Executive Director, Maritime Labour and Cabotage Services, Nigerian Maritime Administration and Safety Agency (NIMASA), Engr. Victor Ochei;Executive Director, UBA Nigeria North, Mrs. Emem Usoro; Managing Director, Union Bank of Nigeria, Mr. Mudassir Amray; Director General NIMASA, Dr. Bashir Jamoh OFR; Executive Director Operations NIMASA, Mr. Shehu Ahmed; Managing Director/CEO, Jaiz Bank, Dr Sirajo Salisu and Change Risk Officer, Polaris Bank, Mr Temi Ariboloye during a meeting to discuss modalities for the disbursement of the Cabotage Vessels Financing Fund, CVFF at the NIMASA headquarters in Lagos
Dr. Bashir Jamoh, Director General of Nigerian Maritime Administration and Safety Agency (NIMASA) has listed the agency’s expectations from banks serving as primary lending institutions for disbursement of the over N278b Cabotage Vessel Finance Fund (CVFF).
Jamoh said NIMASA is focused on avoiding mistakes of the past where funds disbursed under the Ship Acquisition and Ship Building Fund (SASBF) were not promptly repaid
“We are engaging the banks on the management and disbursement of the CVFF because they are the ones who have the professional know-how in fund management, and this would help us in the reduction of risk in order to avoid the same mistakes of the Ship Acquisition and Ship Building Fund”. The banks are expected to come up with issues such as the interest rate, tenor, collateral, and other requirements needed to access the fund. NIMASA is of the position that the interest rate should be of international best practices because the fund being disbursed is Dollar denominated.
Dr Jamoh told the PLI’s that in recovering the loans, they should monitor the cabotage contracts secured by the beneficiaries as well as, monitor the shipyard which would construct the vessel. He said the banks can use these as partial guarantee to recover the loans.
Dr Jamoh explained that NIMASA would contribute 50percent of the total sum of any vessel that shipowners intend to buy, the PLI’s would bring 35percent while the shipowners bring 15percent.
“As bankers, are we ready to come up with the 35percent? Do we have competent hands that understand ship financing?
“On the issue of partial guarantee, the essence of this fund is to accelerate the growth and development of shipping, if we start asking for partial guarantee, before you know it, time would move fast and we wouldn’t go anywhere
“So, we expect that the vessel itself would be tied to a particular shipyard monitored by the banks. The contract between the shipowners and the multinational company to lift cargoes should involve the banks, these are areas to handle it without necessarily asking for collateral or asking the shipowner for C-of-O of his house and things he cannot provide” he said
Jamoh said that shipowners who intend to benefit from the CVFF Fund would have to apply through the banks and not through NIMASA.
The DG also noted that the CVFF regime is a win-win for all stakeholders involved including the banks adding that the banks should look at the windows of opportunity inherent for the benefit of all parties involved.
IIn their part, the PLIs applauded the initiative and pledged their support towards ensuring judicious use of the funds to the beneficiaries in order to ensure accountability of the funds are guaranteed.
Managing Director of Jaiz bank, Dr. Sirajo Salisu, who spoke on behalf of the five approved banks, assured of prompt action towards disbursing the funds, noting that interested shipowners should be ready to abide by the provisions of the Cabotage Act.
“We will try our best to partner with the beneficiaries or the proposed beneficiaries of these funds and I believe they are much aware that this is not a grant, this is money that is meant for a purpose, and we will ensure that that purpose is achieved to the benefits of the country.”
Jamoh noted that their engagement was to ensure that the Agency and the PLIs are on the same page to ensure that lessons from the past will prove useful in implementing the CVFF disbursement and lead to developing shipping and the blue economy in Nigeria.
The Cabotage Act provides that NIMASA makes 50 per cent available, the PLIs are expected to support the project with 35 per cent, while intending shipowners would be required to make their contribution of 15 per cent of whatever amount of money is needed for the acquisition of a vessel.