contributed to that fund yet should not be in the first batch of people to be considered.”
He emphsized that measures should be put in place to ensure that the loan is not diverted by the beneficiaries, arguing that “the applicants must present viable, verifiable transactions that they want to be funded and those transactions should be such that have the ability to pay back the money.”
He counselled the minister to sit down with relevant financial experts to work out the guidelines and modalities that will ensure that the fund is protected and the recipients use the money for the purpose for which it is meant.
Speaking in the same vein, the Chairman and CEO of Skelas Group, Olayiwola Shittu, harped on the need for guidelines, denouncing the government announcement of the plan to disburse without first putting the guidelines in place. According to him, the announcement has left the door open for those with connection to begin lobbying to be amongst the beneficiaries.
“With the announcement, everybody will start putting pressure, using who they know to be a beneficiary, especially when they do not have anything at stake and that is how they are going to rubbish that laudable effort. The minister should have met with the stakeholders, done the due diligence, done the guidelines and everybody should have contributed to it before announcing the disbursement.”
These, indeed, are also the views of almost all the stakeholders who are watching to see if the CVFF, the apple in the sky, will really drop –and how.