Warehousing of $350m CVFF in TSA illegal — SOAN

The Ship Owners Association of Nigeria (SOAN) has said that warehousing the $350million Cabotage Vessel Financing Fund (CVFF) in the Treasury Single Account (TSA) of government is illegal and unconstitutional.

Speaking with the Nigerian Tribune in Lagos, President of SOAN, Dr. Mkgeore Onyung explained that the law says that the funds should be warehoused in commercial banks and not TSA account of government.

According to the SOAN President, “We keep hearing of oil theft but you will never see any indigenous vessel getting involved in such activities. All our ships are registered. The regulators know the owners of our ships. Their addresses and details of owners are well known, so none of our members will ever get involved in oil theft business.

“The fact that Nigeria is still crying over issues of oil theft is worrisome. If government disburses the Cabotage Vessel Financing Fund (CVFF) which is around $350m now, indigenous operators will have capacity and there won’t be any need for any foreign vessel to encroach our cabotage area again, not to talk of stealing our petroleum products.

“If the indigenous ship owners have capacity, there will be legitimate indigenous operators who will be available to lift crude; and if any crude is missing, the regulators will know who to hold responsible for such.

“But when we lack local capacity and the foreign vessel keep plundering our cabotage regime, the issue of oil theft will continue to persist. Just imagine that foreign vessel that was caught in Equatorial Guinea with stolen crude oil from Nigeria. Such scenarios will keep repeating itself if we fail to boost local capacity in the area of shipping.”

On the warehousing of the cabotage fund in the TSA, the SOAN President explained that, “Keeping the cabotage funds in TSA is illegal. The law is clear on where the CVFF should be warehoused. The law says that the Nigerian Maritime Administration and Safety Agency (NIMASA) should be the ones to collect the funds, and NIMASA has been doing that. However, the law says that the funds should be warehoused in commercial banks, not TSA.

“If you read the Cabotage Act 2003, it says the funds should be kept in commercial banks. The Act is in public space. It is yet to be amended. Anybody can read it online. The law says CVFF should be collected by NIMASA and deposited in commercial banks. The Minister of Finance has no role to play as regards the CVFF fund. The law is silent on the Minister of Finance. The law didn’t mention the Minister of Finance when it stated the rules for collection or disbursement of the CVFF fund.

“But what do we have today? We have a CVFF that is warehoused in the TSA. It is illegal to warehouse the funds in the TSA. The law does not say the funds should be warehoused in the TSA.”