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•Ex-NIMASA DG, incumbent disagree over fund’s currency
The controversy surrounding the management and financial status of the $700 million Cabotage Vessel Financing Fund (CVFF) has deepened, with the disbursement of the funds still stalled 23 years after the scheme was established.
Amid growing concerns over the fate of the fund, maritime stakeholders are demanding a comprehensive independent audit of the Nigerian Maritime Administration and Safety Agency’s (NIMASA) accounts from 2004 to date to establish the fund’s actual value, determine how the money has been managed and ensure transparency and accountability in its administration.
The call for a comprehensive audit intensified following a disagreement between former NIMASA Director-General, Temisan Omatseye, and the incumbent, Dr Dayo Mobereola, over the currency in which contributions to the fund were held.
Omatseye had alleged that the much-publicised CVFF was no longer held in United States dollars, claiming that dollar contributions were converted into naira and placed in fixed deposits to attract higher interest rates. He explained that this was the practice during his tenure, adding that the conversion had implications for the fund’s current value.
Countering, Mobereola insisted that the dollar component of the CVFF remains domiciled with the Central Bank of Nigeria (CBN).
However, stakeholders argue that the proposed audit would provide an independent account of the fund’s financial history, establish whether the dollar contributions were converted into naira and determine the actual amount available for disbursement to indigenous shipowners
Conversely, the disagreement also attracted criticisms from the shipowners, who questioned the rationale behind converting the fund into naira when indigenous shipowners continue to make their statutory contributions in dollars and demanded clarification from the Minister of Marine and Blue Economy, Adegboyega Oyetola.
Established under the Coastal and Inland Shipping (Cabotage) Act, the CVFF was designed to provide financial support to indigenous Nigerian shipowners for vessel acquisition and the development of local shipping capacity.
However, despite more than two decades of contributions from maritime operators, the fund is yet to be disbursed to beneficiaries, sparking concerns over its management, currency denomination and the prolonged delay in making the financing facility accessible to indigenous shipowners who are struggling with ageing vessels.
Speaking on the development, the former President of the National Association of Master Mariners (NAMM), Capt. Tajudeen Alao, called for an independent audit of NIMASA’s accounts.
Alao said such a probe would help resolve the lingering controversy over the management and currency denomination of the fund, particularly conflicting claims about whether the dollar-denominated contributions were converted to naira or remained in dollars with the Central Bank of Nigeria (CBN).
Speaking on the controversy, the former NAMM president said a former Director-General of NIMASA had confirmed that the dollar funds were converted to naira and deposited with the CBN during his tenure.
However, he noted that if the current Director-General maintained that the funds were still domiciled in dollars with the apex bank, such a position should be regarded as the agency’s current account of the situation.
According to Alao, only a comprehensive audit covering the period from 2004 to date would establish the true financial position of the fund and provide clarity on its management over the years.
He also expressed concern over the prolonged delay in disbursing the CVFF, lamenting that the failure to make the fund accessible to indigenous shipowners for more than two decades had forced many operators out of the shipping business.
He described the situation as detrimental to Nigeria’s maritime industry and efforts to develop indigenous shipping capacity.
Alao further argued that cargo guarantees and the ship-management capacity of prospective beneficiaries should be considered among the eligibility requirements for accessing the fund.
He explained that prospective beneficiaries must demonstrate the ability to manage vessels and secure cargo to ensure that loans obtained from the fund are effectively utilised and repaid. He stressed that the CVFF was established to support indigenous shipowners and strengthen local participation in shipping, adding that its prolonged non-disbursement had undermined the objectives for which it was created.
On his part, NISA President, Sola Adewumi, said the ministry and NIMASA should address Omatseye’s claims, arguing that the guidelines governing the administration of the CVFF did not provide for converting contributions from dollars to naira.
Adewumi questioned the rationale behind converting the fund when shipowners continued to make payments to the relevant authorities in US dollars for shipping-related transactions and other obligations.
According to him, the ministry and NIMASA should explain why the fund would be converted to naira when shipowners were still required to make their payments in dollars.
“If you have heard from the former DG that the money has been converted to naira, it is left for the DG and the ministry to counter what the man has said because he was once in that position, so he should know better than people like us.
“Money was not meant to be converted to naira ordinarily because we are paying in dollars. Even as we speak, we still pay them in USD. So, why are they converting it to naira? These are the questions we should ask ourselves,” he said.
Adewumi maintained that the existing CVFF guidelines only stipulated the contributions expected from shipowners without making provisions for converting the fund into the local currency.
He argued that if the government intended to maintain the fund in naira, the authorities should explain why contributions and other shipping-related payments were still required in dollars.
“Does the guideline say that the money should be converted? No.
The guideline only says that we should contribute, and for all the transactions we are doing, we are paying for shipping, developing, and it’s usually in USD. So, if they want it in naira, then why should they ask us to pay in USD?” he queried.
Meanwhile, Omatseye, who served as NIMASA director-general between 2009 and 2010, defended the conversion of dollar-denominated internally generated revenue, including the three per cent surcharge and CVFF contributions, into naira during his tenure.
He said the conversion followed a directive from the Accountant-General of the Federation (AGF), which was based on the higher interest rates offered by commercial banks on naira deposits compared with dollar deposits at the time.
According to him, while dollar deposits attracted interest rates of between one and two per cent, naira deposits offered returns of upwards of 15 per cent, making the conversion financially attractive to the agency.
Omatseye explained that when he assumed office in 2009, NIMASA’s funds, including the CVFF and three per cent surcharge, were held in commercial banks, with several banks appointed as collection banks.
He said the collections were subsequently transferred into designated naira and dollar accounts on the 23rd of every month.
“By virtue of a memo from the Accountant-General’s office, the agency was directed to change all foreign internally generated revenue, be it three per cent or CVFF, into naira and fix it in naira,” he said.
The former NIMASA boss maintained that all dollar funds received as CVFF during his tenure were converted into naira, insisting that his comments reflected the financial management practice under his administration.
He, however, said NIMASA was in a better position to explain how the fund had been managed following the introduction of the Treasury Single Account (TSA).
“What has been the practice since the advent of TSA is better explained by NIMASA. In light of that, I stand fully by my statement that during my tenure, all dollar funds received as CVFF were converted into naira,” he said.
Omatseye further disclosed that as of December 13, 2010, when he left office, NIMASA had N52 billion in fixed deposits, comprising the CVFF and the Maritime Fund.
However, Mobereola, through a statement personally signed by him, dismissed reports suggesting that the dollar-denominated component of the CVFF had been converted into naira, describing the claim as incorrect.
The agency explained that the revenue streams accruing to the fund were denominated in different currencies, adding that contributions received in dollars were retained in dollars with the CBN, while naira contributions were held in naira.
“For the avoidance of doubt, this claim is incorrect and does not reflect the actual status of the CVFF,” the agency said.
It maintained that there had been no conversion of the dollar-denominated component of the fund into naira, contrary to the reports attributed to the former director-general.
Mobereola also disclosed that the Minister of Marine and Blue Economy, Adegboyega Oyetola, was working towards ensuring the commencement of the long-awaited disbursement of the fund to qualified beneficiaries.
According to NIMASA, applications have been received from eligible beneficiaries, with some undergoing the required documentation processes with their preferred Primary Lending Institutions (PLIs).
The agency expressed optimism that the disbursement process would commence shortly, adding that the minister remained committed to strengthening indigenous shipping capacity and empowering local operators.
