A former Director-General of the Nigeria Maritime Administration and Safety Agency, Temisan Omatseye and Ship Owners Association of Nigeria have called for a probe of the $195m Cabotage Vessels Financing Fund.
The CVFF was inserted in the Coastal and Inland Shipping Act of 2003, (Cabotage Act 2003) to provide indigenous ship operators with funds for vessel acquisition.
Funds for vessel acquisition is made from two per cent contribution by indigenous ship owners from every contract executed in the nation’s waters.
It was noted that the fund which is in the purview of NIMASA has never been disbursed.
Omatseye disclosed that there is a need for the CVFF account to be audited.
He added that the guideline for the disbursement of the fund also needs to be worked on.
The former DG of NIMASA in an interview with Punch said, “The whole guideline cannot work. You cannot expect what was set up in 2003 to work in 2022.
“They should go and audit the money from the first day the contribution started until now; they should audit the CVFF account. There is an account, so they should go and audit the account on how the money has been disbursed, if it has not been disbursed then what happens.
“My challenge presently is that you know the guideline said there should be a Primary Lending Institution-that is a bank. The bank is supposed to be responsible for processing the loan facility and that is what the guideline says.
“60 per cent of the fund will come from the CVFF, the bank will cover 35 per cent and the borrower will make an equity contribution of 15 per cent, that is what the guideline says.
“Now the issue presently is that I think the problem we have with the CVFF may have to do with the guideline because it might not meet with the way the financial institutions process their lending.
“This is because banks have been lending to ship owners before now, so what are they doing that is missing in the form. I believe the guideline is a bit faulty.”
The former DG called for a bank to manage the fund completely or establish a new institution that can buy vessels and charter them to ship owners.
The President, SOAN, Mkgeorge Onyung, said the lack of enough ships was hampering the sector’s ability to meet its demand.
He added that if the fund was properly managed, the indigenous shipping sector would thrive in the country.
He said, “If we have not been investing in ship acquisition, we are just going to be onlookers. Like the CVFF fund which everybody is talking about? Ship owners contributed money and the money is not being disbursed, by now we are supposed to have enough ships to be able to cater for our trade.”
The immediate past President, SOAN, Greg Ogbeifun, added that it was important to probe the CVFF account since ship owners were paying their two per cent.
This article was originally published on Nigeria News