NIGERIA’S MARITIME INDUSTRY: BENEFITS OF PLANNED CVFF FUND DISBURSEMENT
Nigeria’s Maritime industry Benefits of Cabotage Vessel financing Fund Disbursement
By Babatunde Aremu
The Federal Government of Nigeria has taken a significant step towards empowering indigenous shipowners by directing the Nigerian Maritime Administration and Safety Agency (NIMASA) to commence disbursement of the Cabotage Vessel Financing Fund (CVFF).
This initiative aims to boost vessel ownership, create jobs, and stimulate local shipbuilding in the maritime industry..
The CVFF disbursement is expected to enhance the capacity and competitiveness of Nigerian shipping companies. With funding of about $25 million per eligible company at competitive interest rates, indigenous shipowners can now acquire vessels through structured financing. The single-digit interest rate and 8-year repayment tenure with a 2-year moratorium will ease the financial burden on shipowners, allowing them to focus on growing their businesses.
The CVFF disbursement will be made through 12 designated Primary Lending Institutions (PLIs), including First Bank, Fidelity Bank, Zenith Bank, and UBA. To be eligible, vessels must be Nigerian-owned, Nigerian-built, Nigerian-operated, and Nigerian-managed, and acquired within 12 months prior to application.
The CVFF disbursement is expected to have a positive impact on both Nigeria and shipowners. Some of the benefits include:
– *Increased Local Content*: The CVFF will increase participation of Nigerian maritime operators in coastal and inland waters, promoting local content and economic growth.
*Job Creation*: The initiative is expected to generate employment opportunities for Nigerian seafarers and stimulate ancillary maritime services.
– Reduced Capital Flight*: By promoting national shipping fleet growth, the CVFF will minimize foreign vessel chartering and reduce capital flight.
*Economic Resilience*: The CVFF disbursement will contribute to Nigeria’s economic resilience and maritime sovereignty, affirming the government’s commitment to local content and economic development.
Minister of Marine and Blue Economy, Adegboyega Oyetola, emphasized that this initiative marks a significant milestone in Nigeria’s maritime development.
“This is a clear demonstration of the government’s commitment to empowering indigenous shipowners and promoting local content in the maritime industry,” he said.
The disbursement of the Cabotage Vessel Financing Fund is a welcome development for indigenous shipowners and the Nigerian maritime industry as a whole. With its potential to boost vessel ownership, create jobs, and stimulate local shipbuilding, this initiative is expected to have a positive impact on the economy and contribute to Nigeria’s maritime sovereignty.
It is hoped that transparency and accountability will be applied to the Disbursement of the Fund. It is also expected that the funds will be channelled towards achieving the desired goals of ensuring Growth in Nigeria’s Maritime industry
