- The Nigerian government has yet to pay the N420 billion Cabotage Fund to shipowners
- The past government of Muhammadu Buhari ordered the immediate disbursement of the fund in 2022
- Five commercial banks were appointed for the distribution of the fund
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The disbursement of over $350 million, about N420 billion Cabotage Vessel Financing Fund (VFF) 10 months after the Nigerian government appointed five banks as primary lenders, may have hit the waters.
In December 2022, the Nigerian government announced the appointment of five commercial banks for the rapid and easy disbursement of the fund, 20 years after it began collection.
FG appoints five banks for disbursement
Union Bank, Zenith Bank, Jaiz Bank, UBA, and Polaris Bank were the approved banks for the initiative.
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Daily Trust reports that ex-Transportation Minister, Mauzu Sambo, said at the flag-off of Batch B of the third phase of the Nigerian Seafarers Development Programme (NSDP) that former President Muhammadu Buhari ordered that the fund be disbursed immediately.
However, 10 months after the appointment of the banks for the disbursement, more needs to be done.
The development comes amid calls by indigenous ship owners, the Nigerian Maritime Administration and Safety Agency (NIMASA), and commercial banks for the disbursement of the funds to speed up the process of giving the funds to eligible Nigerian ship owners to acquire new ships.
The fund is an intervention created in 2003 to provide financial aid to indigenous ship owners operating in the local coastal shipping, enabling them to take control of the cabotage trade.
Banks and NIMASA disagree on interest rates
The fund is generated from the two percent of the contract sum performed by any vessel engaged in cabotage trade.
NIMASA and the management of the financial institutions have held a series of meetings on the interest rate.
The agency insisted that the counterpart fund from the institutions be single-digit.
But the banks said single-digit was not feasible considering the operations of shipping firms in Nigeria.
Bashir Jamoh, the Director-General of NIMASA, said the agency had written an update to the current Minister of Marine and Blue Economy, Gboyega Oyetola, on how far the agency had gone regarding the fund.
Jamoh said it would take some time for the minister to act on the letter, considering he was recently appointed.
After 17 years of waiting, FG to share N145bn Cabotage fund as Zenith, UBA, others prepare for implementation
Legit.ng earlier reported that the disbursement was scheduled to kick off on March 2023.
According to a report by Leadership, the available funds for disbursement stand at slightly over N16 billion and $350 million.