PMB Approves Disbursement Of $124m Vessel Finance Fund

Indigenous ship owners can now heave a sigh of relief as President Muhammadu Buhari has approved the disbursement of the Cabotage Vessels Financing Fund (CVFF), 15 years after its establishment.

The CVFF which is believed to have accumulated N44.64bn ($124 million), is derived from the two per cent of the revenues of the ship owners. CVFF has remained undisbursed since its creation in 2003, despite cries and efforts by industry operators to access the fund which is under the custody of the Nigerian Maritime Administration and Safety Agency (NIMASA).

The Federal Ministry of Transport which supervises the agency had cited fears of insincerity on the side of ship owners for not disbursing the fund. But, according to the Act establishing the fund, the minister of Transportation is empowered to establish guidelines for the disbursement of the fund to eligible operators.

After approval from the National Assembly, the fund can then be disbursed. The Act also stipulates that selected applicants will send in their companies’ applications for the financing of the procurement of ships to NIMASA and the agency will then send the applications to the banks warehousing the fund.

The banks are in turn required to carry out a credit risk analysis on the projects of the applicants and if the applicants are creditworthy, the banks will make recommendations to NIMASA that the transactions are worth funding.

NIMASA will then forward the recommendations to the minister to review, approve and send for disbursement.

However, speaking over the weekend at the Stakeholders’ Appreciation Night organised by the Nigerian Shippers’ Council, the minister of Transportation, Rotimi Amaechi, confirmed the long-awaited approval by the president.

He said the ministry would begin meetings with indigenous ship owners in January to commence the disbursement process.

Amaechi said, “I have got approval to disburse the CVFF. I just want to use this opportunity to inform stakeholders that the president has approved the Caboatge Fund and by Tuesday I will meet with the Nigerian Shippers’ Council and NIMASA to look at the dynamics of the fund.

Comments

comments