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Cabotage vessel fund: NIMASA concludes disbursement arrangement with banks

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The Nigerian Maritime Administration and Safety Agency (NIMASA) took a bold step on Wednesday towards the implementation of the Presidential directive on disbursing the Cabotage Vessel Financing Fund (CVFF), as announced by the Minister of Transportation, Engr. Mu’azu Jaji Sambo late last year.

Led by its Director General, Dr Bashir Jamoh, the NIMASA management met with Executive Management teams of the Primary Lending Institutions (PLIs) approved by the Federal Government for the disbursement. These are Jaiz Bank, United Bank of Africa, Union Bank, Zenith Bank and Polaris Bank.

After a closed door meeting, Jamoh said that their engagement was to ensure that the agency and the PLIs are on the same page to ensure that lessons from the past would prove useful in implementing the CVFF disbursement and lead to developing shipping and the blue economy in Nigeria.

He said: “We are engaging the banks on the management and disbursement of the CVFF because they are the ones who have the professional know-how in fund management and this would help us in the reduction of risk in order to avoid the same mistakes of the Ship Acquisition and Ship Building Fund. The banks are expected to come up with issues such as the interest rate, tenor, collateral, and other requirements needed to access the fund. NIMASA is of the position that the interest rate should be of international best practices because the fund being disbursed is Dollar denominated”.

The DG also noted that the CVFF regime is a win-win for all stakeholders involved including the banks adding that the banks should look at the windows of opportunity inherent for the benefit of all parties involved.

On their part, the PLIs applauded the initiative and pledged their support towards ensuring judicious use of the funds to the beneficiaries in order to ensure accountability of the funds are guaranteed.

On behalf of the PLIs, the Managing Director of Jaiz Bank, Dr Sirajo Salisu assured of prompt action towards disbursing the funds, noting that interested shipowners should be ready to abide by the provisions of the Cabotage Act.

“We will try our best to partner with the beneficiaries or the proposed beneficiaries of these funds and I believe they are much aware that this is not a grant, this is money that is meant for a purpose and we will ensure that that purpose is achieved to the benefits of the country”, he said.

The Cabotage Act provides that NIMASA makes 50 percent available, while the PLIs are expected to support the project with 35 percent, with intending shipowners required to make their contribution of 15 percent of the fund for the acquisition of a vessel.

At the meeting were Salisu; Executive Director (North), UBA Nigeria, Mrs Emem Usoro; Managing Director of Union Bank of Nigeria, Mr Mudassir Amray; and Change Risk Officer, Polaris Bank, Mr Temi Ariboloye. Others were Executive Directors, Maritime Labour and Cabotage Services of NIMASA, Engr. Victor Ochei; Executive Director for Operations, NIMASA, Mr. Shehu Ahmed; and a maritime stakeholder, Hon. Chris Asoluka, among other NIMASA top management staff.

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