Ship owners Reject 8.5% Interest Rate On CVFF

By Joy Enamuna

The Long awaited disbursement of Cabotage Vessel Finance Fund (CVFF) will soon be a thing of the past in the next couple of weeks as Federal Government is working on reducing the 8.5% rejected by Nigeria Ship Owners to it bearest Minimum.

The Director General of Nigerian Maritime Administration and Safety Agency (NIMASA)
NIMASA, Dr. Bashir Jamoh OFR, who disclosed this to journalists at the agency’s headquarters in Apapa, Lagos shortly after receiving a delegation from Ghana Maritime Authority (GMA) who was a study tour of Nigeria’s Cabotage regime.

The DG further explained that the Designated Primary Lending Institutions (PLIs) which are to provide 35 percent of the equity pegged the interest at 8.5 percent while ship-owners are demanding a much lower rate as the NIMASA explores alternatives to attain lower interest rates.

Jamoh who is working tiredlesly to ensure it done within the next three weeks said “I’m not in a position to say whether the disbursement of CVFF will take place under this regime or not, because we are still discussing with the PLIs. It is only when we are sure that we are getting the best deal to help the stakeholders that we would accept the terms for disbursement. We wouldn’t succumb to a situation where the PLIs will be imposing unnecessary guidelines or interest rates. The interest rate for CVFF disbursement is the core issue we are looking at presently.”

“15 percent of the fund is coming from stakeholders, 50 percent is from the government and the PLIs are providing only 35 percent. So, the PLIs shouldn’t be imposing high interest rates when they are only bringing 35 percent”.

“We are also engaging other development banks to see how low their interest rates will be so that we can compare with other banks. Our guidelines specified commercial banks and not development banks; but we are consulting to enable us do peer review of the interests.”

According to him ““Initially, we wanted single digit and we got single digit with 8.5 percent but we are asking them to go down in view of stakeholders position,” he explained.
Jamoh, however, expressed optimism that the amended version of the Cabotage Act will be passed before the end of the President Muhammadu Buhari administration.

“We have been implementing the Cabotage Act for about 20 years and the amendment should reflect a lot of changes and developments in the industry. We have encountered a lot of bottlenecks in the implementation of the Cabotage Act which have led to the amendment
Speaking on the Ghanaian attempt to implement its Cabotage law, Jamoh recalled that the former Director-General of the Ghana Maritime Authority, Kwame Owusu conceived the idea while at NIMASA for a strategic meeting years ago.

The Director, Legal/ Board Secretary of Ghana Maritime Authority (GMA), Mrs. Patience Diaba expressing satisfaction and gratitude over the worm reception and the opportunity to learn from the Nigerian experience in the implementation of the Cabotage law, said that “Ghana is privileged to have an opportunity to learn from the experience of Nigeria’ Cabotage rigime”.

Diaba who was very optimistic that Ghana will lean so much said “We appreciate the time and efforts of the NIMASA team who will be sharing their insights and expertise with us over the next few days. We look forward to a fruitful discussion and site visits, especially the visit to Port Harcourt and other activities that have been planned for us.”

“We are confident that our time will be rewarding and we will return to Ghana better informed and equipped to implement the Cabotage regime in our nation. We are excited to begin this 10-days study tour,” she posited.
Speaking earlier, the Executive Director, Maritime Labour and Cabotage Services, NIMASA, Engr. Victor Ochei observed that Nigeria’s Cabotage achievements did not come without pitfalls and struggles that were surmounted through consistency.

“Our achievements, processes, knowledge acquired and experience are what will be sharing with you within this short period of time. Luckily, you will be gaining these set of skills without the inclusion of the pitfalls we had to learn from to attain our current level.”

Earlier in his speech the Executive Director, Maritime Labour and Cabotage Services, NIMASA, Engr. Victor Ochei elaborated on how consistent the agency kept pushing, adding that Nigeria’s Cabotage achievements did not come without pitfalls and struggles that were surmounted through consistency

“In the course of this under-study, we chronologically intend to take you on a historical sojourn and enlighten you on our famous ‘4 Pillars of Cabotage. We shall put you through the enabling legislations and instruments that empowers us to operate as well as our enforcement procedures amongst others,”

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