Uncertainty dogs disbursement of Cabotage Funds

FUNSO OLOJO|

Alleged official highhandedness, secrecy and uncertainty have continued to stall the disbursement of the Cabotage Vessel Financing Funds (CVFF) 13 years after it was introduced to render assistance to an army of cash strapped indigenous ship owners.
In what appears to be an interplay of sour politics and fat layers of official secrecy, successive Ministers of Transport and Director-Generals of Nigerian Maritime Administration and Safety Agency (NIMASA) have dribbled their way past a beleaguered club of Indigenous ship owners for whom the funds were meant.
CVFF was the product of the Coastal and Inland Shipping Act (Cabotage) 2003 created to develop and empower the ill-capitalised indigenous ship-owners to enable them effectively carry out cabotage trade and edge out their better capitalised foreign counterparts.
It was the two per cent contribution from the cabotage contract by the indigenous ship owners warehoused with NIMASA.
Right from the tenure of Shamsudeen Dosumu through Temisan Omatseye and the controversial Patrick Akpobolokemi to the incumbent NIMASA DG, Dakuku Peterside, the actual amount of the funds has remained a subject of conjecture as the actual amount has been mired in controversy.
While previous NIMASA administrations have kept mum on the actual amount accrued from the funds, allowing stakeholders the luxury of making wild guesses, Peterside has come out to put the amount at the tune of $100m which he claimed is now trapped in the Central Bank of Nigeria (CBN).
Funds disbursement as a game of hide-and-seek
Apart from the cloud of uncertainty hovering over the actual size of the fund, the disbursement of the money (which the prospective beneficiaries have waited for over last 10 years) has also been a subject of wild guessing.
The game of deception over the disbursement of the funds actually started under the tenure of Dosunmu as NIMASA DG while Ibrahim Bio was the minister.
Dosumu promised to disburse the funds but it remained an empty pledge until Temisan Omatseye took over as the NIMASA DG who continued the game of deceit until he was unceremonious removed from office.
His successor, Patrick Akpobolokemi, was theatrical in the disbursement of the funds as he elevated the entrenched lack of clarity into an art.
Despite the assurances of the then Minister of Transport, Idris Usman, Akpobolokem kept equivocating over the readiness of NIMASA to disburse cash, while he was always evasive over the actual amount to be disbursed.
However, in 2014 during the tenure of Akpobolokemi,   the then Transport Minister, Senator Idris Umar revealed that a total sum of $150 million had accrued to the Fund.
As a matter of fact, the funds suffered serial depletion as Akpobolokemi allegedly dipped fingers into the fund to purchase land for the then proposed maritime university, Okerenkoko to the tune of N13billion.
This much was confirmed by the incumbent Minister of Transportation, Rotimi Ameachi at one of his official functions last year.
Akpbolokemi was said to have also allegedly funded the National Seafarers Development Programme (NSDP) for which it’s 2,500 beneficiaries have been left stranded without the requisite sea time training experience.

The official pretence got to a head at the twilight of former Jonathan Administration when the All Progressive Congress (APC), then in the opposition, accused the Akpobolokemi-led NIMASA of massive looting of the CVFF.
The drama continued unabated until Akpoblokemi was removed, subjecting indigenous ship owners, most of who were then in the throes of death, to an agonising wait for the intervention fund meant to improve their operations.
The waiting game continues
The situation was less from been cheerful under the incumbent administration of Dakuku Peterside whose political rhetorics have only help to exacerbate the anger of the weary hip owners and compound the uncertainty.
This was after Ameachi had declared that part of the CVFF would be used to fund the proposed National Shipping Line being proposed by the Federal government.
Dakuku has continued with the oft-repeated assurances of the past administrations to disburse the funds which have now become a hollow sound to the hearing of the beneficiaries.
At a recent official outing in Lagos, Dakuku disclosed that the accruals is $100M(N36.5billion) which is trapped in the CBN vault, a claim stakeholder took with pinch of salt.
“We are determined to disburse CVFF according to the law and according to regulation. We are dedicated, we are committed and we are passionate about disbursing it. We would match the CVFF fund with some money coming from the financial institutions. This will crash the rate of borrowing, and that is why we are passionate about disbursing CVFF to bring our own funds to come almost at the cost of nothing and match it with their own fund coming at the rate of 25 per cent. The first thing that would happen is that the rate would crash from 25 per cent to a one digit interest rate. “CVFF is lying at the Central Bank of Nigeria under TSA arrangement, we are working hard to disburse it and it is over a hundred million dollars. We are in talks with the Central Bank of Nigeria”, Dakuku sermonised.
Stakeholders questioned the rationale behind the claims that the CVFF is logged with the CBN, claiming that the funds has been lying in the vaults of commercial banks with accrued interests over the past14 years which they alleged have not been accounted for by successive NIMASA administrations.
An official source claimed that the fund is lying with the four primary lending institutions(PLIS) selected to manage the funds under the new guidelines which include Diamond Bank, Fidelity Bank, Skye Bank and Sterling Bank.
”They(Funds) 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 funds
”How can they say the money is lodged with the CBN when it was a tripartite funding arrangement between indigenous ship owners, the banks and NIMASA. It was purely government funds that could be lodged with the CBN” an agitated ship owner queried.
Another respondent observed that the TSA was a recent development while asking for the account of the huge interests the funds have garnered over the last 10 years for which h said nobody was ready to disclose.
It could be recalled that the tripartite contribution arrangement of CVFF involved 15 per cent by the beneficiary, 50 per cent by the Primary Lending Institutions while the remaining 35 per cent would be cash backed by NIMASA.
Anger on skates
Stakeholders, especially indigenous ship owners, are said to be tired of the endless wait. President of the Shipowners Association of Nigeria (SOAN), Engr. Greg Ogbeifun recently ventilated the frustrations of his members over the endless delay when he disclosed that the association has written on why it can no longer hold on to the Cabotage Vessel Financing Fund (CVFF), saying time has come for the disbursement.
“We will engage the authority. For instance, Starz group contributed $1.25 million, C&I Leasing contributed $1.8 million, Slok contributed over $1 million while Seabulk contributed $1.3 million”.
“We have all contributed to the fund and if we have genuine transaction, we have the right to meet the government to disburse the fund,” he said.
“Members of SOAN who have genuine transaction have applied for CVFF and we are waiting to see how they will react to that. We will also collectively engage them”,he declared.
The frustrations of the ship owners were justified going by the fact that as far back as 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.
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.
Captain Iheanacho, a ship owner, operator of tank farms and former Minister of interior described as strange the unending waiting game over the disbursement.
“NIMASA should address the issue. It is a strange thing that the CVFF that was conceived so many years ago with so much money contributed by people who offer and users of shipping services and we are still at the stage where people are talking about disbursing it.
“What is the purpose of CVFF? Then you have to finance those who are stakeholders and people who contributed this fund. There must be criteria for determining those who qualifies and for those who meet that criteria. Then there is no reason why that money should not be disbursed. The money should not be diverted into other uses or other courses. The money is specific to the promotion of indigenous capacity in shipping and ought to be applied to that end,” he said.
Capt Dada Labinjo, Factional President, Nigerian Indigenous Ship-owners Association (NISA) declared “it will be preposterous if I say NIMASA is serious or not this time around. The guidelines are clear.”
Dipo Alaka, a maritime lawyer 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.
Alaka said ship owners 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.
Shipping sector analysts have insisted that indigenous ship owners have every right to be angry as most of them have lost their businesses to the cold arms of economic recession which has resulted in the liquidation of their operations by the creditor banks that have in turn stripped them of their assets and taken over their businesses.