Banks interest rates emerge, threatens August disbursement of $700m CVFF

CHECKS by the Nigerian Tribune has revealed that different banks charges like 3.5 per cent Handing Fee, 1 per cent NIMASA Admin Fee and 1 per cent NIMASA Monitoring Fee is currently threatening to stop many indigenous ship-owners from accessing the $700 million Cabotage Vessel Financing Fund (CVFF).

Disclosing this with the Nigerian Tribune, a senior member of the Nigeria Shipowners Association (NISA) and former President of NIMAREX, Mr Ayorinde Adedoyin, explained that the different charges spelt out in the Offer Letter sent to indigenous ship-owners by the Primary Lending Institutions (PLI’s) has already countered the promise by the Federal Government to disburse the funds on a Single Digit rate.

According to Mr Ayorinde Adedoyin: “We cannot continue to deceive ourselves in this country. As I speak to you, so many indigenous shipowners have received Offer Letters from the PLI’s.

“In the Offer Letter, the banks stated that indigenous ship-owners are to contribute 15 per cent while they will contribute 35 per cent, and the Nigerian Maritime Administration and Safety Agency (NIMASA) will contribute the remaining 50 per cent.

“Many shipowners are already aware of the 15 per cent and many have been running from pillar to post to raise the fund, even though its very difficult for us because some of our members don’t have the financial muscle to raise such funds.

“For some of our members that are aiming to buy a $20 million Dollars vessel, 15 per cent of that is $3 million Dollars. That’s huge. Where does the banks expect us to get such funds from? Is it from the same banks that are already borrowing us, the ship-owners, 35 per cent?

“Now, the main issue is the banks Interest Rates stated in the Offer Letter sent to indigenous shipowners by the PLI’s. The banks want to charge 3.5 per cent for warehousing the fund. It is also stated in the banks Offer Letter that NIMASA will collect 1 per cent Admin Fee and another 1 per cent Monitoring Fee. There is another 1 per  cent to be charged flat by NIMASA, not per annum.

“After all these charges, the Federal Government or the Minister will say the CVFF fund was given out to indigenous ship-owners on a Single Digit rate. For how long are we going to continue to deceive ourselves in this country.”

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“If the CVFF fund is a contribution of indigenous ship-owners, why so many Interest Rates and charges being placed on the fund? If the Offer Letter from the banks only says that NIMASA will charge 1 percent Monitoring Fee, then that is not too bad; but when there are so many charges and interest rates on a fund that is duly contributed by indigenous ship-owners, then that is not been fair to us the operators.

“With all the charges and Interest Rates slammed on the CVFF fund, its already more than the Single Digit that was promised the ship-owners at inception. So, the possibility of the fund being disbursed this month is no longer feasible.”