The Cabotage Vessel Financing Fund (CVFF), an intervention fund created for the development of indigenous shipping capacity in Nigeria, has grown to $350 million in 19 years of its existence.
Gbemisola Saraki, the minister of state for transportation, who disclosed this at the weekend, gave fresh hope to indigenous shipowners by disbursing the fund to enable them access to affordable loans to acquire vessels.
According to her, it was rather a shame that no indigenous shipowner has been able to access the fund designed to ease vessel acquisition 19 years after.
She said the fund was still intact contrary to speculations that it might have been diverted to other use, resulting in non-disbursement to shortlisted beneficiaries.
The minister said the guidelines for the disbursement of the fund have been formulated and would soon be presented to the National Assembly for approval, which would immediately be followed by the actual disbursement to the already shortlisted beneficiaries.
Recall that in August 2021, Rotimi Amaechi, the immediate past minister of transportation, disclosed in a forum in Lagos that the Ministry of Finance protested against the disbursement of the fund, describing it as a public fund.
This was after obtaining approvals from Mr. President and the Attorney General of the Federation for the fund to be disbursed to ship owners. The development dashed the hope of many indigenous shipowners, who looked forward to having cheap and interest-friendly funds to enable them to acquire ships in order to compete favourably with their foreign counterparts.
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Amaechi had also 2020, set up a committee to develop fresh guidelines for the disbursement of the fund. Part of the new guidelines was that only indigenous shipowners, who have contributed to the fund, can be eligible to access the loan.
Meanwhile, Saraki said it was not about the Finance Ministry, but more about securing approval of the guidelines for the disbursement from the National Assembly, which would be done in no distant time.
“It is really very disheartening that the fund has not been disbursed but we will work with the National Assembly to ensure its disbursement. It has to be disbursed, especially with the coming on stream of the African Continental Free Trade Area (AfCFTA),” she said.
Continuing, the Minister assured: “I know the number of vessels that Nigerians had 10 years ago and I know how many they have now. It is really a shame that this fund has not been disbursed, I learned the value is $350 million now and I am not sure any part of it is missing. I think it is more of the political will to disburse it and I think we have the political will to do so.”
The Cabotage Fund was established alongside the Nigerian Coastal and Inland Shipping (Cabotage) Act of 2003, to empower indigenous ship owners by enabling them to acquire vessels in order to take control of the nation’s coastal and inland shipping businesses, otherwise known as Cabotage trade.
The fund is derived from 2 percent of every contract awarded under the Cabotage regime, which covers shipping activities within the inland and coastal areas of the country.
