Indigenous shipowners have bemoaned the consistent failure of the Federal Government to disburse the Cabotage Vessel Financing Fund (CVFF) to enable them thrive in their business after more than 15 years of contributing into the fund designed to expand indigenous fleet.
The latest promise, which like several others has again remained unfulfilled by the government, was made in December 2019 when the Minister of Transportation, Rotimi Amaeachi said he had secured President Muhammadu Buhari approval for the disbursement of the fund by January 2020.
A new committee was immediately set up by the Minister to develop guidelines for the disbursement of the fund. However, six months down the line, the Minister has failed to keep his words.
Speaking on the weekly SHIPS & PORTS Virtual Dialogue with the theme “Whither the Cabotage Vessel Financing Fund”, a member of the Nigerian Shipowners Association (NISA) Steering Committee, Mr. Tunji Brown, lamented that vested interests and the unwillingness of those in leadership position to develop indigenous shipping have been largely responsible for the non-disbursement of the fund over the years.
Mr. Brown, who dismissed claims of disunity among shipowners as a major factor hindering the disbursement of the fund, also queried the call for an amendment of the existing guidelines by the National Assembly, saying that the present guidelines are clear on the mode of disbursement to eligible shipowners.
He said, “We have the right Act and the guidelines that will enable us to disburse the fund but I think the problem is actually with leadership. We all know the purpose of the Act from the onset to support building capacity of indigenous shipowners and we have all contributed to the fund since inception.
“In 2008, an attempt was made to disburse and some of us were invited to submit our bids to NIMASA but somehow, along the line, it was stalled because of personal interests. I think we need to look at it critically beyond the guidelines and the Act. If truly the management of NIMASA and the Minister want CVFF disbursed within the next two months, they will do it because it is not rocket science. We have the Act and the fund, so it can be done. We really need to have people who are willing to actually support development of shipping in this country.
“They told us they want to disburse in January and they want to go through the National Assembly to change the Act; we know that is not possible. It took about a year or two to get the Act and took a while to get the guidelines approved at the time by the National Assembly so why are we looking at going through the Assembly to amend the guidelines? What we have today can actually work for all of us.
“If we have the right person driving it, we can move forward. You cannot personalize the CVFF. Every one of us has contributed, so you can’t just handpick some people to go and sit on our behalf on what concerns everyone. Here we are; 16 years down the line, nothing has been done,” he said.
On his part, former Director General, Nigerian Maritime Administration and Safety Agency (NIMASA), Mr. Temisan Omatseye, called for a review of the CVFF guidelines, which he insisted places too much risk on the banks. According to him, without an amendment of the guidelines and recommendations followed through to the National Assembly, it will be difficult to disburse the fund to shipowners.
He said, “The law states categorically that there is to be a guideline so the disbursement of the fund must be in line with the guideline. If the fund has not been released, of course there must be a problem with the guidelines. So what we need to look at is the guideline. Right now, you are telling the banks to take 100 percent risk for the fund. That means it is at zero risk to NIMASA. If the borrower does not pay, the bank has to reimburse the money. There is a conflict already that comes with the guidelines.
“You can’t ask the banks to take 100 percent risk and you are now imposing people on them. That cannot work. The processes that have been put in place to access the fund are too tedious and I don’t think any bank can take that kind of risk on what has been imposed on them by virtue of the guideline. That is where the conflict is. Therefore, we need to look at the guideline if it is in line with the Act. Nobody sitting on the seat of DG NIMASA will be comfortable with the present guidelines.
“All the Minister needs to do is to write to the National Assembly that he has cancelled the present guidelines and bring all shipowners together, prepare a new guidelines and go to the National Assembly for their signoff. The money they have there now as they claim cannot do anything for the shipping industry. If they have $200 million, we can use that to get another $800 million. With the money they have now, by the time they buy four to five tankers, what will that do to the maritime industry?”
Also speaking at the event, Founding President, Nigerian Shipowners Association (NISA), Chief Isaac Jolapamo, corroborated Omatseye’s position, saying that there is something fundamentally wrong with the guidelines and should be reviewed.
While calling for an audit of the fund to ascertain the actual amount in it, Chief Jolapamo recommended that the government use the CVFF proceeds to float a new national shipping line rather than give the money directly to shipowners.
“Our problem in the maritime industry is like a strong man without wisdom. Something is fundamentally wrong from when we started the CVFF and when the legal people hijacked it for whatever reason. It is a law now so if it is going to take three years to change the law and do what obtains elsewhere, I think it is better.
“We need to know what has been collected so far and what is in the account. We are supposed to look inward at NIMASA and what has happened there over the years and let people be accountable. It is because nobody is accountable, that is why the Minister would say NIMASA should bring a huge sum from the CVFF and move it to the Ministry’s account. I am 100 percent in support that the fund should be used to develop a national shipping line,” Chief Jolapamo said.