Four banks appointed by the Federal Government as Primary Lending Institutions, PLI, for the disbursement of the Cabotage Vessel Financing Fund, CVFF, have been charged to determine interest rate and other key issues to ensure smooth disbursement of the money.
The banks include, Zenith bank, Jaiz Bank, United Bank of Africa (UBA), Union Bank and Polaris Bank.
The Nigerian Maritime Administration and Safety Agency, NIMASA, Director General, DG, Dr. Bashir Jamoh, after a closed door meeting with the banks, said the engagement is a major step towards the implementation of the Presidential directive on disbursing the CVFF as announced by the Minister of Transportation, Engr. Mu’azu Jaji Sambo, late last year.
Jamoh noted that their engagement was to ensure that the Agency and the PLIs are on the same page to ensure that lessons from the past will prove useful in implementing the CVFF disbursement and lead to developing shipping and the blue economy in Nigeria.
He said, “we are engaging the banks on the management and disbursement of the CVFF because they are the ones who have the professional know-how in fund management and this would help us in the reduction of risk in order to avoid the same mistakes of the Ship Acquisition and Ship Building Fund”.
The banks are expected to come up with issues such as the interest rate, tenor, collateral, and other requirements needed to access the fund. NIMASA is of the position that the interest rate should be of international best practices because the fund being disbursed is Dollar denominated.”
The DG also noted that the CVFF regime is a win-win for all stakeholders involved including the banks adding that the banks should look at the windows of opportunity inherent for the benefit of all parties involved. On their part, the PLIs applauded the initiative and pledged their support towards ensuring judicious use of the funds to the beneficiaries in order to ensure accountability of the funds are guaranteed.
The Managing Director of Jaiz bank, Dr. Sirajo Salisu, who spoke on behalf of the PLIs assured of prompt action towards disbursing the funds, noting that interested shipowners should be ready to abide by the provisions of the Cabotage Act. “We will try our best to partner with the beneficiaries or the proposed beneficiaries of these funds and I believe they are much aware that this is not a grant, this is money that is meant for a purpose and we will ensure that that purpose is achieved to the benefits of the country.” He said.
It is noteworthy that the Cabotage Act provides that NIMASA makes 50 per cent available, the PLIs are expected to support the project with 35 per cent, while intending shipowners would be required to make their contribution of 15 per cent of whatever amount of money is needed for the acquisition of a vessel.