Lagos – Local operators in the shipping industry have decried the inability to assess the Cabotage Vessel Financing Fund, which they say must have risen to over $2bn.
The CVFF is derived from two percent of the contracts awarded under the Cabotage regime. It was designed to enable indigenous shipping companies to acquire adequate tonnage to be able to participate in coastal and inland trade currently dominated by foreigners.
For nine years since its establishment, operators have made frantic but unsuccessful efforts to access the fund.
According to the President, Ship Owners Association of Nigeria, Mr. Greg Ogbeifun, no shipowner has accessed the fund, which is derived from two percent of their contributions.
He added that the amount accrued under the fund was not known as it had not been made public.
Ogbeifun, who spoke during a presentation at the Association of Marine Engineers and Surveyors’ second Maritime Technical Summit in Lagos, suggested that if the fund could not be disbursed to operators, then they might need to stop making the two percent contribution to it.
He said that in contrast to the CVFF, another fund, the Nigerian Content Development Fund established by the Nigerian Content Board and housed by the Bank of Industry had been disbursed to at least six shipowners since its establishment in 2010.
According to him, the NCDF derived from one percent contributions of shipowners is transparent, adding that the amount accrued from it is about $700m.
He said that the first and only time there was an attempt to disburse the CVFF fund was when six companies were screened out of numerous applications and certified as being qualified.
After that process, when it was almost time to pay, the minister of transport was changed and a new minister had to get the approval of the President for the disbursement of the funds.
The approval was not given, he said, adding that when the Treasury Single Account implementation started, the fund was moved from the custodian banks into the TSA account where it had remained till date.
Stakeholders have said that lack of finance was the reason why local operators could not participate fully in the shipping business as well as compete in the global shipping space.
According to the Chairman, Ship Owners Forum, Mrs. Margaret Orakwusi, the sector could generate a lot of employment if local players had the financial resources to acquire ships.
The Executive Secretary of the Nigerian Shippers’ Council, Mr. Hassan Bello, also lamented that despite the volume of cargo in Nigeria, there was no ship belonging to Nigeria, adding that ownership and operation of ships by Nigerians could achieve a lot.
Ogbeifun said the shipping operation in Nigeria was driven by oil exploration and sales but the government had no strategy in local participation.
He lamented that despite the huge oil resources, the exploration and sales that had been going on for decades, no Nigerian ship had ever lifted a single drop of oil.