Nigeria shipowners’ hope of getting the Cabotage Vessel Financing Fund (CVFF) to enable them to reposition the industry for active participation in sub-Saharan shipping transactions have been dashed again as the Minister of Transport, Rotimi Amaechi, decried the Ministry of Finance blockage of the funds estimated at $200 million.
The CVFF is the money set up by the provisions of section 42(1)-(2) of the Coastal and Inland Shipping (Cabotage) Act, 2003 to promote the development of indigenous ship acquisition through financial assistance.
President Mohammadu Buhari had, in March, ordered the disbursement of the CVFF to qualified indigenous shipping operators in line with the Treasury Single Account (TSA) policy and the CVFF Guidelines 2006. It came after about 18 years of contribution to the Fund.
But this directive has met another setback, just like the 2019 approval. Amaechi claimed the Ministry of Finance was frustrating the disbursement.
The indigenous ship owners have frowned at another setback in the disbursement of the fund.
Stakeholders learned that Nigeria has lost 23 of its ocean-going vessels, while it lost over N3 trillion yearly to the dominance of foreign shipowners despite the Cabotage Act.
Commenting on the Fund, a former director-general of NIMASA, Temisan Omatseye, explained that the Cabotage Law clearly states that the CVFF is a separate fund that supports the purchase of vessels for Cabotage operations and is not part of the government’s revenue.
Speaking on the challenges facing the indigenous shipping industry, Omatseye said shipping is capital intensive, noting that a lot of Nigerian banks “do not do long-term financing”.
He said the kind of money required to fund the shipping industry would not be sourced from Nigeria’s banking industry, as it costs $15 to $20 million to purchase a new Anchor Handling Tug Supply (AHTS) vessel.
He said the CVFF might not be sufficient to purchase the number of vessels required.
He said the world ship-building nations rely on the export-import (EXIM) bank, while the shipping industry makes an equity contribution of 16 per cent.
He said there is more business for indigenous shipping in Nigeria, especially in dry and wet cargo movement. “If the international shipowners are here making money in Nigeria, why can we not take advantage of that as Nigerians?” he asked.
President, Shippers Association of Lagos, Jonathan Nicol, said Nigerian ship owners ought to operate with brand new vessels and even build cargo steamliners, as other countries developed their shipping trade.
“We have no Nigerian carriers. We depend on foreign vessels; even if we go into private partnerships on ship acquisition. Nigeria had 23 ocean-going vessels during the explosion of the shipping trade. How did we lose them? Those who control the trade made sure that our cargoes were not available for our carriers to pick even though Nigeria had regional offices scattered abroad.
“This is one of the reasons our Seafarers cannot be engaged. Ghanaians get Seafarers jobs, they are constantly employed by the Foreign Carriers, instead of employing Nigerian ship owners,” he said.
Nicol said Nigeria loses over N3 trillion yearly as a result of the dominance of foreign shipowners, noting that the Cabotage Law was affecting the development of shipping trade.
Nicol said 18 years of regular contributions into this fund was a colossal loss. He added that the contributors should be able to conduct an audit on the status of their money.
Deputy National President, Air Logistics, National Association of Government Approved Freight Forwarders (NAGAFF), Dr. Segun Musa, said the CVFF should be monitored to ensure transparency.
He said the delay in the disbursement of the CVFF was limiting Nigeria’s participation in freight collection saying about 99 per cent of freight is lost to foreign ships.
Meanwhile, the Founding President of the Nigerian Shipowners Association (NISA), Isaac Jolapamo, has threatened to sue the Federal Government over the Fund management.
He said the court would decide on the actual owner of the money according to the Cabotage Law while frowning at Amaechi’s claim.