FG to begin payment of $350m cabotage vessel fund

Bisola David
Bisola David
FG to begin payment of $350m cabotage vessel fund

The Nigerian government has said that it would soon start disbursing money from the cabotage vessel financing fund.

According to Nairametrics, the federal government went on to say that the CVFF’s overall exposure is estimated to be 350 million dollars, which represents 50% of NIMASA control.

The Director General of the Nigerian Maritime Administration and Safety Agency, Dr. Bashir Jamoh, said this on Tuesday at the University of Lagos Institute of Maritime Studies’ inaugural Annual Lecture, which was held in Lagos.

Jamoh stated that Nigeria is already a blue economy and what was needed was for the event, “From Crude to Blue – Nigeria’s Blue Economy: The Necessity of Maritime Domain Knowledge and Good Governance.”

Nigeria already has a blue economy, according to Jamoh, and what needs to be done is to ensure its sustainability.

“The Cabotage Vessel Financing Fund, ferry use, ship repairs, and construction are all examples of the blue economy. We are engaged in it, but the current challenge is how to structure it.

“Around 2.5 trillion dollars worth of value are provided by the blue economy. So what percentage of this sum does Nigeria aim to take? This depends on how serious we are,” he stated.

Although Nigeria would soon begin disbursing from the fund, the NIMASA chairman highlighted that Nigeria needed to tap into the 350 million jobs that are abundant in the blue economy.

“According to the regulations, the principal lending institutions would contribute 35%, and shipowners will be required to contribute 15%, for a total contribution of 50%.

“If we accept an additional 350 million from the key lending institutions on top of the 350 million we already have as a 50% payment to NIMASA, that brings the total to 700 million dollars.

“With 750 million dollars, we are prepared to grant shipowners a maximum of 25 million dollars apiece to buy ships that will directly or indirectly provide jobs.”

Additionally, he disclosed that the Nigerian National Petroleum Corporation expressed interest in contributing to the financing of ships that Nigerian shipowners would purchase using the soon-to-be distributed CVFF.

“The NNPC promised to offer them 9% so that the shipowners would only need to source for 6%.

“NNPC stated that it will provide Nigerian shipowners with the specs for the ships they should purchase. Additionally, it will provide them 9% of the 15% in funding that the shipowner was required to contribute.

“They claimed that they would assume control of the ship and supply the cargo till the investment made in the purchase of the ships.”

Remember that the Nigerian government gave Primary Lending Institutions a 72-hour deadline to furnish the details for the disbursement of the $350 million Cabotage Vessels Financing Fund.

Zenith, Polaris, United Bank of Africa, Jaiz, and Union Bank are the main lending institutions engaged, according to NIMASA DG Dr. Bashir Jamoh.

The interest rate, term, collateral, and prerequisites for accessing the fund are among the details that will be made public, according to Jamoh. The interest rate will be in line with global standards because the fund would be in a foreign currency.

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