By Samson Echenim
Mkgeorge Onyung, president of the Ship Owners Association of Nigeria (SOAN) has been added to the Cabotage Vessels Financing Fund (CVFF) committee set up by the minister of Transport, Rotimi Amaechi to come up with guidelines for the disbursement of the fund, which is being accessed by the indigenous ship owners for the first time, 15 years after it was created.
Rotimi Amaechi, minister of Transportation on Thursday, set up a committee to come up with guidelines for the disbursement of the CVFF, which he said had hit $200 million (N72.4 billion).
Onyung who was not among the members of the committee as at Thursday told business a.m that he was called to join the committee on Friday.
Headed by Dakuku Peterside, director-general of Nigerian Maritime Administration and Safety Agency (NIMASA), other members of the comittee are Temisan Omatseye, a former director-general, Margaret Orakwusi, chairperson, Nigerian Ship-owners Forum and Aminu Umar, managing director, Sea Transport Services Nigeria Limited, among others.
The CVFF is an intervention fund created alongside the Coastal and Inland Shipping Action, 2003, otherwise known as Cabotage Act. The fund is meant to provide leverage to indigenous ship owners for acquisition of vessels for the purpose of trading on Nigerian cabotage area. The fund has remained undisbursed to ship owners since 2003, but Amaechi said the fund had been earlier “applied to building a maritime university and faculties of maritime in other universities across the country.”
Speaking to journalists shortly after a meeting with indigenous shipowners and other maritime stakeholders in Lagos on Thursday, Amaechi said, “What we have agreed is to set up a committee that will come forward with the proposed guidelines that I will send to the National Assembly. The committee for developing the guidelines would be chaired by Dakuku Peterside.
“In the past, the money was applied to building a maritime university and faculties of maritime in other universities across the country. This would be the first time the money is applied to ship owners directly. The banks will be involved in developing the criteria for the disbursement of the fund, so the risk would be borne by the lending institutions,” he hinted.
Among other things, the Dakuku committee will determine the interest rate for the fund, which is to be taken as loan by ship owners who would meet the disbursement guidelines.
Commenting, Dakuku said, “The meeting was conveyed on the instance of the minister to discuss the singular issue of CVFF disbursement which the minister has gotten approval from the president. After extensive discussions by the stakeholders here, it was decided that the committee should come up with the draft guidelines.
“The minister would study this draft and pass on to the National Assembly for approval in line with the Cabotage Act. Thereafter, we would move to the next phase of actual disbursement using the banks as platform to be disbursed.”
However, Greg Ogbeifun, managing director of Starz Marine, has warned ship owners to first determine their abilities to be able to pay back, before applying to get the long-awaited fund.
Ogbeifun, a leading indigenous ship owner told business a.m in December that it was necessary to carry out a forensic audit of the CVFF to determine its true value before setting rules and guidelines for its disbursement.
Ogbeifun, had said that 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 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. Before any ship owner applies for the loan, he must have his expansion plans and must be able to pay back.”
