The House of Representatives on Thursday mandated authorities of the Nigerian Maritime Administration and Safety Agency (NIMASA) to commence the disbursement of the $700 million accrued into the Cabotage Vessel Finance Fund (CVFF).
Chairman, House Committee on Nigerian Content Development and Monitoring, Hon. Legor Idagbo disclosed this during a press briefing held in Abuja while giving an update on the outcome of the investigative hearing into the planned disbursement of the fund.
Recall that the House had during its sitting on Tuesday, 4 May 2023, deliberated on a motion on the planned disbursement of $700 million Cabotage Vessel Finance Fund, and investigate the total accrual of the Fund, and referred same to the House Committee on Nigerian Content Development and Monitoring to, amongst other resolutions, investigate and urge the NIMASA to immediately stop the planned disbursement of $700 million to Nigerian citizens and companies and to lay before the floor of the House, an audited statement of account showing all monies that have accrued to the Cabotage Vessel Finance Fund not later than 14 days from the date of this resolution.
According to him, the Committee during the investigation requested NIMASA and the Ministry of Transportation to provide detailed information on the total amount accrued to the Fund and disbursements since inception.
“The Committee met with the Minister of Transportation and the Director-General of the NIMASA on Thursday, 11 May, 2023 to find out about the details concerning the matter. After a thorough analysis of the various submissions on the matter coupled with the explanations given by the Ministry and NIMASA, the Committee discovered that due process was followed in the planned disbursement of the Cabotage Vessel Finance Fund.
“The Committee notes that the Cabotage Vessel Finance Fund (CVFF) is a fund that was set up in 2003 by the Coastal and Inland Shipping Act. The Fund was established for the purpose of developing indigenous ship acquisition capacity, and to provide financial assistance to indigenous shipping operators.
“The Committee further notes that there is a lack of Capacity amongst indigenous/ Domestic Coastal operators in Nigeria, thus the reason Nigerian National Petroleum Corporation Limited (NNPC) still awards contracts to foreign shipping Companies in contravention of the Cabotage and Nigerian Oil and Gas Industry Content Development (NOGICD) Act. Some of these awards have been previously investigated by the Committee which led to their cancellation.
It was also discovered that the total funds of $360 million in the Cabotage Vessel Finance Fund (CVFF) account with the Central Bank of Nigeria (CBN) represents 50%, while the remaining counterpart funds of 50% is from stakeholders and Banks which is 15% and 35% respectively.”
Hence in its recommendations, the Committee mandated NIMASA to “go ahead with the disbursement of the Cabotage Vessel Finance Fund (CVFF) in compliance with the extant laws and laid down guidelines for the said disbursement.
“To ensure the disbursement does not violate any of the extant laws made by the National Assembly, the following persons were nominated to supervise the disbursement process: Hon. (Barr.) Legor Idagbo, Chairman; Hon. Henry Nwawuba as Member and Mrs. Kehinde Bolade Olaiya – Committee Clerk.
The Committee also resolved to appoint an Audit firm – Stratford Hill and Co. as the coordinating enforcement auditor for the CVFF.
Pleased by the outcome of the engagement with relevant stakeholders, the Committee applauded NNPC for its commitment to awarding the shipping contracts to indigenous companies that have built capacity to the level where they can successfully execute these contracts.
He also applauded NNPCL management for its commitment to the agreement to cancel the contracts and still award them to Nigerian Indigenous Ship Owners.
According to him, “we advised the ship owners to get MoU with the foreign companies so that when they are beneficiaries of the contracts, they can liaise with the foreign companies to bridge that capacity gap and enable them still deliver.
“Even that has its challenges, we agreed that’s why it’s important that this CVFF is immediately disbursed to Nigerian Ship Owners. The whole essence is that the beneficiaries will show that they have capacity, they will provide 15% of the said fund, the banks will provide 35% of the fund and Government will provide 50% of the fund.
“The fund is to enable them procure ships and get themselves ready to benefit directly from these contracts that will be given by NNPC. And I’m happy that NNPC is committed that once this capacity is developed, they’ll indeed award these contracts to them,” Hon. Idagbo noted.
