Although President General Muhammadu Buhari (retd) approved the disbursement of Cabotage Vessels Financing Funds (CVFF) to shipowners on two occasions, the Nigerian Maritime Administration and Safety Agency (NIMASA) has yet to release the money. Anozie Egole examines why NIMASA is struggling to distribute the funds.
When the Federal Government, through Minister of Transportation Mu’azu Sambo, announced in late 2022 that the CVFF would be disbursed to shipowners, many prospective beneficiaries breathed a sigh of relief, believing that the long‑awaited support was finally arriving. The Cabotage Fund was created alongside the Nigerian Coastal and Inland Shipping (Cabotage) Act of 2003 to empower indigenous shipowners and enable them to acquire vessels for the country’s coastal and inland shipping trade. Yet, 19 years later, the government has not released the accumulated N16 billion (US$350 million) for vessel acquisition. The recent presidential approval raised hopes that qualified shipowners would soon obtain cheap, interest‑friendly financing, especially because the government appears to have addressed some of the obstacles that previously hindered disbursement.
In 2021, NIMASA announced that President Buhari had authorized the release of the CVFF to qualified indigenous maritime operators in line with the Treasury Single Account policy and the 2006 CVFF Guidelines. To begin the process, NIMASA invited expressions of interest from banks to act as primary lending institutions (PLIs). A NIMASA publication titled “Implementation and Disbursement of the Cabotage Vessel Financing Fund: Expression of Interest as Primary Lending Institution” explained that the fund would boost indigenous ship acquisition by providing financial assistance to Nigerian operators in domestic coastal shipping. The Federal Government later named five PLIs—Zenith, Polaris Bank, United Bank for Africa, Jaiz Bank, and Union Bank.
Following the announcement, NIMASA held several engagements with maritime stakeholders, including shipowners and commercial banks. In a meeting with the Nigerian Indigenous Shipowners Association, NIMASA Director‑General Dr. Bashir Jamoh urged the various shipowner groups, such as the Shipowners Association of Nigeria (SOAN) and the Nigerian Indigenous Shipowners Association, to unite and speak with a single voice to facilitate a smooth disbursement. SOAN President McGeorge Onyung rejected the notion that any party could impose additional conditions on the CVFF, insisting that the Federal Government must adhere strictly to the Cabotage Act. He argued that convening meetings does not alter the law, likening the situation to a hypothetical requirement that all rice farmers belong to a single association to benefit from a Central Bank of Nigeria intervention.
The CVFF’s financing structure requires applicants to contribute 15 percent equity, NIMASA to provide 35 percent, and the commercial banks to supply the remaining 50 percent. Many operators have expressed concerns that the 15 percent equity requirement is unattainable for indigenous shipowners. Opinions are divided: former NISA President Mallam Aminu Umar considers the 15 percent contribution “fair,” noting that commercial banks often demand equal or higher equity. Conversely, Isaac Jolapamo, Chairman of NISA’s Board of Trustees, argues that the requirement is “near impossible” because many shipowners have been bankrupt or inactive for years, leaving them unable to raise the necessary funds. He points out that the Nigerian Content Development and Monitoring Board does not require equity from operators, suggesting that a more achievable approach should be adopted.
These controversies have fueled fears that the fund’s disbursement may be delayed indefinitely, especially with only a few weeks remaining in President Buhari’s administration. SOAN’s president questioned why the government is imposing new conditions after 19 years, suggesting that if the intention were genuine, the disbursement would have occurred earlier. He warned against moving the goalposts and highlighted inconsistent statements from NIMASA about ownership of the funds.
Taiwo Akinpelumi of the Nigerian Indigenous Shipowners Association echoed the uncertainty, noting that NIMASA has not yet released any disbursement modalities or formed a committee. He explained that while the dollar component of the CVFF has been allocated to the four approved banks, the naira equivalent still requires reconciliation before a clear figure can be announced.
In summary, shipowners and other stakeholders remain divided over the CVFF’s implementation. As they await a decision before the end of May—when the current administration’s term concludes—the maritime industry continues to grapple with foreign dominance in the sector.
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