Plans by the Federal Government through the Nigerian Maritime Administration and Safety Agency (NIMASA) to disburse the Cabotage Vessel Financing Fund (CVFF) before the end of the current administration on May 29 has been stalled owing to the 8.5 percent interest rate proposed by five commercial banks selected for the disbursement of the fund.
The five banks approved as primary lenders include Jaiz Bank, United Bank of Africa (UBA), Union Bank, Zenith Bank and Polaris Bank
According to the CVFF guidelines, the Primary Lending Institutions (PLIs) will provide an equity contribution of 35 per cent while shipowners will provide 15 per cent, and 50 percent by the government through NIMASA.
Speaking to journalists at the agency’s headquarters in Lagos on Tuesday while receiving a delegation from Ghana Maritime Authority on a study tour of Nigeria’s Cabotage regime, Director General of NIMASA, Dr. Bashir Jamoh said the agency will not accept the imposition of unnecessary guidelines or interest rate by the PLIs on shipowners.
He said the agency is currently seeking alternatives to the PLIs and has commenced engagement with new sets of developmental banks that will provide a much lower interest rate that will not impose burden on shipowners.
He said, “We are still discussing back and forth with the PLIs and unless we are sure we are getting the best deal that can help the stakeholders, we will never accept any PLI imposing unnecessary guidelines or interest rates. These are the core issues that we are dealing with. If we complete the issue of those grey areas then we will disburse the fund before the end of the regime and if we don’t finish when the new regime comes, we will continue and they will advise us on the way forward but we don’t want to put any liability on the stakeholders or government.
“We must get the best bargain for the stakeholders. We can’t accept any interest rate that will remain a burden for the stakeholders. 15 percent of the fund is coming from the shipowners, 50 percent is coming from the government so if PLIs are to provide only 35 per cent they can’t come and impose high interest rate on the stakeholders. This is one of the major grey areas why we are going back and forth.
“We are making contacts from other development banks to see how much they can give. We will now put it on the table. Even though the PLIs from our guidelines are commercial banks but development banks are banks that can provide funding so we are consulting other banks to do peer review.
“For instance, last week, we reached certain milestones and had discussions with some of the stakeholders and the stakeholders think the interest rate is still high so we are going back to the drawing table to make sure that the interest rate we are accepting will favour all the stakeholders.
“So, the interest rate is what is stalling disbursement. The last time it was 8.5 per cent but we still want it to go down, we want single digit and we are asking them to go down again,” he said.
Meanwhile, the NIMASA DG has disclosed that the amended Cabotage act would be assented to before the end of President Muhammadu Buhari administration.
He, however, assured that the amendment would not affect the disbursement of CVFF.
“The amendment of the Cabotage act has nothing to do with the disbursement. They are all different phenomenal. We have been implementing the Act for the past 20 years, so a lot of things came to limelight. In the course of implementing policies you find a lot of bottlenecks where you have to get something done to have an easy process of implementation. So that is the amendment. The core basis of the Cabotage Act still remains where it is,” he said.
Speaking on the visit by the Ghana Maritime Authority (GMA) delegation to understudy Nigeria’s Cabotage regime, the NIMASA DG said the collaboration and partnership with GMA would lead to growth and development in the maritime sector for both countries and strengthen partnership within the Gulf of Guinea.
Speaking earlier, the Director, Legal/ Board Secretary of Ghana Maritime Authority (GMA), Mrs. Patience Diaba who led the team said they are in Nigeria to learn from its experience in the implementation of its Cabotage Act.
Diaba said lessons learned would help Ghana in the effective implementation of its Cabotage regime and avoid challenges that affected Nigeria in the implementation of its Cabotage regime.
“We are here because we are about to implement our own Cabotage regulations. it is better to learn first-hand this challenges Nigeria went through so that we don’t need to go through the same, coming here the first thing to learn is the challenges and how we won’t fall into the dangers.
“If we start like that, we will go faster than Nigeria because Nigeria has to do a lot of learning along the line but we are fortunate that we will hear from them what went wrong and how to get out of it and mechanisms put in place when we do that.
“We are confident that our time will be rewarding and we will return to Ghana better informed and equipped to implement the Cabotage regime in our nation.” she said.
R-L: The Executive Director, Maritime Labour and Cabotage Services, NIMASA, Engr. Victor Ochei; the Director, Legal/ Board Secretary of Ghana Maritime Authority (GMA), Mrs. Patience Diaba; Director General, NIMASA, Dr. Bashir Jamoh; Director, Cabotage Services, NIMASA, Mrs. Rita Uruakpa; and NIMASA’s Deputy Director, Finance, Dr. Odunayo Ani; during a visit by Ghanaian delegation on a study tour at the NIMASA headquarters in Lagos on Tuesday.