Ship Finance: NIMASA Moves to Disburse $100m CVFF Fund

Director General of the Nigerian Maritime Administration and Safety Agency (NIMASA), Dr. Dakuku Peterside has assured Nigerian ship-owners that the agency is making frantic efforts to disburse the Cabotage Vessel Financing Fund (CVFF) in line with set down regulations.

Peterside stated this at a parley for stakeholders in Ship and Maritime Infrastructure Financing organised by the Nigerian Ship Finance Conference and Exhibition (NISFCOE) in Lagos.

Peterside said the fund, which is currently over $100 million is with the Central Bank of Nigeria (CBN) due to the Treasury Single Account (TSA) policy.

He said that in line with its cargo support initiative for indigenous practitioners, the agency is already getting the support of the presidency to change the Nigerian terms of trade from Free-on-Board (FOB) to Cost Insurance and Freight (CIF).

He, however, lamented that many Nigerian ship-owners are not ready to take advantage of the opportunity when it finally arrives.

Peterside identified lack of debt facility from Nigerian banks and high interest rates as major challenge confronting Nigerian ship-owners. He vowed that NIMASA is ready to crash the interest rate in order to allow Nigerian ship-owners compete favourably against their international counterparts.

According to him, “We are determined to disburse CVFF according to the law and according to regulation. We are dedicated, we are committed and we are passionate about disbursing it.

“We would match the CVFF fund with some money coming from the financial institutions, this will crash the rate of borrowing, and that is why we are passionate about disbursing CVFF to bring our own funds to come almost at the cost of nothing and match it with their own fund coming at the rate of 25 per cent, the first thing that would happen is that the rate would crash from 25 per cent to a one digit interest rate. CVFF is lying at the CBN under TSA arrangement, we are working hard to disburse it, and it is over a hundred million dollars.

“We are in talks with the CBN. We want to change the terms of trade from FOB to CIF, but how many persons are prepared for this regime? If we get NNPC to change the terms of trade and we are getting the support of the presidency, if we get it changed, how many of us are ready?”

Peterside said that the NISFCOE is apt because it would enable NIMASA meet critical private sector investors who would translate its vision.

According to him, NIMASA depends on private sector energy to set frame work and it is ready to partner anybody that has concepts that can change its story.

Also speaking, moderator of the conference and former Director General of NIMASA, Temi Omatseye said that the Minister of Transport needs to be properly guided on how to draw attention of financial institutions to benefits of supporting shipping trade in Nigeria.

He said changing the terms of trade from FOB to CIF would only require a presidential order.

On her part, a ship-owner and former President of Trawler Owners Association, Mrs. Margaret Orakwusi said it is wrong for government to keep holding on to the CVFF fund. Rather, she advocates that the fund be used as seed money to set up a maritime bank.

According to her, “CVFF does not belong to the federal government. It is our money, the government is only to monitor it, but they are now squeezing life out of us.”

Convener of the Nigerian Ship Finance Conference and Exhibition, Mrs. Ezinne Azunna said that the parley was held preparatory to the actual NISFCOE conference 2017 billed to hold in November 2017.

She noted that the Nigerian maritime sector, although endowed with huge potential, cannot be called a maritime nation because it lacks ships and many other maritime infrastructure.

She said that one of the aims of the conference is to look at how to raise money to acquire ships by bringing the regulators, banks and the private sector together to design a way out

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