Home Business Maritime Vessel acquisition: ​N16b, $350m cabotage financing available, as Buhari approves disbursement

Vessel acquisition: ​N16b, $350m cabotage financing available, as Buhari approves disbursement

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President Muhammadu Buhari has approved the immediate disbursement of the Cabotage Vessel Financing Fund (CVFF) to qualified Nigerians as part of the Federal Government’s commitment to grow indigenous capacity of Nigerians to own vessels.

Thereafter, the Director General of the Nigerian Maritime Administration and Safety Agency (NIMASA), Dr Bashir Jamoh announced that the funds available for disbursement was slightly over ₦16 billion and $350 million.

He said: “What we have collected so far is in two folds made up of Naira and Dollar components. So far, the Funds available under the CVFF in Naira component is around ₦‎16 million, while contributions in Dollar component hovers around the $350 million”.

Transportation Minister, Engr. Mu’azu Jaji Sambo said at the weekend that the Presidential approval received by the Ministry on Friday confirmed Union, Zenith, Polaris, UBA and Jaiz Banks as the Primary Lending Institutions for the disbursement of the funds.

He noted that the Ministry of Transportation has commenced liaison with the Minister of Finance and the Central Bank Governor for the implementation.

He added: “It is my belief that finally we are going to break the 17-year-old jinx that has hindered the expansion of the maritime industry.

“We have made a case that the funds belong to you, the ship owners. Mr. President is a man who respects the law and is on the same page with us to proceed with immediate effect. We will be liaising with the Minister of Finance, Budget and National Planning and the Governor of the Central Bank of Nigeria to work immediately for the approval.

“We have pledged to the President that they will continue to allow the funds to go into the Treasury Single Account. However, whenever the money hits the threshold of $50 million, the CBN upon recommendation from the Nigerian  Maritime Administration and Safety Agency and the Federal Ministry of Transportation, would be expected to transfer the funds to the Primary Lending Institutions”.

The CVFF was established alongside the Nigerian Coastal and Inland Shipping (Cabotage) Act of 2003, to empower indigenous ship owners to take control of the nation’s coastal and inland shipping business, otherwise known as Cabotage trade.

Applicants for the Fund will make an equity contribution of 15 percent, while NIMASA will make an equity contribution of 35 percent; and 50 percent will be provided by the banks.

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