After so many years of failure by successive administrations to disburse the controversial Cabotage Vessels Financing Fund (CVFF), the Minister of Marine and Blue Economy, Adegboyega Oyetola, has raised the hope of indigenous shipowners by directing the Nigerian Maritime Administration and Safety Agency (NIMASA), to begin the process for the disbursement of the Fund.
The CVFF, an intervention fund, was established under the Coastal and Inland Shipping (Cabotage) Act of 2003. While contributions to the fund began in May 2004, the fund’s intended purpose of providing credit to local maritime operators for vessel acquisition has largely remained unimplemented. Several attempts by the successive government to disburse the CVFF, such as shortlisting banks to disburse the fund in late 2022, had met brick walls. To this effect, shipowners and other maritime stakeholders have lost faith in the disbursement.
The Shipowners had argued over the years that the disbursement of the fund would boost and stimulate the sector and promote the development of indigenous ship acquisition capacity in Nigeria.
They argued further that the fund would empower the indigenous shipping companies and as well provide them with access to structured financing for vessel acquisition but, unfortunately, it had remained undisbursed, with the sector’s growth retarded.
However, with the announcement, the Minister rekindled the hope of stakeholders, especially Indigenous Shipowners who had long been struggling with their business over the years.
However, the DG of NIMASA, Dr Dayo Mobereola, in alignment with the Minister’s directive, recently disclosed that the agency would disburse the $700 million Cabotage Vessel Financing Fund (CVFF) within the next four months adding that efforts are underway to ensure that Indigenous Shipowners access the fund. “What we have done is to streamline the guidelines according to what has been approved by the Minister of Marine and Blue Economy to ensure that it takes nothing less than three to four months for Indigenous ship-owners to access the funds. “What is most important about it is that we are also making use of the banks. So, it will not be a NIMASA project because the banks are going to carry out the initial risk assessment to be sure that whoever wants to access this fund has the financial capacity to repay. “The bank is going to lend 35 per cent while NIMASA is going to lend the other 50 per cent. So, that risk is being taken on by the bank to ensure that whoever is coming to us is a bona fide shipping company that can trade and who can also repay because it’s a revolving fund. He stated. This assurance by NIMASA has further rekindled Shipowners’ hope who, after several years, expressed optimism, hope and belief in the current administration’s readiness to disburse the fund.
Speaking, the Managing Director of Starzs Marine and Engineering Ltd, Greg Ogbeifun, said the Minister’s directive is a welcome development that will further spur the growth of the sector. Ogbeifun, who was a former President of the Shipowners Association of Nigeria (SOAN), urged that the government must allow due process according to the requirements of the Act. “Even, when you look at the previous guidelines, there is good reason to at least believe that the Minister is acting accordingly. But I don’t know if the requirements of the Act as it relates to the legislating part of government are followed, he said.
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Also speaking, the current President of the Shipowners’ Association of Nigeria (SOAN), Sonny Eja, also applauded the Minister, saying the decision was a welcome development. He further that aside from being long overdue, partnering with the Bank of Industry (BOI) for the disbursement is another feat. “I would say this is a welcome development. Though it’s long overdue you know like I’ve always said to people ‘Don’t blame yourself for not doing something yesterday or for not doing something last week or last month, the best time to start is now and so it’s a welcome development and I’m equally excited at the fact that they are partnering with BOI in respect of this fund. For me, to hear that they’re going to work with BOI to disburse this fund is quite a good development, too. “Of course, the single obligor of $25 million is okay, it’s a welcome deployment as well as it would allow the borrowers to adequately use the fund judiciously,” he said.
Eja who is also the Managing Director of Petro marine Nigeria Ltd, urged that the government should put measures in place that would ensure that beneficiaries put the fund to good use. “Thirdly, I want to believe that they have set the right criteria for accessing these funds and I want to believe also that they have put in place very, very, good measures to recover these funds so that people don’t just access these funds and divert them for other purposes and then they are not able to pay back. “Whilst we commend the minister and the federal government through Mr President, we equally would urge whoever the beneficiaries of this fund will be, to ensure that they’re put into good use so that it won’t give the industry a bad name that either ship owners or other stakeholders just access this fund, and, they now become non-performing loans. “I believe also that the equity contribution that they have put in place is okay so that there’s a commitment on the part of the borrower to know that okay, I equally have a part to play accessing these funds,” Eja stressed.
The President of the Nigerian Shipowners Association (NISA), Sola Adewunmi, also commended the Minister, saying it was the first time a Minister would direct NIMASA to commence the process for disbursement of CVFF. He further stated that with the Minister’s directive, the guidelines should be rolled out to beneficiaries to know how to access the fund. “With the Minister’s pronouncement, let’s hope that things will change. But let us see the guidelines first. Also, I think this is the first time a Minister will come out to say, NIMASA, start this process. So, let’s see, we are all waiting for the guidelines. When the guideline comes out, we’ll know if it is something that will be realistic,” he stated.
President of the Maritime Security Providers Association of Nigeria (MASPAN), Emmanuel Maiguwa, urged NIMASA to undertake thorough market research and industry consultation before releasing the much-anticipated $700 million Cabotage Vessel Financing Fund (CVFF). He welcomed the directive issued by the Minister for the immediate commencement of the fund’s disbursement but underscored the need for strategic foresight and adaptability in how the fund is managed. “It is about time we opened the fund to enable growth in the maritime industry. But I urge the government to make adequate preparations and allow for flexibility in the guidelines. That means putting in place a mechanism that will permit prompt reviews of those guidelines, should any challenges emerge in the first phase of implementation—whether for the government or shipowners,” he said.
He pointed out that although parallels are being drawn with the funding model of the Nigerian Content Development and Monitoring Board (NCDMB), the two frameworks are not directly comparable.
“It’s not the same as the NCDMB model, because NIMASA cannot offer a robust market guarantee,” he explained. “The NCDMB is more strategically placed to secure its funds through direct contractual engagements within the oil and gas industry.”
He appealed to NIMASA to carry out a detailed market assessment and broaden engagement with stakeholders, to guard against poor investment decisions and to ensure the long-term viability of the initiative. “Since I haven’t come across any comprehensive study outlining the market’s prospects and investment priorities, I encourage the government to improve its communication and consultation with relevant actors. This will deepen their understanding and offer richer insights,” he said. He further urged the maritime agency to generate and disseminate timely market intelligence, which would help both existing and prospective investors make better-informed choices.
While acknowledging that many private entities may already have their market data, Maiguwa warned that a fragmented approach could ultimately undermine the industry’s collective progress. “When these individual strategies and investments are aggregated within a broader national context, they shift the competitive dynamics—not just for the firms involved, but for the entire maritime sector and the country at large,” he added.