Engage PwC, KPMG or Philips to carry out forensic audit of Nigeria’s Cabotage fund, Ogbeifun tells Amaechi

By Samson Echenim

Nigeria’s leading indigenous ship owner, Greg Ogbeifun, has called for forensic audit of the Cabotage Vessels Financing Fund (CVFF) to determine its true value before setting rules and guidelines for its disbursement.

The Starz Marine CEO said this while reacting to the news of the approval for disbursement of the fund by President Muhammadu Buhari, which was announced in Lagos on Thursday by the minister of transportation, Rotimi Amaechi.

Ogbeifun told business a.m. on Friday, before coming up with ways to disburse the CVFF, the minister should engage a tax and audit management consultancy firm to thoroughly audit the account and determine what each shipping company and international oil companies (IOCs) have paid into the Cabotage account.

He also warned ship owners to first determine their abilities to be able to pay back, before applying to get the long-awaited fund.

He said, “Let me commend the minister of transportation for securing approval from the president to disburse the cabotage fund. The fund has been in existence for 15 years without an approval given before now to access it. However, a forensic audit must be carried out to ascertain the exact amount in the CVFF account. There has been no basis for knowing the exact amount. Many sources simply cite different amounts and I don’t know which is correct. My company has been contributing into that account since 2010.

“The minister must adopt a process that must be flawless. He will need to engage a renowned consultant, such as PwC, KPMG, or Philips Consulting to carry out a forensic audit of the CVFF account. They will need to work with all contributors to the fund to determine how much is there.

“We have our records clean, because our contribution is taken from source, so I can tell you how much my company has contributed. Every company must have their records too. Again, the consultants must engage the IOCs who have deducting two percent of our contract value and remitting to NIMASA. NIMASA should have a clean account of this money.

“I will not be in a hurry to start saying I want to get the loan. Before any ship owner applies for the loan, he must have his expansion plans and must be able to pay back.”

Amaechi, minister of transportation had announced to maritime stakeholders at a shippers forum in Lagos on Thursday President Muhammadu Buhari had approved disbursement of the CVFF, to indigenous ship owners.

He said the ministry would begin meetings with indigenous ship owners in January to commence the disbursement process.

The CVFF is a special intervention fund created alongside the country’s Coastal and Inland Shipping Act, 2003, otherwise known as the Cabotage Act, to assist indigenous ship owners with acquisition of vessels to enable them operate maximally in the country’s cabotage trade. The fund was also to form a source of aid to enable local ship owners compete favourably against foreign ship owners in crude oil freighting on the Nigerian waters.

While the minister did not disclose the current value of the CVFF, business a.m. gathered that the fund has reached $124 million (about N44.6 billion) as at June, 2018. The CVFF has remained undisbursed since its creation in 2003, despite cries and efforts by industry operators to access the fund which is under the custody of the Nigerian Maritime Administration and Safety Agency (NIMASA). The Federal Ministry of Transport which supervises the agency had cited fears of insincerity on the side of ship owners for not disbursing the fund.

Amaechi said, “I have got approval to disburse the CVFF. I just want want to use this opportunity to inform stakeholders that the president has approved the caboatge fund and by Tuesday I will meet with the Nigerian Shippers’ Council and NIMASA to look at the dynamics of the fund. In January, we will invite the operators for their proposals and to see the nature of their businesses and how they can get the aid. The president has given the approval and we will begin the process to disburse it by next year.”

Amaechi also told maritime and port stakeholders at the NSC SAN 2019 that he was determined to fight maritime insincerity to a standstill. The minister lamented Nigeria’s current dangerous position in maritime security and accused Nigerian elites of cheating the system and not allowing genuine fight against sea crimes and piracy.

“Nigeria is currently ranking No. 1 in maritime insecurity. A few years ago, the Gulf of Aden was No. 1, but now Nigeria is No. 1. I went to see the Indian high commissioner yesterday, because 18 Indian nationals were kidnapped on Nigerian waters and as I talk to you, India has issued notice to her seafarers and citizens that they should stop going to Nigerian waters.

“I have said to myself that I will go public with this battle to secure Nigerian waters. Every opportunity I have to make a speech, I will talk about it. Nigerian elites must allow Nigeria to grow as a nation,” the minister said.