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Cabotage Vessel Fund Swells by $100m

By on April 15, 2011

The Cabotage Vessel Finance Fund (CVFF) initiated by the Nigerian Maritime Administration  and Safety Agency (NIMASA)  to  empower indigenous ship owners for active involvement in coastal trade and shipping is now $100 million richer.

NIMASA Executive Director, Finance and Administration, Mr. Adeniran Aderogba, who dropped the hint about the $100 million secured for CVFF in an exclusive chat with THISDAY in Lagos, said this was in addition to the $100 million earlier secured from Afrexim Bank of Egypt.

Aderogba    said the management of the agency is at the verge of completing negotiations with some local commercial banks for more funds.

“This fund will be complementary to our already existing Cabotage fund and will assist in furthering local capacity development in line with our core mandate as enshrined in the NIMASA Act 2007. Indigenous ship owners who meet the requirements for the funds will surely get it. There is no doubt about that”, he said.

Enumerating some of the requirements for the funds, Aderogba said firms soliciting for the fund must have solid management structure in line with international standard and practice.

Others are corporate governance, a contract with the international oil companies (IOCs) or Nigerian National Petroleum Corporation (NNPC) to move products or supply to oil rigs or platforms, good financial records and a track record of performance.

According to him, beneficiaries are entitled to a minimum of $10 million because, by the agency findings, any genuine indigenous operator should be able utilise it judiciously to get off the ground.

He revealed that a one-year moratorium would be given to beneficiaries of the funds so that they can have breathing space to operate and pay back the money.

He added that beneficiaries would be given five years to pay back the money so that others interested in it can also access it.

He stated that the management of the agency is passionate about capacity building so that Nigerians can be in a position to redress the domination of foreigners in the coastal trade and inland shipping in the country.

“This is the only way we can empower our people and arrest the capital flight arising from the domination of foreigners in the shipping sector of the economy over the years. I am of the firm belief that if our people play by the rules of the game, take the funds and use it exactly for what it is meant for, in the next 10 years, we will be several steps away from where we are now in the shipping sector”, Aderogba said.

The Coastal and Inland Shipping Act, 2003, otherwise called the Cabotage Act, is fashioned after the Jones Act in the United States of America. The Act is hinged on the provision that vessels used in coastal trade and inland shipping in the country must not only be built in Nigeria but also owned and crewed by Nigerians.

It was in a bid to satisfy these provisions that CVFF was created to ensure that Nigerian ship owners are placed in a vantage position to compete favourably with their foreign counterparts.

Presently, foreign ship owners dominate coastal trade and inland shipping even though it is statutorily meant for Nigerians, according to the provisions of the Cabotage Act. In some cases, the foreign ship owners, in a bid to circumvent the provisions of the Act, allegedly use some unscrupulous Nigerians as fronts.

Source : Thisday