Despite the federal government’s appointment of five banks as primary lending institutions in December 2022 for the disbursement of the Cabotage Vessel Financing Fund (CVFF), which amounts to over $350 million (approximately N420 billion), the process remains in limbo.
Union Bank, Zenith Bank, Polaris Bank, United Bank for Africa (UBA), and Jaiz Bank were selected as the primary lending institutions for the fund, two decades after its inception.
Former Transportation Minister Mauzu Sambo, during the flag-off of the Nigerian Seafarers Development Programme, stated that former President Muhammadu Buhari directed immediate disbursement. However, despite this directive, 10 months later, no progress has been made.
Indigenous ship owners have consistently called for the disbursement of the CVFF to expedite the provision of funds to qualified Nigerian ship owners for purchasing new vessels.
The CVFF, established in 2003, serves as an intervention fund to assist Nigerian ship owners engaged in domestic coastal shipping and foster indigenous control of cabotage trade. It is funded by a 2% levy on contract sums for vessels engaged in cabotage trade.
Over the past 10 months, discussions have occurred between the five appointed banks and the Nigerian Maritime Administration and Safety Agency (NIMASA) concerning the interest rates for the loan. NIMASA has insisted on a single-digit interest rate, while the banks have argued that this is not feasible due to the nature of shipping operations in Nigeria.
Dr. Bashir Jamoh, the Director General of NIMASA, has updated the Minister of Marine and Blue Economy on the progress of the CVFF, recognizing that the newly appointed minister requires time to settle in and provide direction for the future.
Prominent shipping figures, including Chief Isaac Jolapamo and McGeorge Onyung, expressed concerns about the fund’s status. Indigenous shippers plan to meet with the minister to address this issue.
Efforts to reach Polaris and Zenith banks for comments were unsuccessful.
