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FeaturedNews
Home›Featured›CABOTAGE: POLITICS, ECLAMPSIA, CRAMPS and SPASMS

CABOTAGE: POLITICS, ECLAMPSIA, CRAMPS and SPASMS

By Editor
May 4, 2023
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As Reps Dash Hope and Dreams of Shipowners

When money is involved eyes pop, tempers flare and ears are primed as concerned parties oppose one another in the struggle to outdo, get a piece of the  pie, emasculate others, shove them aside and grab or take control of the entire chunk.

Cabotage in Nigeria cannot be discussed without reference to the Cabotage Vessel Financing Fund, CVFF. Without Cabotage there could not have been a CVFF, ironically, there is a twist in the Cabotage narrative: Is it possible for Cabotage to continue without the disbursement of sum accrued to the Fund from 2004 to date?

Savings are made as buffers to unforeseen shocks/developments. Globally, there has been economic upheavals which ship owners have been battling with pre and post covid19.

Concessions and interventions intended to keep ships afloat, seafarers engaged and the wheels of commerce turning; keeping supplies going and coming have been proffered by governments.

Disturbingly, the Nigerian Maritime industry has either been neglected or ignored for reasons advanced or facts not presented nor canvassed by maritime CEOs.

Therefrom emanates the pains, pangs, ups and downs, the excruciating eclampsia, cramps and spasms affecting operators, administrators and professionals in Nigeria’s maritime industry as politics takes centre stage.

The CVFF, described as Low Hanging fruit by the Transport Minister, Mu’azu Jaji Sambo few months after assuming duty as duty at the Federal Ministry of Transportation, FMOT.

In his comments on the CVFF, when he spoke with maritime stakeholders in Port-Harcourt, the Transport minister said “This is a Fund that was established under the Cabotage Act in order to build domestic capacity. I want to say it here that it is indeed a low hanging fruit”.

“I will do everything within my power to make sure that fund is disbursed to Nigerians as quickly as possible so that Nigerian Ship Owners can increase capacity as well as generate a welfare instead of patronizing foreign Ships and money from such business is taken out of the hands of Nigerians rendering us jobless”.

“If we get our acts right, the maritime industry can replace the revenue from the oil”, the minister said.

Unlike previous ministers, Sambo seemed more determined to empower Nigerian ship owners by effecting disbursement, alas, the House of Representative has ordered a halt notwithstanding efforts by management of the Nigerian Maritime Administration and Safety Agency, NIMASA, to ensure that the fund is disbursed at minimal interest rate to beneficiaries.

According to the Director General of NIMASA, Dr. Bashir Jamoh who spoke with journalist on the sidelines of his hosting of members of the Ghana Maritime Authority, GMA, who came to understudy Nigeria’s implementation of her Cabotage regime, discussions with the select banks are ongoing.

The banks, referred to as Primary Lending Institutions, PLIs, which include Jaiz Bank, United Bank of Africa (UBA), Union Bank, Zenith Bank and Polaris Bank have agreed to lend the CVFF at 8.5% to ship owners which NIMASA disagrees to.

“We must get the best deal for the ship owners. We can’t accept any interest rate that will be a burden to stakeholders. 15 percent of the fund is coming from the shipowners, 50 percent is coming from the government so if PLIs are to provide only 35 per cent they can’t come and impose high interest rate on the stakeholders, we will not accept that” Jamoh said

The Director, Legal and Board Secretary of Ghana Maritime Authority (GMA), Mrs. Patience Diaba who led the Ghana team said they came to Nigeria to learn from her experience in the implementation of its Cabotage Act.

“We are here because we are about to implement our own Cabotage regulations. It is better to learn first-hand the challenges Nigeria went through so that we don’t need to go through the same, If we start like that, we will go faster than Nigeria because Nigeria had to do a lot of learning to get to where they are” Diaba said.

Coincidentally, while NIMASA and GMA were brainstorming on how to achieve a boisterous, economy boosting Cabotage regime, the House of Representatives in plenary was thinking differently.

In a motion, Hon. Henry Nwawuba (APGA, Imo) informed his colleagues that the federal government is planning to disburse $700 million from the funds to Nigerian shippers without approval by the House.

According to the law maker, “The matrix, procedure and condition of the disbursement of CVFF are obscure and not transparent, and not wholly in accordance with the Coastal and Inland Shipping (Cabotage) Act, 2003.”

Hon. Nwawuba alleged “The Ministry of Transportation in collaboration with the Nigerian Maritime Administration and Safety Agency (NIMASA) has misappropriated the funds designated to promote the development of indigenous ship acquisition capacity, and the Act has not achieved its objectives,” he said.

Apart from stopping disbursement of the Fund, the House also ordered investigation to determine all monies that have accrued to the Fund since its establishment in the year 2003, and report to the House within fourteen days. The Reps also summoned the transport minister and the Director General of NIMASA to appear before its committee on local content.

Maritime stakeholder who spoke with our reporters on the development wondered if the move by members of the House is in national or personal interests.

Recall that The Coastal and Inland Shipping (CABOTAGE) Act, enacted on April 23 and subsequently assented to by former President Olusegun Obasanjo on April 30, 2003, Provides:

There is established a fund to be known as the Cabotage Vessel Financing Fund, (CVFF). The purposes of the Fund shall be to promote the development of indigenous ship acquisition capacity by providing financial assistance to Nigerian operators in the domestic coastal shipping.

There shall be paid into the Fund a surcharge of 2per centum of the contract sum performed by any vessel engaged in the coastal trade.

From 2004, when the Cabotage Act came into force to date, efforts to withdraw from the Fund to empower indigenous ship owners has met with fierce opposition from different quarters.

Ghana and indeed several African countries surely have a lot to learn from Nigeria.

 

 

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