The House of Representatives has turned around and approved the disbursement of $700 million Cabotage vessel finance fund.
The Cabotage vessel finance fund was established by the Coastal and Inland Shipping (Cabotage) Act, 2003 to promote the development of indigenous ship acquisition capacity by providing financial assistance to Nigerian operators in the domestic coastal shipping.
The House had last month urged the Nigerian Maritime Administration and Safety Agency (NIMASA) to immediately stop the planned disbursement of the gund to individuals and companies.
It also directed the House Committee on Local Content to engage an external auditor to audit all contracts that have entered into in the cabotage regime and report same to the House.
Addressing journalists in Abuja on Thursday, Legor Idagbo the chairman of the committee said investigations indicated that due process was followed for the disbursement.
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Idagbo said: “The Committee requested the Nigerian Maritime Administration and Safety Agency and the Ministry of Transportation to provide detailed information on the total amount accrued to the Fund and disbursements since inception.
“The Committee met with the Minister of Transportation and the Director-General of the Nigerian Maritime Administration and Safety Agency ({NIMASA) on Thursday, 11 May, 2023 to find out about the details concerning the matter. After a thorough analysis of the various submissions on the matter coupled with the explanations given by the Ministry and NIMASA, the Committee discovered that due process was followed in the planned disbursement of the Cabotage Vessel Finance Fund.
“The Committee further notes that there is a lack of Capacity amongst indigenous/ domestic coastal operators in Nigeria, thus the reason NNPC still awards contracts to foreign shipping companies in contravention of the Cabotage and Nigerian Oil and Gas Industry Content Development (NOGICD) Act. Some of these awards have been previously investigated by the Committee which led to their cancellation.
“It was also discovered that the total funds of $360m in the Cabotage Vessel Finance Fund (CVFF) account with the Central Bank of Nigeria (CBN) represents 50%, while the remaining counterpart funds of 50% is from stakeholders and Banks which is 15% and 35% respectively.”
Idagbo also said the committee gave NIMASA the go ahead with the disbursement of the Cabotage Vessel Finance Fund (CVFF) in compliance with the extant laws and laid down guidelines for the said disbursement.
“To ensure the disbursement does not violate any of the extant laws made by the National Assembly, the following persons were Nominated to supervise the disbursement process: Legor Idagbo – Chairman, Henry Nwawuba – Member, Kehinde Bolade Olaiya – Committee Clerk.
“An Audit firm, Stratford Hill and Co. was appointed by the Committee as the coordinating enforcement auditor for the CVFF.
“The Committee applauds NNPC 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,” he added.
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