President Mohammadu Buhari has approved the disbursement of Cabotage Vessel Financing Fund (CVFF).
Minister of Transportation, Mr Mu’azu Sambo, disclosed this during the flag-off ceremony of Batch B of the Third Phase of Nigerian Seafarers Development Programme (NSDP) TERRA 11, in Lagos on Saturday.
The Federal Government had in 2003 set up the Cabotage Vessel Financing Fund (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 a two per cent 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.
“We will disburse these funds in days to come to the beneficiaries deserving of it, as we have made a case that the funds belong to shipowners.
“Mr president is a man who respects the law and he is on the same page with us that we should proceed with immediate effect.
“We will be liasing with the Minister of Finance, Budget and National Planning, and the Governor of the Central Bank of Nigeria to work immediately with the disbursement,” he said.
Sambo noted that the agency had pledged to the president that it would allow the funds to go into the Treasury Single Account.
He, however, said whenever the money hit the threshold of 50 million dollars, the CBN upon recommendation from NIMASA and the federal ministry of transportation, would inspect the transfer of the funds to the primary lending institutions.
“In this regards five primary lending institutions have been approved by Mr President to do the disbursement.
“This milestone development together with this ceremony go hand in hand because there is a nexus between seafaring, ship, capacity building and making sure ships are available.
“With this approval I am sure our indigenous capacity will grow higher and not even the sky will be the limit,” he said.
Sambo noted that his predecessor had administrative challenges with the federal ministry of finance and that was why he could not disburse the funds.
He said the agency had identify those gaps and that they had been addressed.
“The five banks selected for the disbursement are Union Bank of Nigeria, Polaris Bank, Zenith Bank, United Bank for Africa and Jaiz Bank.
“The banks were selected based on criteria set out in the guidelines, the enabling law and guidelines for the disbursement of the funds as approved by National Assembly,” he said.
The transportation ministry said to avoid the pitfalls of the past, the guidelines were very clear; the applicants for the funds would make equity contribution of 50 per cent, NIMASA 35 per cent and banks 15 per cent.
He pointed out that the agency would put in place an administrative structure so that loan applications were professionally scrutinised.
“The approval for the disbursement got to my office late Friday and on Monday the NIMASA DG will take immediate steps to see to the disbursement,” he said.
Dr Bashir Jamoh, Director General, NIMASA, noted that the money at hand was in two folds; N16 billion or $350 million.
Jamoh said the agency would develop an action plan with timeline that would be made available to everybody for them to know when the first cheque would be signed to the beneficiaries