In line with the plans to implement the Federal Government directive on the disbursement of the Cabotage Vessel Financing Fund (CVFF) to Nigerian shipowners, the Nigerian Maritime Administration and Safety Agency (NIMASA), has given the five commercial banks appointed as the primary lenders, 72 hours to come up with collective modalities for the disbursing the fund.
The timeline was given to the banks on Tuesday by Bashir Jamoh, the director-general of the NIMASA after a meeting with NIMASA executive management and the chief executives of the five approved primary lending institutions.
The five banks approved as primary lenders at the meeting held in NIMASA headquarters in Lagos, include Polaris Bank, Zenith Bank, Union Bank, Jaiz Bank, and UBA.
Speaking with journalists after the meeting, Jamoh said that NIMASA could not start disbursing the money in the Cabotage Fund without engaging with the stakeholders such as banks and shipowners, first.
According to him, there are indications that shipowners would start receiving a firm commitment from the banks and the NIMASA in about 60 days’ time on the action plans and modalities for disbursing the fund.
“We started engaging with the chief executives of the five banks appointed as the primary lending institutions. The five banks approved by the government were all here today and all indications show that the banks are ready but we want them to harmonise their thinking and come up with a collective decision within 72 hours,” Jamoh said.
The idea, he said, was to ensure that the banks have a uniform modality and to avoid a situation where they (banks) have different interest rates.
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He added that it was after the banks had concluded this that NIMASA will invite the shipowners to discuss further.
He said that the processes and procedures were already contained in the already existing guideline for the disbursement of the CVFF which the banks must strictly adhere to.
Jamoh further said that the timeline will also enable the banks to properly go through the guideline before coming up with a collective decision.
“The banks must look at the international best practices in terms of deciding on the lending rate because the money would be disbursed in dollars to the ship owners, therefore, the lending rate would not be the same as that of naira but must conform to international standards,” he stressed.
Jamoh said that NIMASA will come up with an action plan after the conclusion of the stakeholders’ engagement, adding that it is then that a window will open for shipowners to start applying for the loan.
Recall that President Muhammadu Buhari had in December 2022, approved the immediate disbursement of the Cabotage Fund to qualified Nigerians to enable them to buy new ships for the cabotage trade.
The CVFF was established alongside the Nigerian Coastal and Inland Shipping (Cabotage) Act of 2003, to empower indigenous ship owners to take control of the nation’s coastal and inland shipping business, otherwise known as the Cabotage trade.
According to NIMASA, the funds, which are available in naira and dollar components, are about N16 billion and about $350 million respectively.