THE recent announcement by the Minister of Transportation, Honourable Rotimi Amaechi, that the presidency had suspended the planned disbursement of the N136.5bn Cabotage Vessel Financing Fund (CVFF) seems to have put Nigeria’s participation in the transportation sector of the African Continental Free Trade Area (AfCFTA) in jeopardy.
Recall that while flagging off the wreck removal exercise by the Nigerian Maritime Administration and Safety Agency (NIMASA) in Lagos, Amaechi had told bewildered guests at the event that due to lack of unity among indigenous ship-owners, President Muhammadu Buhari had suspended the planned disbursement of the CVFF fund to indigenous ship-owners. The Cabotage Vessel Financing Fund (CVFF) was established under the Cabotage and Inland Shipping (Cabotage) Act 2003, to provide finance to indigenous ship-owners to maintain their vessels or purchase new ones.
The CVFF is accumulated fund that represents a two per cent contribution by indigenous ship owners on every contract done in Nigeria’s maritime sector. The disbursement of the fund is backed by the provisions of Section 42(1)-(2) of the Cabotage Act 2003, which aims to promote the development of indigenous ship acquisition capacity by providing financial assistance to Nigerian operators in domestic coastal shipping.
Reacting to the Minister of Transportation statement that President Muhammadu Buhari has suspended the planned disbursement of the fund, Secretary-General of the African Shipowners Association (ASA), Ms Funmi Folorunso, warned that Nigeria stands to lose a lot if she goes into AfCFTA without a vibrant transportation mode.
According to the ASA Secretary-General, who also doubles as Nigeria’s Co-Champion for Transportation, “If the Honourable Minister says Mr. President has withdrawn the approval for the disbursement of the CVFF fund that is a cause of concern for me as Secretary-General of African Ship-owners Association and also as Co-Champion of AfCFTA. If the approval has truly been withdrawn by Mr. President, it means there should be a call for action among Nigerian ship-owners because such decision will affect us internationally.
“Let’s look at these from a broader perspective. The International Chamber of Shipping, which is the global body for shipping has the Nigerian Chamber of Shipping (NCS) as its representative in Nigeria. If Mr. President is saying he is withdrawing CVFF disbursement because of lack of unity among ship-owners, then it’s a call for action for the NCS and the entire shipping industry in Nigeria.
“The withdrawal of the CVFF disbursement has implications for Nigeria’s participation in AfCFTA. We must appeal to Mr. President to rescind that decision because it will affect the development of shipping in Nigeria. The CVFF is for the development of shipping in Nigeria, so if Mr. President has withdrawn its disbursement, then we need to appeal to him to rescind such decision.
“As Secretary-General of ASA, I know that such decision to withdraw disbursement of the CVFF will affect Nigeria’s participation in the AfCFTA and also affect shipping development in Nigeria. Any country without ships cannot effectively participate in maritime transportation.”
On how the withdrawal of the CVFF disbursement will affect Nigeria’s participation in AfCFTA, the ASA Secretary-General explained that, “If we do not have ships, how are we going to participate in transportation? What the National Action Committee on AfCFTA has been doing is to ensure that Nigeria has vessels to lift cargoes not only from our waters, but all over Africa.
“The landlocked countries are looking up to us to ensure that their cargo moves. ASA is currently building partnership all over Africa to ensure that Nigerian ship-owners do trade all over the continent with their vessels. So, if we don’t have ships, we cannot participate in such trade. No country can participate in maritime transportation without ships. If we don’t have ships and Nigeria becomes a transportation hub, for who? Other people’s vessels?
“I am just coming from a meeting in Kenya where we discussed how Nigerian vessels can be used for export and import purposes. If these people see reports that Nigerian ship-owners don’t have ships and that Mr. President has withdrawn disbursement approval for CVFF, they will wonder why I came to their country to solicit cargoes for Nigerian vessels. No country can participate in maritime transportation if it does not have ships.
“The Minister of Transportation statement that there are ship-owners without ships is what we will be addressing from October. It is a call for action.”
On what Nigeria stands to lose if it cannot participate effectively in maritime transportation, the ASA Secretary-General stated that, “The country will lose in so many areas like employment generation, sea time for our cadets, freight earnings losses and other multiple benefits that will be lost if Nigeria cannot effectively participate in maritime transportation.”
Also speaking on the withdrawal of the approval for disbursement of the CVFF, a former President of the Nigerian Ship-owners Association (NISA), Mallam Aminu Umar, explained that the withdrawal would have a negative effect on the development of shipping in Nigeria.
In his words, “We are talking of the contributions of indigenous ship-owners since 2007. Many of the indigenous ship-owners were looking forward to the disbursement of this fund to increase their fleet capacity. The Minister of Transportation will have to intervene again to ensure the fund is disbursed.
“If we cannot buy more vessels to increase capacity, there will be problems especially now that Nigeria has signed in to AfCFTA. With AfCFTA, there will be more inter-African trade. There will be more cargoes that will be moved from one African country to another. Without newer ships, we cannot participate in such trade.
“If we don’t have the money to invest in shipping, it will be very difficult for us to participate in AfCFTA. AfCFTA is an inter-African trade, and there will be movement of cargoes from one African country to another. The only way these cargoes will move from the coastal nations is going to be by sea.
“Don’t forget that we have Dangote Refinery coming up. We have Dangote Fertilizer coming up too. In Bonny, we have the LPG gas coming up. Some other African countries will need urea that will be produced by Dangote Fertilizer. Some African countries will need LPG gases. These are a lot of shipping activities. Are we going to stand by while foreigners cart away revenue that should accrue to Nigeria? “If the CVFF is disbursed and indigenous ship-owners renew their fleets, the country will rake in a lot of foreign exchange earnings from the expected shipping activities that will come with AfCFTA.”
