THE Director-General of the Nigerian Maritime Administration and Safety Agency (NIMASA), Dr Dakuku Peterside has disclosed that the Cabotage Vessels Finance Fund (CVFF) is held at the Central Bank of Nigeria (CBN) under the Treasury Single Account (TSA) policy of the Federal Government.
This was disclosed recently during a cocktail parley for stakeholders in ships/maritime infrastructure financing organised by the Nigeria Ship Finance Conference and Exhibition (NISFCOE) in Lagos.
The DG in a chat with journalists at the event said the Fund that has grown to over 100 million dollars would be disbursed to ship-owners at the appropriate time.
According to the DG, “CVFF is there with CBN under TSA arrangement and we are working hard to disburse it. I can tell you that we are determined to disburse CVFF according to law and regulations. That is what I can say with amount of seriousness that we are determined to disburse it and we are ready to go about the disbursement.”
Even though the DG identified funding as one of the problems of indigenous shipowners in Nigeria, he said the agency was engaging the CBN on how to make fund available for them. He disclosed that the agency was worried about the high interest rate available to shipowners
“We are worried; that is why we are talking about ship financing because the industry is capital intensive, the gestation period is long, the maturity period and the period to begin to make return is usually fairly long. The current debt financing regime cannot support ship financing in Nigeria.
“Going to borrow money to finance shipping in some countries is one per cent and the maximum in ship building countries is 3 per cent. So, a man who gets the same facility at 25 per cent cannot compete. I agree there is a problem, no dispute about that and we must do something to tell our financial institutions that ship building is a peculiar area unlike every other area, and financing shipping is long term and again because of the capital outlay it’s not something someone can pick off the shelves and finance.
“We need partnership with the financial institutions, but that partnership must be at competitive rate,” the NIMASA DG stated.