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BUSINESS NEWS: FG’s ship financing fund rises by 79%, hits N145bn

BUSINESS NEWS: FG’s ship financing fund rises by 79%, hits N145bn

Publish date: 2022-07-02 23:06:03 | Author: Anozie Egole | Source:

The Cabotage Vessel Financing Fund has risen from $195m to $350m in 2022, representing 79.4 per cent increase.

The Minister of State for Transportation, Gbemisola Saraki, dropped this hint over the weekend during a ministerial briefing with maritime journalists in Lagos after a week-long inspection tour of the Lagos and Tin Can Island port complexes.

Saraki, while fielding questions from maritime correspondents, disclosed that the money in the CVFF account now stood at $350mn –  equivalent to N210bn.

It will be recalled that the Federal Government, in 2003, set up the CVFF to address the lack of capacity among indigenous ship owners in Nigeria.

The CVFF was inserted into the Coastal and Inland Shipping Act of 2003 otherwise referred to as Cabotage Act 2003, in order to provide funds for vessel acquisition amongst indigenous operators.

The source of the fund is two percent contribution by indigenous ship owners from every contract executed in the nation’s waters.

The disbursement of the CVFF is backed by the provisions of Section 42(1)-(2) of the Cabotage Act 2003, which aims to promote the development of indigenous ship acquisition capacity by providing financial assistance to Nigerian operators in domestic coastal shipping.

The former Minister of Transportation, Rotimi Amaechi, had, in 2021, said the fund had grown to $195 million between 2003 and 2021.

Amaechi had, sometime in 2020, set up a committee to develop fresh guidelines for the disbursement of the fund. Part of the new guidelines was that only indigenous ship owners who had contributed to the fund were eligible to access the loan.

Saraki, however, expressed regrets over the non-disbursement of the CVFF, describing it as a national shame.

According to her, it is rather a shame that no indigenous ship owner has been able to access the fund that was designed to enable them acquire vessels nearly 20 years after it was established.

She assured indigenous shipowners that the fund was still intact, contrary to speculations in some quarters that it might have been misappropriated.

“The guidelines for the disbursement of the fund have been formulated and would soon be presented to the National Assembly for approval. It would immediately be followed by the actual disbursement of the funds to the already shortlisted beneficiaries.

“The delay in the disbursement is not the fault of the Federal Ministry of Finance, but rather more of securing approval of the guidelines for the disbursement from the National Assembly. This would be done in no distant time.”

She assured the stakeholders that with the coming on stream of the African Continental Free Trade Area, the fund would surely be disbursed.

“It is really very disheartening that the fund has not been disbursed, but we will work with the National Assembly to ensure its disbursement. Just watch, it has to be disbursed, especially with the coming on stream of the AfCFTA. In the course of this visit, I have also interacted with so many stakeholders, including the indigenous ship owners. 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 learnt the value is $350million now and I am not sure any part of it is missing. We will work with the National Assembly to pass the guidelines. It is not really about the Federal Ministry of Finance, but I think it is more of the political will to disburse it and I think we have the political will to do so” she said.

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