Indigenous shipowners call for due process in $400m cabotage fund disbursement

Indigenous shipowners have called for strict adherence to due process and transparency in the disbursement of about $400 million Cabotage Vessel Financing Fund (CVFF).

Minister of Marine and Blue Economy, Adegboyega Oyetola had last week directed the commencement of the process for the disbursement of the CVFF, after more than two decades of inactivity.

Shipowners at the weekend described the disbursement as a significant step towards strengthening local shipping business and boosting the nation’s economy.

They lauded the Minister over the directive to the Nigerian Maritime Administration and Safety (NIMASA) to begin the process for the disbursement of the fund,adding that disbursement would usher in a new era of strategic repositioning of Nigeria’s indigenous shipping.

Managing Director, Starzs Marine and Engineering Ltd, Greg Ogbeifun, said the directive on disbursement was a welcome development that would further spur the growth of the sector.

Ogbeifun, who was the former President of the Shipowners Association of Nigeria (SOAN), however, advised the government to allow due process according to the requirements of the Act to be followed.

According to him, the minister is acting accordingly by taking the bull by its horns through the disbursement of the fund.

“The minister’s move is extremely commendable. The important thing is that due process according to the requirements of the Act has to be followed. So, that’s the summary. I think it’s a very commendable step. I’ve looked at the marine notice that was sent out and I think it’s majorly in line with the requirements of the Act.

“Even, when you look at the previous guidelines, there is good reason to at least, believe that the minister is acting accordingly. But I don’t know if the requirements of the Act as it relates to the legislating part of government are followed,” Ogbeifun said.

He, however, agreed that the directive would finally unlock the long-standing issue of disbursement of the CVFF.

President of the Shipowners’ Association of Nigeria (SOAN), Sonny Eja, also commended the minister, noting that the decision was a welcome development.

Eja affirmed that aside from being long overdue, partnering with the Bank of Industry (BoI) for the disbursement is another feat.

“I would say this is a welcome development. Though it’s long overdue you know like I’ve always said to people ‘don’t blame yourself for not doing something yesterday or for not doing something last week or last month, the best time to start is now and so it’s a welcome development and I’m equally excited at the fact that they are partnering with BOI in respect of this fund. For me, to hear that they’re going to work with BOI to disburse this fund is quite a good development, too.

“Of course, the single obligor of $25 million is okay, it’s a welcome deployment as well as it would allow wherever the borrowers are going to be to adequately use this fund judiciously,” Eja added.

Eja, the managing director of Petromarine Nigeria Ltd, however, urged the government to put measures in place that would ensure that beneficiaries put the fund to good use.

“Thirdly, I want to believe that they have set the right criteria for accessing these funds and I want to believe also that they have put in place very very good measures to recover these funds so that people don’t just access these funds divert them for other purposes and then they are not able to pay back.

“Whilst we commend the minister and the federal government through Mr President, we equally would urge whoever the beneficiaries of this fund will be to ensure that they’re put into good use so that it won’t give the industry a bad name that either ship owners or other stakeholders just access these funds and then they now become non-performing loans.

“I believe also that the equity contribution that they have put in place is okay so that there’s a commitment on the part of the borrower to know that okay, I equally have a part to play accessing these funds,” Eja emphasized.

On his part, the President of the Nigerian Shipowners Association (NISA), Sola Adewunmi, also applauded the Minister, saying it was the first time a Minister would direct NIMASA to commence the process for disbursement of CVFF.

Adewunmi explained that with the Minister’s directive, the guidelines should be rolled out to beneficiaries to know how to access the fund.

“With the Minister’s pronouncement, let’s hope that things will change. But let us see the guidelines first. Also, I think this is the first time a Minister will come out to say, NIMASA, start this process,” Adewunmi said.