Conditions set by Primary Lending Institutions (banks) have threatened the commencement of disbursement of the Cabotage Vessels Finance Fund (CVFF), an investigation has shown.
Recall that the Minister of Transportation, Mu’azu Sambo, had announced that Union, Zenith, Polaris, UBA, and Jaiz Banks were confirmed as the designated banks for the disbursement of the funds by the Presidential approval which the ministry received.
It was gathered that the introduction of a 15 percent equity contribution from the indigenous shipowners may delay the process, as the local shipowners have said that they lack the wherewithal to provide the funds to the banks for disbursement of the CVFF.
Speaking, a member of the Nigerian Shipowners Association (NISA), Rowaye Jibril, at the general meeting of the association, lamented that the 15 percent equity contribution demanded by the primary lending institutions to indigenous shipowners could pose a stumbling block to accessing the fund. According to him, the majority of Nigerian shipowners are already in huge debts and have their assets confiscated by banks and the Assets Management Company of Nigeria (AMCON).
Jubril also lamented that the Nigerian National Petroleum Company Ltd,(NNPCL), is currently posing a great threat to local shipowners, as they hold on to jobs based on the ‘right of first refusal’, alleging that even when they don’t have ships they charter vessels to execute the jobs.
According to him, “Most of the shipowners cannot meet up with the 15 percent; the DG of NIMASA had to be sensitised about the fact that most Nigerian shipowners don’t have jobs, and that is what led to the death of many shipping companies. Many offices in Apapa are moribund today because the shipping companies are dead. If we continue this way, I don’t see how we are going to meet up with the criteria, and even when it is disbursed the money will go down the drain again”.
“Until someone stops them; but nobody is ready. These are stumbling blocks to the growth of the industry”, he maintained.
Also speaking, the chairman Board of Trustees, NISA, Chief Isaac Jolapomo, noted that even though the conditions cannot be easily changed except through the National Assembly, he stressed that many ship owners do not have the capacity to provide 15 percent equity. Jolapamo lamented the ridiculous requirements and collaterals requested by banks on loans to Shipowners, saying the committee set up by the association was working on the 15 percent equity to be provided by shipowners.
He, however, explained that indigenous Shipowners could explore an arrangement utilised by oil and gas operators who receive 100 percent equity from the Nigerian Content Development and Monitoring Board (NCDMB), and Primary Lending Institutions.
Meanwhile, Northern Shipowners in Kano have appealed to the Minister of Transportation to consider the Northern Shippers in the disbursement of the Cabotage Fund.
