CVFF: Again, Waiting For Godot


For the fourth time, NIMASA has announced its intention to disburse the Cabotage Vessel Financing Fund where accumulated collections stashed in the vaults of banks since 2003 is now over N30.7 billion.

It has become something of an enigma. Every new management in the Nigerian Maritime Administration and Safety Agency (NIMASA) routinely announces its readiness to begin the disbursement of the Cabotage Vessel Financing Fund (CVFF) which from official figures has hit over N30.7 billion by the end of 2016.

When Dr. Dakuku Peterside, director general of NIMASA, recently declared that his management will soon begin disbursing the money stacked in the vaults of some banks, the fourth such announcement since the Cabotage Act was enacted in 2003, there was no overt excitement within the shipping community. And just like in previous similar pronouncements, he said the guidelines for the disbursement which had been prepared and reviewed with he coming of a new management will also be reviewed.

Pix 1. Rotimi Amaechi, Transportation Minister 

Indeed, to the indigenous shipping community, activating the CVFF which should open the potentials of coastal shipping has been like waiting for godot.

In 2009 when former Minister of Transport, Ibrahim Bio, visited NIMASA on a tour of parastatals under his ministry, he directed the agency to immediately commence the disbursement of the Cabotage Vessel Financing Fund (CVFF).

The minister was apparently not happy with the delay in disbursing the fund which was designed to enhance indigenous participation in the capital-intensive shipping sector. When he came on board later as NIMASA director-general, Temisan Omatseye said that the fund would be given to operators who are qualified to draw from the pool. Such pronouncements eventually turned out to become empty promises or better still mere speculation.

His successor, Patrick Akpobolokemi also stayed through his tenure without disbursing the Fund. By 2014, former Transport Minister, Senator Idris Umar revealed that a total sum of $150 million (N23.2 billion) had accumulated in the Fund.

Umar disclosed this in Abuja during the commemoration of the National Democracy Day and first anniversary of President Goodluck Jonathan’s administration. That was then.

Now, NIMASA director-general, Dakuku Peterside says about N30.7 billion is presently available in the coffers of the Fund. He has promised this would be disbursed very soon. “Now the minister has made regulations but with benefit of hindsight, we are looking at the regulations again. You will recall that there was a Ship Acquisition and Ship Building Fund which is a precursor to the Cabotage fund”, he said.

Going by past experience, what is the guarantee that the present stand of NIMASA may not turn out to become one of those empty promises by the government? This is the position of many indigenous operators and stakeholders whose hopes were raised and later dashed in the past.

According to Capt Dada Labinjo, President, Nigerian Indigenous Ship-owners Association (NISA), “it will be preposterous if I say NIMASA is serious or not this time around. The guidelines are clear.” On the issue of who qualifies to draw from the fund, Labinjo’s take is that what they (government through NIMASA) did five years ago cannot hold today.

The NISA boss regrets that NIMASA guidelines put everything between her, the transportation ministry and the primary lending institutions (PLIs) to the exclusion of the contributors to the fund – ship owners - who must have a say in the disbursement process.

“Ship owners contribute the money while some civil servants determine who gets what. The ship owners must have a say in determining who gets the loan”.

He argues that already, NIMASA is failing in contributing her counterpart funding to the scheme. “Banks are not ready to take 85% of funding while NIMASA determines who gets it (the loan)." He posits that banks are not government; they are in business. They need to have good pricing.

Feelers from the shipping development unit of NIMASA reveal that beyond the director-general's recent pronouncement, there is nothing on ground yet to show that action will be taken on the matter any time soon.

Findings also show that the last attention the issue received has not gone beyond the listing made in 2014 on companies that the PLIs gave a nod as having qualified to draw from the Fund. This stand appears to reinforce feelings that at the moment, the CVFF remains an enigmatic and controversial fund in the eyes of ship owners and other relevant stakeholders in the maritime sector. Determining who gets what is as controversial as qualifications to become a beneficiary.

The fund, a product of the Coastal and Inland Shipping Act of 2003 which provides for the disbursement of loans to indigenous operators in the shipping industry to grow their fleet, is derived from the two per cent surcharge on all cabotage contracts deducted and warehoused in the CVFF.

In 2014, about 100 indigenous operators showed interest in the loans. After rigorous screening, six of these companies were penciled down as having met the conditions set by the PLIs to benefit from the fund.

Pix 2: Senator Idris Umar, former Transport Minister 

They include Starzs Investment Company, Aquashield Oil and Marine Services Limited and UTM Dredging Limited all based in Port Harcourt. Others are Zomay Marine and Logistics Limited and Seabulk Offshore Operating Nigeria Limited based in Lagos. The Calabar-based Nkrah Investment Ltd was also listed as a beneficiary. So far, none of these prospective beneficiary-companies has obtained the loan.



The current leadership of NIMASA appears to have departed from the norm by tagging a figure to what has accumulated in the CVFF till date. Past administrations remained evasive on the actual amount even as accruals were on the increase on a daily basis.

Pix 3: Peterside, NIMASA DG 

At a point, media reports suggested between N50 billion to N61 billion and in each case, the agency would come out with contrary estimates without attaching definite figures.

According to sources, the fund being managed by NIMASA under the supervision of the transportation ministry may have risen to about N46 billion in the vault of four banks that are acting as the partner PLIs.

A NIMASA insider revealed that the fund is intact. “I can tell you authoritatively. They are with the primary lending institutions, which are Diamond Bank, Skye Bank, Fidelity Bank and Sterling Bank. We signed agreement with them to act as primary lending institutions under the Cabotage Vessels Financing Fund. So, they are keeping the money because they have agreed to put their own money into the fund, offering expected loan seekers 35 per cent of their money and some percentage from the fund, while the applicants are expected to contribute 25 per cent cost of the project for which loans are being sought.”

The banks, he said, have been paying three per cent interest on the N46 billion, a figure that has continued to increase by the day.

But stakeholders have been agitating and insisting that the fund should be used for what it was set up, instead of warehousing it in the banks for an interest that is as low as three per cent. Many of them would want government to realize the urgent need to address the gap in maritime infrastructure and manpower in the country by disbursing the fund to applicants penciled down as having qualified for it. They say for capacity development that would make it possible for Nigerians to benefit from the local content and the coastal and inland shipping laws of the country, the CVFF must be put into use.



Despite the latest pronouncement by NIMASA, the possibility of doling out the funds remains bleak because as the operators would say, once beaten twice shy. Uncertainty is now the name of the game as operators would not easily forget what has transpired so far with the administration of the fund which they say is the proceed of their efforts. Big questions remain to be answered. Is government prepared to come out clean on the actual amount that has accrued so far? N30.7 billion which NIMASA announced recently appears to be mired in dispute. Nobody is certain about the money and the current figure.

Pix 4: Some of the beneficiaries of National Seafarers Development Programme

During one of his official outings as Minister of Transportation, Mr. Chibuike Amaechi told stakeholders that Mr. Ziakede Akpobolokemi, a former director general of the agency, dipped his hands into the CVFF to fund the now-suspended Maritime University at Okerenkoko, Delta State.

Pix 5: Engr. Greg Ogbeifun

According to him, the sum of N13 billion was taken out of the funds to procure the land on which the proposed university was to be built. This news further dashed the hopes of operators angling for the loan. Amaechi wondered where in Nigeria that land was so expensive. “Can you imagine that they dipped their hands into CVFF to purchase the land, the amount which was enough to build the university, yet there was no university,” the minister had alerted.



Last year, Dr. Peterside pledged to protect the CVFF against any form of abuse. He referred to the Ship Acquisition and Ship Building Fund (SASBF), a precursor to the CVFF and what befell it owing to bad management and other negative factors. He noted the difference between the CVFF and the SASBF. “The SASBF was backed by policy; the CVFF is backed by law, which makes it more difficult for the CVFF to be open to abuse."

With the CVFF, the Agency contributes 30 per cent, the banks who are the primary lending institutions contribute 50 per cent, while the applicant makes an equity contribution of 15 per cent.” He emphasized that the current management is bent on ensuring that the agency commits itself to the principles and letters of its enabling instruments. “NIMASA under my leadership will rededicate itself to its core functions of promoting indigenous participation in international and coastal shipping as well as regulating the maritime sector for Nigeria’s economic development,”

Peterside was quoted as saying. The agency would safeguard the CVFF from suffering the same fate as the SASBF.  Following the alarm raised by the Transportation Minister on the alleged misappropriation of the CVFF by Akpobolokemi, some key stakeholders in the shipping industry are now calling for the establishment of a maritime bank as a complement to the CVFF. In his view, counsel to a shipping firm, Mr. Dipo Alaka, said the call for the establishment of a maritime bank has become necessary as the CVFF accruals have grown to millions of dollars without any shipping firm benefiting from it. Most contributors, he said, do not know the actual amount in NIMASA’s care.

Pix 6: Timi Ometseye, frm NIMASA DG

He added that it was time the minister and the agency declared the amount since it is only a collector of the fund. Alaka said his clients were sad that they did not benefit from the fund. A maritime bank, he said, would be more appropriate to handle the CVFF with NIMASA stripped of custodianship of the fund.



Apart from using part of the CVFF to acquire land for the Maritime University at Okerenkoko, NIMASA under Patrick Akpobolokemi was said to have dipped hands into it to send cadets overseas for the National Seafarers Development Programme (NSDP) even as he left the Maritime Academy of Nigeria, Oron to rot. As a safeguard measure, operators in the sub sector would want the Federal Government to involve security agencies in scrutinizing the beneficiaries and the four banks appointed to disburse the Fund. They called on NIMASA not to give funds directly to ship owners, but instead should facilitate a tripartite agreement with banks, shipyards and the shipping companies pre-qualified to benefit for the fund. This is part of measures to ensure the fund is used for the purpose it was meant.

Maritime expert and former president, Nigerian Association of Master Mariners (NAMM), Captain Adewale Ishola, urged NIMASA not to give the CVFF funds directly to the beneficiaries. He called for a tripartite arrangement between NIMASA, the ship building companies, and the benefiting ship owner so as to ensure that the right vessel specifications are met. This, he reasoned, is in anticipation of the eventual phase- out of single hull vessels as required by the International Maritime Organization (IMO). He advised NIMASA to monitor the funds closely and ensure it is used for the acquisition of vessels that meet specifications.

Pix 7: Capt Labinjo

In his own opinion, acting President of the Nigerian Ship-owners Association (NISA), Alhaji Umar Aminu, wants the federal government to adopt a new model for the disbursement of the CVFF. “Government should put the money in the banks that finance maritime businesses because that will be a source of encouragement to such banks. “The huge CVFF fund gathered should be used as an investment. It will be like saying ‘if you finance maritime businesses, we will guarantee that we will put these funds in your care’ ".