Following the plans to disburse the Cabotage Vessel Financing Fund (CVFF) to shipowners, the Minister of Transportation, Rotimi Amaechi has told banks to hold every beneficiary shipowner accountable for the credit facility.
He said this during a meeting organised by the Federal Ministry of Transportation, in collaboration with the Nigerian Maritime Administration and Safety Agency (NIMASA).
How the funds would be disbursed: According to Amaechi, a committee would be set up for the purpose of disbursement. Guidelines would also be drawn and decisions would be made regarding the interest rate and so on.
He said that essential elements such as the responsibility of monitoring the funds, which were bestowed on the commercial banks were expected to be in the guideline. This would ensure that the lending institutions are in a position to monitor every shipowner that gets a chunk of the CVFF.
“We have agreed to form a committee that will draw up guidelines for the disbursement of the CVFF. The guideline which would be drawn up would be taken to the National Assembly for ratification. The committee comprising of some stakeholders will be headed by the Director-General of NIMASA and they will decide if the interest rate that will be attached to the CVFF will be single-digit or not.
“If we just allow people to take that money without a proper framework to service their loans, then we won’t achieve our aim of developing the maritime economy. People must borrow and return the money borrowed so that others can benefit from the CVFF,” Amaechi said, in a The Nation report.
What you should know: The CVFF was introduced in 2004 from 2% deductions from every contract value awarded under the Cabotage regime. Shipowners are expected to access it in order to afford the purchase of new vessels and at the same time, maintain the existing ones.
The CVFF is under the management of the Nigerian Maritime Administration and Safety Agency (NIMASA) while the fund is being warehoused at the Central Bank of Nigeria (CBN).
Nairametrics had reported when the Federal Ministry of Transportation disclosed that President Muhammadu Buhari had okayed the disbursement of the CVFF in the first quarter of this year.