Maritime

Stakeholders urge FG to convert CVFF into seed money for Maritime Bank

Published

7 years ago

September 7, 2017

Olu Emmanuel

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By Richards Adeniyi

Chairperson of the Nigerian Ship-owners’ Forum and former president, Nigerian Trawler Owners Association (NITOA), Mrs. Margaret Orakwusi, has decried the continued withholding of the cabotage vessel finance fund (CVFF) by the federal government.

Having reneged on previous promises in the past to release it to the shipping community, she said the fund should be converted to seed money to set up a maritime bank.

Orakwusi spoke at a cocktail held in Lagos by the Nigerian Ship Finance Conference and Exhibition (NISFCOE).

According to her “CVFF does not belong to the federal government; it is our money. The government is only to monitor it, but they are now squeezing life out of us”.

In her opening remarks, NISFCOE convener, Mrs. Ezinne Azunna, said although Nigeria has the singular advantage of having huge maritime endowments within her territory, she has not attained the status of a maritime nation yet because the country lacks ships and many other basic maritime infrastructure.

Azunna explained that the cocktail was a precursor to the actual NISFCOE conference billed for November 2017. According to her, one of the aims of the conference is to bring together the regulators, banks, ship owners and other private sector practitioners to agree on ways and means of raising money to fund ship acquisition.

In his address, moderator of the conference and former Director General, Nigerian Maritime Administration and Safety Agency (NIMASA), Mr. Temi Omatseye, said that the Minister of Transportation needs to be properly guided on how best to draw the attention of financial institutions to the benefits of supporting indigenous shipping trade in Nigeria.

To smoothen the path to involving indigenous ship owners in the lifting of crude oil, Omatseye advocated the adoption of cost, insurance and freight (CIF) rather than free-on-board (FOB) terms of trade that is currently in use by the federal government.

Such change only requires a presidential order which only the minister would facilitate.

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In his remarks, NIMASA’s director general, Dr. Dakuku Peterside, said that the fund which has garnered over $100 million is in the Central Bank of Nigeria (CBN) because of the Treasury Single Account (TSA) policy.

Peterside who represented the Minister of Transportation, Rotimi Amaechi, said that in line with its cargo support initiative for indigenous practitioners, the agency is already getting the support of the presidency to change the Nigerian terms of trade from FOB to CIF.

However, he lamented that many Nigerian ship owners are not ready to take advantage of the opportunity when it finally arrives.

Peterside identified lack of debt facility from Nigerian banks and high interest rates as major challenge confronting Nigerian ship owners. He vowed that NIMASA is ready to crash the interest rate in order to equip Nigerian ship owners to compete favourably with their foreign counterparts.