The Federal Government has finally approved the disbursement of $350million under the Cabotage Vessels Finance Fund (CVFF) to local ship-owners by five banks.
This was disclosed at the flag off ceremony of the third phase of the Nigerian Seafarers Development Programme (NSDP), Terra 11, held at the Naval Dockyard in Lagos, on Friday.
The Minister of Transportation, Mu’azu Sambo, also revealed that the President approved five banks — Zenith, United Bank for Africa (UBA), Union, Polaris, and Jaiz as the Primary Lending Institutions for the disbursement of the Fund.
The CVFF is an intervention fund created to enable indigenous ship-owners to build capacity, maintain existing vessels and also to acquire new ones. The fund has grown to $350 million in 17 years.
Sambo said President Buhari further approved that the fund should be further disbursed to ship owners immediately it hit the $50million threshold in the Treasury Single Account (TSA).
He said: “President Muhammadu Buhari has approved my request for the disbursement of the CVFF Fund. Finally, we are breaking the 17-year old jinx that has hindered the expansion of the industry.
“When we disburse these funds in days to come to the beneficiaries deserving of it, we have made a case that the fund belongs to the Nigerian ship-owners and the President is a man who respects the law, and he is on the same page with us that we should proceed with immediate effect.
“We will be liaising with the Minister of Finance, Budget and National Planning, and the Governor of the Central Bank of Nigeria (CBN) to work immediately with the approval.
“We have pledged to the President that they would continue to allow the funds to go into the TSA. However, whenever the money hit the threshold of $50 million, the Central Bank of Nigeria upon recommendation from the Nigerian Maritime Administration and Safety Agency (NIMASA), and the Federal Ministry of Transportation, would ensure the transfer of the funds to the primary lending institutions,” he stated.
He noted that the guidelines for the funds are very clear, saying that applicants will contribute 15% equityf, NIMASA 35% and the balance of 50% would be provided by the approved banks.
“Other additional requirements or eligibility will include but not be limited to such things as a contribution to the fund. Other things we will be looking at will be the issue of off-taking.
“If you do not want your loan to go bad, the easiest way to guarantee payback is that the applicants show you that they already have off-takers for their vessels,” he said.
Implementation of Cabotage Act
He also said the implementation of the Cabotage Act by NIMASA, has further increased the demand for seafarers in Nigeria, adding that the NSDP initiative aims to train globally competitive officers to check discrimination between the local and foreign trained officers in practice.
Sambo continued: “The implementation of the coastal and inland shipping policy increased the demand for Nigerian seafarers, which at that time was in gross shortage. In addressing the aforementioned shortfall, the Federal Ministry of Transportation and NIMASA midwifed the Nigerian Seafarers’ Development Programme (NSDP) in 2008.
“The programme as an intervention was designed to train Nigerian youths to become seafarers. The choice of foreign Maritime Training Institutions (MTIs) was mainly based on capacity and certification of the Institutions in the area of maritime training (STCW) by IMO.
“The initiative targeted training globally competitive officers that will erase the unfortunate discrimination that exists between local and foreign trained officers in practice. However, efforts are on-going in the area of upgrading local Maritime Training Institutions to enable them to take up the NSDP training in the near future.”
Earlier, the Director-General of NIMASA, Dr Bashir Jamoh, said the programme is designed to train Nigerian youths in Marine Engineering, Nautical Sciences, and Naval Architecture in some of the best Maritime Training Institutions (MTIs) abroad, to position the cadets and make them compete effectively in the global maritime industry.
“It was noted that the number of Nigerian seafarers on ocean going vessels before now had depleted over the years and the urgent need to boost it adequately for effective implementation of the coastal and inland shipping policy of the government, informed the initiative.
“At some point, it was said that Nigeria had less than 10 Seafarers on ocean going vessels, while countries like the Philippines had over 400,000, and currently earn over $6 billion in foreign exchange inflow from their seafarers employed around the world.” (sustainableeconomy)
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