Indigenous shipowners to access $700m CVFF within four months as NIMASA expands PLIs to 12

Barring any last minute change, indigenous shipowners will gain access to the long-awaited Cabotage Vessel Financing Fund (CVFF) within the next three to four months, the Director General, Nigerian Maritime Administration and Safety Agency (NIMASA), Dr. Dayo Mobereola has said.

The NIMASA DG announced this development during an oversight visit by the House Committee on Maritime Safety, Education and Administration in Lagos on Wednesday.

Dr. Mobereola stated that the agency has received approval from the Minister of Marine & Blue Economy to streamline the disbursement guidelines for the fund to expedite the process.

Mobereola disclosed that NIMASA has also expanded the number of Primary Lending Institutions (PLIs) from the initial five to twelve including Polaris, Zenith, Union, Jaiz, and UBA banks, along with seven additional institutions to facilitate access to the fund.

He said the banks will conduct initial risk assessments and contribute 35% of the loan, while NIMASA will provide the remaining 50%.

His words, “What we have done is to streamline the guidelines for the CVFF and the guidelines now that has been approved by the Honorable Minister of Marine and Blue Economy is to ensure that it takes nothing less than three to four months to access the funds. And what is most important about it is that we are also making use of the banks so it will not be totally a NIMASA project.

“The banks are going to carry out the initial risk assessment to be sure that whoever wants to access this fund has the capacity in terms of his own financial capacity and then the bank is going to lend 35% and then NIMASA is going to lend the other 50%.

“So when that risk is being taken on by the bank, you will be rest assured that whoever is coming to us is a bona fide shipping company, bona fide company who has capacity to trade and who has the capacity to also repay back because it’s a revolving fund. So it’s all of those, the strength that we do not have, we have handed it over to the bank to help us to manage that side of it and by so doing you will find out that once we start it before the end of this year by God’s grace it will be revolving and it will be just continuous over the years.”

The NIMASA DG also reiterated the agency’s push for single-digit interest rates on the loans to enable Nigerian vessels compete favourably with international counterparts.

“We have expanded the PLIs.to 12. We advertised and the former ones also applied. So we are now 12 and the fact remains that we are still insisting that we want single digit interest rates because we want our shipping companies our vessels to be able to compete with international shipping companies and we need patient capital meaning that when a loan is given, the loan is given for about 15 years, 20 years that you don’t have to be under pressure to pay back immediately and then the interest rate will throw you out of the market, ” he said.

Mobereola also highlighted NIMASA’s efforts to ensure cargo availability for Nigerian vessels by collaborating with cargo generators such as NNPC, NLNG, and exporters.

Acting Chairman of the House Committee on Maritime Safety, Education and Administration, Hon. Uduak Ududoh, lauded the development and assured NIMASA of the committee’s full support.

He expressed optimism that the CVFF disbursement would create more employment opportunities and reduce capital flight in the maritime industry.

“I don’t think we even have up to 5% of Nigerians owning vessels. But with the recent approval of the disbursement of the Cabotage Fund, which is domiciled in CBN, there will be an improvement.

“I know very soon once the guideline is done, it will create more employment to our people and it will also help the Nigerian players in the maritime industry, to have vessels so that everything will not be capital flights.

“So that is one very significant thing that I know will happen during the DG’s tenure and we are ready to give him maximum cooperation to succeed, ” he assured.

He commended Dr. Mobereola’s leadership and acknowledged the significant achievements in maritime safety and security, noting the absence of piracy in Nigerian waters and the Gulf of Guinea in the last three years.

The Chairman pledged that the committee will collaborate with NIMASA and the Ministry of Marine & Blue Economy to address identified challenges, including obsolete laws, and to support the agency’s budgetary needs.

“The DG is about one year now on the saddle and he has brought a lot of innovations into bare. We are impressed as a committee. And what we also left with him that he succeeds at the end of the day is for him to improve upon the achievement of his predecessor and even surpass it. So as a house committee, he should have that confidence to cooperate with us.

“Wherever they have challenges and feel that the house committee can solve they should always come to us. Wherever they need more funds, even if they want to bring supplementary budget as long as those items in the budget are germane to solve the problems, we will address it, ” he assured.

Photo caption: 

Director General, NIMASA, Dr. Dayo Mobereola ( 3rd from left); Acting Chairman, House Committee on Maritime Safety, Education and Administration,  Hon. Uduak Ududoh ( right) and other committee members during the committee’s oversight visit to the NIMASA Resource Centre in Kiri Kiri, Apapa, Lagos on Wednesday.