Deceit, uncertainty dogged disbursement of Cabotage Funds —as NIMASA claims $100m accruals trapped in CBN vault.

By Funso Olojo

High level of official deceit, controversies and uncertainty have continued to stall the disbursement of the Cabotage Vessel Financing Funds(CVFF) 13 years after it came on stream to give succour to the army of depleted indigenous ship owners

In what appears to be an interplay of political manoeuvring steeped in thick layers of lack of transparency, successive Ministers of Transport and Director-Generals of Nigerian Maritime Administration and Safety Agency(NIMASA) have successively played on the intelligence of the beleaguered Indigenous ship owners for whom the funds is meant.

CVFF was the product of Coastal and Inland Shipping Act (Cabotage) 2003 created to develop and empower the ill-capitalised indigenous ship owners to enable them effectively carry out cabotage trade and edge out their better capitalised foreign counterparts.

It was the two per cent contribution from the cabotage contract by the indigenous ship owners warehoused with NIMASA.

Right from the tenure of Shamsudeen Dosumu through Temisan Omatseye and the controversial Patrick Akpobolokemi to the incumbent NIMASA DG, Dakuku Peterside, the actual amount of the funds has remained a subject of conjecture as the actual amount has been mired in controversy.

While previous NIMASA administrations have kept mum on the actual amount accrued from the funds, allowing stakeholders the luxury of making wild guesses, Dakuku has come out to put the amount to the tune of $100m which he claimed is now trapped in the CBN.

Disbursement as a game of deceit

 

Apart from the thick cloud of uncertainty hovering on the actual amount, disbursement of the funds which the prospective beneficiaries have over the last 10 years waited for with bated breath, has also been subjected to guessing game.

The game of deceit on the disbursement of the funds actually started under the tenure of Dosunmu as NIMASA DG while Ibrahim Bio was the minister.

Both Bio and Dosumu promised to disburse the funds but it remained a mere promise until Temisan Omatseye took over as the NIMASA DG who continued the game of deceit until he was unceremoniously removed from office.

His successor. Patrick Akpobolokemi, was theatrical in the disbursement blues of the funds as he elevated the entrenched deceit into an act.

Despite the assurances of the then Minister of Transport, Idris Usman, Akpobolokem kept deceiving stakeholders of the readiness of NIMASA to disburse the funds, the actual amount he was evasive to disclosed during his tenure.

However, in 2014 during the tenure of Akpobolokemi as NIMASA DG,   the then Transport Minister, Senator Idris Umar revealed that a total sum of $150 million had accrued to the Fund.

As a matter of fact, the funds suffered serial looting as the administration of Akpobolokemi allegedly dipped his hand into the CVFF to fund the purchase of the land for the then proposed maritime university, Okerenkoko to the tune of N13billion.

This much was confirmed by the incumbent Minister of Transportation, Rotimi Amaechi at one of his official functions last year.

Akpbolokemi was said to have also allegedly funded the National Seafarers Development Programme (NSDP) for which it’s about its 2500 beneficiaries are left stranded without the requisite sea time training experience.

The official deceit got to a head at the twilight of former Jonathan Administration when the All Progressive Congress(APC), then in the opposition, accused the Akpobolokemi’s led NIMASA of massive looting of the CVFF.

This drama continued unabated under Akpoblokemi until he was booted out, subjecting the indigenous ship owners, most of who were then in the throes of death, to an agonising wait for the interventionist funds meant to stimulate their operations.

 The waiting game continues

 

The situation was less from been cheerful under the incumbent administration of Dakuku Peterside whose political rhetorics have only help to exacerbate the anger of the weary ship owners and compound the uncertainty.

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This was after Amaechi had declared that part of the CVFF would be used to fund the proposed National Shipping Line being proposed by the Federal government.

Dakuku has continued with the oft-repeated assurances of the past administrations to disburse the funds which have now become a hollow sound to the hearing of the beneficiaries.

At a recent official outing in Lagos, Dakuku disclosed that the accruals are $100M(N36.5billion) which is trapped in the CBN vault, a claim stakeholder took with a pinch of salt.

“We are determined to disburse CVFF according to the law and according to regulation. We are dedicated, we are committed and we are passionate about disbursing it. We would match the CVFF fund with some money coming from the financial institutions. This will crash the rate of borrowing, and that is why we are passionate about disbursing CVFF to bring our own funds to come almost at the cost of nothing and match it with their own fund coming at the rate of 25 per cent. The first thing that would happen is that the rate would crash from 25 per cent to a one digit interest rate. “CVFF is lying at the Central Bank of Nigeria under TSA arrangement, we are working hard to disburse it and it is over a hundred million dollars. We are in talks with the Central Bank of Nigeria’’, Dakuku sermonised.

Stakeholders questioned the rationale behind the claims that the CVFF is logged with the CBN, claiming that the funds has been lying in the vaults of commercial banks with accrued interests over the past14 years which they alleged have not been accounted for by successive NIMASA administrations.

An official source claimed that the fund is lying with the four primary lending institutions(PLIS) selected to manage the funds under the new guidelines which include Diamond Bank, Fidelity Bank, Skye Bank and Sterling Bank.

‘’They(Funds) are with the primary lending institutions, which are Diamond Bank, Skye Bank, Fidelity Bank and Sterling Bank. We signed agreement with them to act as primary lending institutions under the Cabotage Vessels Financing Fund. So, they are keeping the money because they have agreed to put their own money into the fund, offering expected loan seekers 35 per cent of their money and some percentage from the fund, while the applicants are expected to contribute 25 per cent cost of the project for which loans are being sought.”

The banks, he said, have been paying three per cent interest on the funds

‘’How can they say the money is lodged with the CBN when it was a tripartite funding arrangement between indigenous ship owners, the banks and NIMASA. It was purely government funds that could be lodged with the CBN’’ an agitated ship owner queried.

Another respondent observed that the TSA was a recent development while asking for the account of the huge interests the funds have garnered over the last 10 years for which he said nobody was ready to disclose.

It could be recalled that the tripartite contribution arrangement of CVFF involved 15 per cent by the beneficiary, 50 per cent by the Primary Lending Institutions while the remaining 35 per cent would be cash backed by NIMASA.

The anger in the industry

 

Stakeholders, especially indigenous ship owners, are said to be tired of the endless waiting game of NIMASA and the Ministry of Transportation over the disbursement of the Funds.

President of the Shipowners Association of Nigeria (SOAN), Engr. Greg Ogbeifun recently ventilated the frustrations of his members over the endless delay when he disclosed that the association has written on why NIMASA can no longer hold on to the Cabotage Vessel Financing Fund (CVFF), saying time has come for the disbursement.

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“We will engage the authority. For instance, Starz group contributed $1.25 million, C&I Leasing contributed $1.8 million, Slok contributed over $1 million while Seabulk contributed $1.3 million”.

“We have all contributed to the fund and if we have a genuine transaction, we have the right to meet the government to disburse the fund,” he said.

“Members of SOAN who have genuine transaction have applied for CVFF and we are waiting to see how they will react to that. We will also collectively engage them’’, he declared.

The frustrations of the ship owners were justified going by the fact that as far back as 2014, about 100 indigenous operators showed interest in the loans. After rigorous screening, six of these companies were pencilled down as having met the conditions set by the PLIs to benefit from the fund.

They include Starzs Investment Company, Aquashield Oil and Marine Services Limited and UTM Dredging Limited all based in Port Harcourt. Others are Zomay Marine and Logistics Limited and Seabulk Offshore Operating Nigeria Limited based in Lagos. The Calabar-based Nkrah Investment Ltd was also listed as a beneficiary. So far, none of these prospective beneficiary-companies has obtained the loan.

Captain Iheanacho, a ship owner, operator of the tank farm and former Minister of interior described as strange the unending waiting game over the disbursement.

“NIMASA should address the issue. It is a strange thing that the CVFF that was conceived so many years ago with so much money contributed by people who offer and users of shipping services and we are still at the stage where people are talking about disbursing it.

“What is the purpose of CVFF? Then you have to finance those who are stakeholders and people who contributed this fund. There must be criteria for determining those who qualify and for those who meet that criteria. Then there is no reason why that money should not be disbursed. The money should not be diverted into other uses or other courses. The money is specific to the promotion of indigenous capacity in shipping and ought to be applied to that end,” he said.

Capt Dada Labinjo, Factional President, Nigerian Indigenous Ship-owners Association (NISA) declared “it will be preposterous if I say NIMASA is serious or not this time around. The guidelines are clear.”

Dipo Alaka, a maritime lawyer said the call for the establishment of a maritime bank has become necessary as the CVFF accruals have grown to millions of dollars without any shipping firm benefiting from it. Most contributors, he said, do not know the actual amount in NIMASA’s care.

Alaka said ship owners were sad that they did not benefit from the fund. A maritime bank, he said, would be more appropriate to handle the CVFF with NIMASA stripped of custodianship of the fund.

The indigenous ship owners have every right to be angry because most of them have lost their business to the cold hand of economic recession which has resulted to the liquidation of their businesses by the creditor’s banks which have moved in to strip them of their assets and take over their businesses.

However, except the present NIMASA management has the political will to break the complicated cloak of deceit wrapped around the disbursement of CVFF, the waiting game continues.