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By Steve Agbota
The Africa Association of Professional Freight Forwarders and Logistics of Nigeria (APFFLON) has called on the Minister of Marine and Blue Economy, Adegboyega Oyetola, to carry out thorough verification of credit ratings of Nigerian shipowners before going ahead to disburse the Cabotage Vessel Financing Fund (CVFF).
In a letter to the Minister signed by the President of APFFLON, Frank Ogunojemite, the group urged the Minister to avoid the experience of the past, where ship acquisition funds were mismanaged and the aim for which the funds were disbursed was defeated.
Daily Sun learnt that Oyetola had recently directed the Nigerian Maritime Administration and Safety Agency (NIMASA) to commence the process of disbursement of the CVFF.
Meanwhile, NIMASA has assured that the fund would now be disbursed in August 2025 after years of delay.
According to the disbursement ratio issued by NIMASA, the agency is to provide 50 percent of the funding, Primary Lending Institutions contribute 35 percent, and shipowners provide the remaining 15 percent as equity.
However, APFFLON commended the Minister for his determination to change the face and fortune of the marine and blue economy sector and for breaking the CVFF jinx to reposition the sector as the number one economic enabler, a catalyst for job creation, and a foreign exchange earner for the country.
“However, much as we applaud you for this giant step, we equally call for caution in disbursing this fund to the beneficiaries. This is to avoid the experience of the past, where funds such as this were mismanaged and the aim for which the funds were disbursed was defeated.
“While we are not against the disbursement of this fund, we, however, call for the verification of the shipowners who are to benefit from this fund to ensure that they are in business and viable enough to be entrusted with such an amount of money, as it’s obvious some of them are out of business and some of them moribund.
“We advise that before the fund is disbursed to the beneficiaries, a committee should be set up to verify the credit ratings of the shipowners and ensure that they are not indebted to any financial institution both locally and abroad, to avoid diverting the fund to loan repayment, thereby defeating the intent for which the fund was given in the first place.
“This we advise, knowing that some of them had taken loans even from financial institutions abroad, and if this money is disbursed to them, they may not make use of the money accordingly,” the letter reads in part.
According to the association, the government should be very critical about the credit ratings of everyone before disbursing this money.
“We say this because if you disburse the money and the expectations are not met, what then is the essence of the money being disbursed? Nothing but to add to the problem.
“You will recall, Minister, that a fund such as this, codenamed Ship Acquisition and Ship Building Fund, was given out to shipowners in the past to build capacity and turn around the sector. The fund was not only mismanaged; the fund, which was in the neighbourhood of $2 million to $2.5 million per shipowner, was diverted by some of the beneficiaries to marrying many wives and taking chieftaincy titles, with nothing to show for it in the long run.
“The reason given above, as well as many others, informed us to write to you at this auspicious moment to ensure that due diligence is done to sift the real shipowners who need this fund to improve their operations, and those masquerading as shipowners waiting for free funds to fund their lavish lifestyle.
“We must take every necessary step this time around to get it right so that Nigeria can build enough capacity in the area of shipbuilding and ownership and, in turn, gainfully engage our teeming maritime students and graduates in profitable ventures, as well as reduce the freight cost for Nigerian-bound cargo.
“We also advise that even when this fund is finally disbursed, it should be closely monitored by the ministry to ensure that the fund is channelled to the aim for which it was disbursed in the first place. Otherwise, the rationale behind its disbursement will not be achieved.
“As patriotic citizens of Nigeria, we are concerned about the experience of the Ship Acquisition and Ship Building Fund; hence, we wouldn’t want a repeat of the ugly experience which has taken Nigeria many years backwards in its journey to self-attainment and sustenance in the area of ship ownership. We call for due diligence, proper verification of the would-be beneficiaries, and continuous follow-up to ensure that the aim is not defeated.
“While we thank you once again for the many reforms that you are bringing to the sector, we assure you of our unwavering support as you steer the ship of the marine and blue economy sector to the promised land. We will cooperate with you in any way possible to build a maritime industry of our dreams. We want you to know that you have a trusted partner and ally in us and that you can always count on us,” the letter reads.
