The Federal Government has called on Nigerian shipowners to make effective use of the funds in the soon-to-be-disbursed Cabotage Vessel Financing Funds (CVFF) to acquire new vessels and to grow the capacity of Nigerians to participate in the shipping business.
Bashir Jamoh, the director general of the Nigerian Maritime Administration and Safety Agency (NIMASA), gave the advice in Lagos at the weekend during the end-of-the-year gala night of the Shipowners Association of Nigeria (SOAN) and assured them of transparency in the disbursement of the fund.
According to him, the argument about the actual amount in CVFF needs not be because Cabotage Fund like any other public fund is subjected to yearly audit by the Auditor General, Ministry of Transportation, and external auditor according to the constitution.
“Instead of arguing, concentrate on how to use the money if disbursed to grow the Nigerian fleet in order to take back coastal trade from foreigners. Without ships, there is nothing we can do. Take the money available to acquire new ships and to take advantage inherent in the newly completed Lekki Deep seaport, which is awaiting vessel call to go live,” Jamoh said.
He said the guideline states that any beneficiary of the CVFF will contribute 15 percent, the banks that are the primary lending institutions will provide 35 percent equity shares while NIMASA will provide 50 percent.
“The 50 percent is the money given to the bank as collateral but in the event that any beneficiary defaults, the government will not suffer loss. This means the Federal of Transportation cannot take any liability for the loan. Therefore, the ship owners – beneficiaries, and the banks must sit down to agree on the modalities not the Ministry of Transport or NIMASA,” he advised.
He said NIMASA had also obtained approval for the financial incentive that allows shipowners to pay zero duty for the importation of new ships.
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He further said the agency is pushing for a monetary incentive with the Central Bank of Nigeria, which allows shipowners to access foreign exchange for buying ships from the official window rather than going to the very expensive black market.
Mua’azu Sambo, the minister of transportation, commended shipowners for growing the nation’s economy.
The minister, who was represented by Magdalene Ajani, the permanent secretary of the Federal Ministry of Transport (FMoT), promised to support shipowners to achieve the best in shipping.
On the CVFF, the minister said there is hope that the disbursement of the fund will become reality in the next couple of months to help Nigerians put more vessels on the nation’s water.
Earlier, Mkgeorge Onyung, president of SOAN, said that maritime is a lucrative industry such that the global maritime industry is valued at $16 trillion per annum.
He said the recent move by the FMoT to disburse the money in the CVFF will provide shipowners with the opportunity to change the prosperity of the world by creating jobs for Nigerians because one maritime job translates into seven other jobs.
Describing the shipping aspect of crude export lifting as non-oil export, he said shipping has the potential to unlock the prosperity of Nigeria.
Onyung however lauded NIMASA for the safety and security of ships on Nigerian waters, the Shippers’ Council for enabling sanity in Apapa, NNPC for enabling Nigerian ships to participate in the crude oil lifting business and the IOCs for partnering with ship owners.
On his part, Emmanuel Jime, executive secretary of the Nigerian Shippers’ Council, who doubles as the chairman of the Nigerian Fleet Implementation Committee (NFIC) said the committee has identified important incentives that would help to grow the shipping industry.
He said Nigeria cannot be able to achieve its desire to be the maritime hub unless it has sufficient ships in its ownership.
Jime said there is a need to agree on the percentage of cargo that would be transported by Nigerian shipowners, give exemption from import duty, and allow Nigerian shipowners to make payment in naira for all government levies and taxes.
He listed other critical incentives including the need for NIMASA to exempt shipowners from paying 3 percent, allowing dividend proceeds to be remitted out of Nigeria, and the need to review trans-shipment procedures in Nigeria in line with best practices.
Jime said the NFIC is also advocating for a concessionary tariff rate from Nigerian Ports Authority for Nigerian flagged vessels.
“Incentives are very important because shipping is capital intensive and for us to get the Nigerian shipping community to fully participate in the shipping business, we must create some of these incentives. Though some of them are not within the purview of the Federal Ministry of Transportation, we need to work together with other ministries to achieve them,” Jime advised.
