By Stephen Ubanna
Between March , 2020 and now, Bashir Jamoh, Director General, Nigerian Maritime Administration and Safety Agency, NIMASA, has dominated the News in the nation’s maritime sector.. This is because of his reformist agenda to reposition the sector.
Only recently, Jamoh, the NIMASA, Director General, broke the cheery news to the members to the Ship-owners Association of Nigeria , SOAN, that the NIMASA, has secured the Presidential approval for the disbursement of the $200 million Cabottage Vessel Financing Fund, CVFF.
The approval was said to have been secured through Rotimi Amaechi, a former governor of Rivers state and now minister of Transport. The CVFF, was established by former President Olusegun Obasanjo as contained under the Coastal Inland and Shipping Cabottage Act 2003, which he signed into Law.
Between 2017 and 2020, the leadership of Ship- owners Association of Nigerian, SOAN, had intensified their pressure on NIMASA and the Federal ministry of Transport, under the close watch of Amaechi to disburse the fund instead of keeping ship-owners waiting.
Mkgeorge Onyung, the SOAN , President, who could not hide his feelings had lamented that the delay in the disbursement of the Fund had created much problem for the indigenous ship-owners who are finding difficult to take over from the Foreign operators who still dominate the lifting of the country’s Crude oil to the International market.
He could not understand why NIMASA could hold on to the fund instead disbursing it to the ship-owners in order to boost their operational capacity and compete strongly in cargo freitage with the foreign shipping Companies.
Recall that Greg Ogbeifun, a former President of SOAN,was said to have pushed hard to see that the Fund was disbursed to the ship owners during his tenure. He had said that the ‘’non-disbursement of the Fund had affected the activities of the indigenous ship-owners to compete favourably in the global maritime sector. Although out of office, he insists that’’ the Fund must be released to allow Nigerians acquire vessels and be able to take their rightful position in the nation’s maritime sector’’.
Schedule 43, part VIII, of the Act setting up the CVFF, gave an insight on how the money in the Fund was realised. The Act had stated ’’there shall be paid into the Fund , a surcharge of two percent of the Contract sum performed by any vessel engaged in Coastal trade in the country’’. This is in addition’’ to the revenues generated from tariffs, fines and fees for licenses and waivers’’.
Other sources of income to the fund include interests paid on and repayment of the principal sums of any loan granted to any ship –owner. There was also said to be funds from the primary lending Institutions, PLIs, which were accredited to the Fund. Among the accredited Commercial banks linked to the Fund included Fidelity bank, Skye bank, now baptised Polaris bank by the Central Bank of Nigeria, CBN, under the close watch of Godwin Emefiele, and Diamond Bank, which had been acquired by Access Bank , on the orders of the CBN. The PLIs, were said to have contributed 50 percent of the $200 million that had accrued into the Fund.
It could not be ascertained whether there had been other banks that had been selected to join the existing PLIs with the increase in the size of the Fund over the last 10 years in order to manage it as a Commercial facility. The argument in financial circles is that Fidelity and the other existing PLIs are too small to manage the mult- million dollar fund. They had expected the agency to engage the five banks: UBA, a Pan-African Bank, Zenith , Guarantee Trust Ban, popular, GTB, Access Bank and First Bank , to be part of the PLIs for the management of the Fund as a Commercial facility.
Going by the Act setting up the Fund , it was basically meant for the facilitation, acquisition and ownership of vessels to be employed in the domestic and Coastal trade by indigenous shipping Companies and individuals as well as vessel Charterers.
It was also meant for the development of shipyard, maritime infrastructure to facilitate vessel construction, repairs and maintenance, as well as other shipping auxiliary projects relating to the development of local tonnage capacity and shipyards.
Signs that the indigenous ship –owners may soon start accessing the Fund, without the government shifting of the gold post again emerged last December when the minister of Transport hinted at the Nigerian Shippers Council, NSC end of year Stakeholders Appreciation Night that the Kastina state born Nigerian President has given approval for the disbursement of the Fund to ship –owners.
The revelation was said to have been quickly followed by the setting up of a Committee last February for the disbursement of the Fund, headed by Peterside, the then Director General of the agency. The Committee had a mandate’’ to fine-tune the guidelines for disbursing he Fund to the ship –owners who qualify for the loan’’.
Insider sources had informed The Value News that the maximum amount a ship owner could be allowed to given from the Fund as a loan was $25 million and shall have a maximum of seven years to repay back Completely. The source disclosed that the loans are to be disbursed to the beneficiaries in the United States dollars and not in local currency because shipping is an international business.
Perhaps to ensure that the ship-owners would not experience any difficulty in the procurement of the ships for their business, the agency was said to have recommended the Fiscal and Monetary incentives to the minister to seek for the disbursement of the funds on a single-digit interest rate of 5.6 percent and 0.25 percent processing fee but that was how far the then Management could go.
Many of the ship –owners had expected that with the removal of Peterside as the Director General of the Maritime Regulator agency last March by President Muhammadu Buhari, that the ban on the use of the oil Single- hull tankers in the country by December 31, 2020, would be reversed. Some of the ship-owners using such oil tankers were said to have been planning to procure additional Single- hull tankers if given the loan, an indication that they were not ready to comply with the NIMASA directive.
Jamoh, the NIMASA boss may have shattered their plan at a recent meeting in Lagos. He was said to have told such desperate ship-owners who think that the agency would allow them to use the Single-hull tankers in Nigeria waters to have a rethink. He has his reason. A decision has been taken on the matter under the previous Management to completely phase out the use of the Single- hull tankers in Nigeria waters by December 31, 2020. ‘’There was no going back on the decision’’, he had said.
He was said to have advised the indigenous ship-owners still using the phased out Single –hull tankers ‘’to start making adequate preparation to comply with the December 31, 2020, deadline to replace it for their Coastal trade or be grounded to a halt.
As a prelude to arriving at the decision to phase out the Single –hull tankers from Nigeria, The Magazine was informed that the agency under the previous Managemen t in 2015, had discussed the timeline for discontinuing the use of such oil tankers with the ship owners.
Given an insider information to the discussion with the ship-owners, as the then Executive Director, Finance and administration , Jamoh, who is now the Director General,, had said that they were given five years to comply with the ban, describing it as ‘’a generous allowance’’.
He noted that the agency the same year had revised the timetable for the phase-out of the Single-hull oil tankers in Nigerian waters. The NIMASA Director General had attributed the revision of the timetable to the decision of the International Maritime Organisation, IMO, under the close watch of Kitack Lim ‘’to extend its deadline for the ban on the Single –hull tankers for certain categories of tankers not engaged in international trade.
The NIMASA, boss disclosed that the agency had utilised the opportunity provided by the IMO, extension window ‘’to shift the final phase-out date for the Single-hull oil tankers to December 31, 2020. The Magazine cited the IMO’s revised Regulation of annexes I to the International Convention for the Prevention of Pollution from ships, MARPOL, which required Flag administrations to phase-out categories II and III Single –hull tankers by 2015. However, it extended the deadline for some other oil tankers not engaged in International trade ‘’owing to the difficulty in achieving wholesale fleet replacement’’.
He maintained that the ship-owners need not worry themselves about the disbursement of the CVFF as it was meant to assist operators in the acquisition of maritime assets, noting that ‘’shippers are the beacon and hub of any developing economy’’.
He may have gladdened the heart of the ship owners when he said the details of s the scheme were being considered before commencement of the pay-out. The NIMASA boss had said that only the fine details for the disbursement of the $200 million or N72.4 billion Fund are currently being discussed with the ship –owners with a view to avoiding the mistakes made in the administration of the scrapped Ship- Acquisition and Ship Building Fund, SASBF, by the then General, rtd, Ibrahim Babangida administration over alleged abuse.
The NIMASA Director General confirmed that a proposal had been submitted to the minister’’ to seek fiscal and monetary incentives for the indigenous ship-owners. The proposal, according to sources was not different from the earlier one submitted to the ministry under the Peterside administration.