15% Equity of the CVFF Payment Alarms Ship-owners, As NIMASA Locks in Administrators

15% Equity of the CVFF Payment Alarms Ship-owners, As NIMASA Locks in Administrators

By Kathy Kyari 
The federal government's decision to distribute the Cabotage Vessel Financing Fund (CVFF) has sparked enthusiasm and confidence, but the 15% equity that shipowners must give has worried some prospective operators.

The Nigerian Maritime Administration and Safety Agency (NIMASA) management recently met with local shipowners to discuss how to ensure the smooth payment of CVFF.

In accordance with the CVFF's standards for disbursement, interested shipowners are required to provide 15% equity, along with 35% from banks or Primary Lending Institutions and 50% from the CVFF.

Nevertheless, Mr. Rowaye Jibril expressed concern at a meeting of the Nigerian Indigenous Ship-owners Association (NISA) yesterday that the 15% equity could be a barrier to accessing the fund, pointing out that the majority of Nigerian ship-owners are already deeply in debt and have their assets seized by the Assets Management Corporation of Nigeria (AMCON).

While this was going on, Chief Isaac Jolapomo, the Chairman of the Board of Trustees (BOT) of NISA, suggested that local shipowners might want to consider a strategy used by oil and gas operators who receive 100% equity from the Nigerian Content Development and Monitoring Board (NCDMB) and the lending institutions.

However, Jolapomo revealed that prior efforts by the group to obtain a court order to halt CVFF disbursement have been abandoned as a result of a meeting between a NISA delegation and the NIMASA management.

Dr. Bashir Jamoh OFR, Director General of NIMASA, had called for the court action to be suspended while urging all shipowners to band together in order to press their demands for guidelines for CVFF disbursement.

The NIMASA Director General also stated that the Minister of Transportation, Alhaji Mu'azu Jaji Sambo, had yet to establish a Committee to oversee the CVFF disbursement guidelines.

As a result, at a meeting with the NISA CVFF Advisory Committee, led by Chairman Dr. Edward Sohwo, the Director General of NIMASA suggested that the name of the Committee be changed, with the word 'CVFF' removed, to avoid any confusion from the Ministry of Transportation or the larger maritime community. 

Whilst promising the Committee that a team made up of NIMASA, PLIs, and ship-owners would draft the final criteria for CVFF disbursement, Jamoh urged the operators to work out their disagreements in order to ensure the CVFF was distributed smoothly.
Furthermore, yesterday NISA hailed the successful rapprochement of the association's resentful members and started taking steps to set a new course for efficient dispute settlement.

Prince Olayiwola Shittu, the chairman of the NISA Reconciliation Committee, presented the committee's findings to Chief Isaac Jolapomo, the chairman of the NISA Board of Trustees, after months of discussions and deliberations.

"We are thrilled to announce that the association is now harmonious because all of the offended members have been made amends. For being able to put their disagreements aside in order to advance this organization, Prince Shittu commended them.

However, Shittu pointed out that the Reconciliation Committee's operations revealed a lack of issue resolution procedures inside the association and suggested a dispute resolution plan.

As a result of the Reconciliation Committee's successes, the NISA General House decided to keep it in place for ongoing reconciliation efforts while also giving it a new mandate to reconcile NISA with operators outside the association, particularly the Ship-Owners Association of Nigeria (SOAN)."

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