Cabotage Fund: Indigenous Ship Owners Heave Sigh Of relief

Nwangwu Uba

 After several years of behind  the scene maneuvering  by Indigenous ship-owners who are cash strapped to compete  with their  foreign  counterpart, the Nigeria Maritime Administration and Safety Agency, NIMASA, at the instance of Rotimi Amaechi, minister of Transportation  has finally agreed to disburse the Cabotage  Vessels Finance Fund, CVFF.

Dakuku Peterside, Director General, NIMASA, who broke the news  in Lagos, on Friday, April 26, 2019,  said  the Agency   are already working closely  with the  Presidency and the ministry of Transportation on the modality  to be used on the disbursement of the  fund , without falling into the trap of the  scrapped  Ship Building and Ship Acquisition Fund, SBSAF, which was abused by then beneficiaries of the soft loan. An elated Peterside  is optimistic that  as soon as  President Muhammadu  Buhari gives  the nod to the Agency  to go ahead  with the disbursement  of the fund , they would not hesitate  in doing so.

Dakuku Peterside: DG , nimasa

According to him, the $124 million  CVFF, is domiciled with the Central Bank of Nigeria, CBN, and not with any of the 25 Commercial Banks in the country. He disclosed  that the half year report of the Organisation   shows  that 125  vessels  had been registered , which represents  33 percent  increase  when compared to the 94 vessels that were registered  in corresponding period  in 2017. Perhaps, to forestall the beneficiaries of the  Fund from running into trouble  that may affect their business, Peterside and his Finance officials  , according to NIMASA , sources , are   also working  with the  apex Bbank, to secure a special forex  intervention  for procurement of vessel spare-parts to replace broken down parts  and the loan repayment processes.  

The  Value News Investigation  shows that the NIMASA  boss may have decided o champion the course of the Indigenous  ship owners  to get the CVFF loan with ease to be able  to compete with their foreign counterparts in building and acquisition of their own vessels instead of resorting to third party  of chartering of vessels  which  are time consuming and fund wasting.

Note that  Nigerian owned vessels account  for only 12 percent  of the country’s annual  oil trade market. This may be so because of the insistence of Shell Petroleum Development  Company, SPDC, and the other Oil Producing  Companies that the Indigenous Shipping Companies  do not have the prerequisite capacity to  lift crude oil for them  like the foreign Shipping Companies that own Oil Tankers.

Despite pressures  by past and present Director General of NIMASA,to force the Oil Companies to  include the  Nigerian owned Cabot age vessels on the  list  of vessels allowed to lift their  crude allocation to  the International Oil market  they were said to have worked against the letters and spirit of  the Cabotage Act   to ensure that it not work. They may have done so  to keep the Indigenous ship owners out of  the lucrative multi-million dollar business considereed an exclusive preserve of foreigners.

 Insiders tinformed The Value News  that  there is a particular clause in the Act  which  the Oil Companies had continued to cash on to  frustrate the  indigenous ship owners from participating in the Oil lifting  business, described in maritime circles as  the ”waiver Clause”.The waiver over the years, had been exploited  by the multi-national Oil Companies  to fence the  Nigerian ship owners  from participating in the business  on the ground that they do not have the required facility,  competence and financial wherewithal to  play  any reasonable role in  critical areas of the  industry.

NIMASA , officials, who over the years , may have been blowing  hot and cold over the matter  because of the cash constraint  of many of the  shipping companies  may be forced to restart the Campaign again to force the Oil Companies  to allow the indigenous shipping Companies lift the Country’s Crude Oil, with the planned disbursement of the CVFF,  between now and the end of the year . This is  expected to boost the finances of the cash strapped  indigenous shipping Companies  to replace their broken down vessels as well as  procure spare-parts based on a special foreign arrangement been being worked out  with the CBN. 

Investigation by The Value News shows that  NIMASA , under the current watch of Peterside  and with the support of Amaechi., the minister of Transportation, are working assiduously   to end  the Cabot age waivers  for foreign ship ownersbetween now and 2023..  The move, a source said  was being pursued by the Agency  to put an end  to the near  inability  of Indigenous Shipping Companies  to carry  Nigeria-generated cargo through the nation’s Coastal water ways.

The NIMASA boss may  have made matters easier for the Cabot age operators this time around so that  the oil Companies would not have any reason to exclude them from the lucrative business. Going by the Agency records,   2,840 Nigerian Officers  and ratings,  were recommended   to be placed onboard  Cabotage vessels  in 2018  as against 1,789 in 2017, an indication that Nigerian Seafarers are gradually taken over the job previous done by foreigners, particular Philippines, in wholly Nigerian owned vessels.  It is instructive to note that 243  graduates  and 1,600 CCadets  are  currently at various  stages  of completion of  the programme , 887  and are ready  for sea time training , which should serve as a pull of labour for the Indigenous ship owners.   

Meanwhile,  the Agency was said to have reviewed  freight rates  bench mark  for three percent  levy billing   ostensibly  to reflect  the prevailing realities in shipping, which is an international business.

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