By ebosele@hotmail.com
Former Director-General, Nigerian Maritime Administration and Safety Agency (NIMASA), Temisan Omatseye, has disclosed that the $350 million Cabotage Vessel Financing Fund (CVFF) was converted into naira to take advantage of higher interest rates in the domestic financial market, exposing its dollar value to exchange rate depreciation.
Omatseye made the disclosure on Thursday at the 2026 Annual Summit of the Shipping Correspondents Association of Nigeria (SCAN), held in Apapa, Lagos.
The summit was themed, “Low-Risk Capital for Indigenous Shipowners: Overcoming Regulatory and Financial Bottlenecks.”
According to him, the decision to convert the fund from dollars into naira was informed by the significant difference between interest rates in Nigeria and returns on dollar-denominated investments in the international market at the time.
He explained that while interest rates in Nigeria ranged between 23 and 25 per cent, dollar investments offered returns of approximately one to two per cent, making naira investments more attractive.
“Interest rate at that time was quite high, 23 per cent, 24 per cent, 25 per cent. And interest rate in dollars was about one or two per cent. Dollar interest rate is very, very low internationally,” he said.
Omatseye explained that the arrangement involved converting dollar receipts from the CVFF into naira as they were received and placing the proceeds in local currency accounts to earn higher interest.
He, however, noted that the subsequent depreciation of the naira, particularly in 2023, significantly affected the fund’s value when calculated in dollars.
He cautioned against assuming that the original $350 million valuation of the fund in 2019 remained unchanged, stressing that the money was held in naira rather than dollars.
“So you cannot be looking at $350 million as of 2019 to be the same $350 million today, because the money is held in naira,” he stated.
The former NIMASA chief urged stakeholders to distinguish between the fund’s historical dollar valuation and its current worth, explaining that its present dollar equivalent could only be established by converting the available naira balance at the prevailing exchange rate.
“When you guys speak of $350 million, CVFF is not held in dollars. It’s in naira, and at the present exchange rates, keep your realistic eye,” he said.
He added that any claims regarding an increase in the fund’s value should be supported by verifiable financial records.
Meanwhile, the Minister of Marine and Blue Economy, Adegboyega Oyetola, has reaffirmed the Federal Government’s commitment to accelerating the disbursement of the CVFF to qualified indigenous shipowners.
Oyetola, represented by the Ministry’s Director of Press, Anastasia Ogbonna, disclosed that he had directed NIMASA to commence the disbursement process to eligible beneficiaries.
He said the administration of President Bola Tinubu was committed to developing a competitive maritime sector that would enable Nigerian entrepreneurs to participate meaningfully in domestic and international shipping.
According to him, access to long-term financing at commercially sustainable rates remains a major challenge for indigenous shipowners, given the substantial capital required for vessel acquisition, high borrowing costs, collateral requirements and lengthy repayment periods.
The minister said the government had taken concrete steps to operationalise the CVFF, established under the Coastal and Inland Shipping (Cabotage) Act of 2003 to promote indigenous vessel ownership.
He disclosed that a dedicated application portal was launched in January 2026 to improve transparency, accessibility and efficiency in the application process, while the number of approved Primary Lending Institutions (PLIs) was increased from five to 12.
Oyetola added that NIMASA had been directed to work closely with the approved lending institutions to accelerate the assessment of applications and disbursement to qualified beneficiaries.
He, however, emphasised that the fund must be managed with transparency, rigorous due diligence and prudent risk management, describing it as a revolving facility whose sustainability depends on responsible borrowing, repayment and accountability.
“Our commitment to the effective implementation of the Cabotage Act remains equally firm. We recognise that protecting the legitimate participation of Nigerians in domestic shipping must go hand in hand with building their financial, technical and operational capacity,” he said.
The minister urged financial institutions to develop financing products that reflect the commercial realities of the maritime industry, while calling on shipowners to embrace sound corporate governance, proper financial reporting and disciplined repayment practices.
He stressed that reducing investment risks required more than making funds available, noting the importance of a predictable regulatory environment, credible business plans, transparent financing arrangements, effective insurance and reliable revenue streams.
Beyond the CVFF, Oyetola said the Federal Government was pursuing broader initiatives to strengthen indigenous participation in shipping, improve maritime safety, develop Nigerian seafarers and expand services supporting vessel ownership and operations.
He also disclosed that the government was exploring a commercially driven national shipping line initiative based on private capital, professional management, strategic partnerships and international expertise.
According to him, the proposed initiative would complement indigenous operators, expand Nigeria’s shipping capacity and operate on a sustainable commercial basis.
Oyetola said the government’s broader objective was to encourage greater Nigerian ownership of vessels capable of serving domestic trade and competing in international shipping, while creating more opportunities for Nigerian seafarers to acquire sea-time experience and secure employment.
He called for stronger collaboration among government, shipowners, financiers, regulators and industry professionals to remove regulatory and financial bottlenecks, strengthen indigenous shipping and ensure that Nigerians secure a greater share of opportunities in the maritime economy.
