April 21, 2024

Reps back NIMASA planned disbursement of $700M cabotage vessel finance fund


Oredola Adeola


The outgoing House Representatives have given approval to the Nigerian Maritime Administration and Safety Agency (NIMASA) to continue with the disbursement of the $700 million Cabotage vessel fund.



Hon. Legor Idagbo, Chairman, House of Republic Committee on Nigerian Content Development and Monitoring charged to interface with the Minister of Transportation and the Director-General, NIMASA on how the funds have been applied over the years, in the presentation of findings at plenary during the week, said that investigation established that due process was followed in the process of disbursement.



EnergyDay’s checks showed that the Coastal and Inland Shipping (Cabotage) Act of 2003, established the Cabotage Vessel Financing Fund, CVFF to boost the development and growth of indigenous ship/vessel purchase capacity by providing financial assistance to Nigerian operators in the domestic shipping business.



The Federal Government had earlier directed NIMASA to release the fund to indigenous ship owners to take control of the nation’s coastal and inland shipping business, as part of the Federal Government’s commitment to grow the indigenous capacity of Nigerians to own vessels.



Applicants of the CVFF would make an equity contribution of 15 percent while NIMASA would make an equity contribution of 35 percent; and 50 percent would be provided by the banks.


Henry Nwawuba had earlier in May 2023, during plenary session, recommended the suspension of the disbursement of the fund pending the outcome of House investigation.



Hon. Nwawuba informed his colleagues that the federal government is planning to disburse $700 million from the funds to Nigerian shippers but that the lawmakers have no details of the total accruals into the fund.




He stated that there has been no reliable data on the inflow into the fund since the Act came into being in 2003, while also alleging that the ministry of transportation and Nigerian Maritime Administration and Safety Agency (NIMASA) has misappropriated the fund.


Hon. Idagbo on behalf of the Committee in his presentation at the plenary on Thursday emphasised that indigenous and domestic operators need to show more capacity that will stop the Nigerian National Petroleum Company Limited (NNPCL) to award contracts to foreign shipping companies.



This according to him is contravening the Cabotage and Nigeria Oil and Gas Industry Content Development (NOGICD) Act.



He therefore commended the NNPCL for its commitment to awarding the shipping contracts to indigenous companies that have built capacity to the level where they can successfully execute these contracts.



The Committee Chairman said the Committee discovered that the total funds of $360 million in the Cabotage Vessel Finance Fund (CVFF) account with the Central Bank of Nigeria (CBN) represents 50 percent, while the remaining counterpart funds of 50 percent were from stakeholders and banks which was 15 percent and 35 percent respectively.


Hon. Idagbo explained that the House should ensure that NIMASA disbursed the funds in compliance with the extant laws and laid down guidelines for the said disbursement.


He said, “The Committee requested the NIMASA and the Ministry of Transportation to provide detailed data on the total amount accrued to the Fund and disbursements since inception.



Dr. Bashir Jamoh, Director General of the NIMASA, had in a statement earlier obtained by EnergyDay said that the funds available for disbursement were slightly over ₦16 billion naira and $350 million dollars.



He said, “What we have collected so far is in two folds made up of Naira and Dollar components. So far, the Funds available under the CVFF in Naira component is around Sixteen Billion naira (₦‎16,000,000,000:00), while contributions in Dollar component hover around the Three Hundred and Fifty Million Dollar mark ($350,000,000:00).”