After 23 Years of Promises, Shipowners Fear CVFF Disbursement May Fail Again

More than 23 years after the establishment of the Cabotage Vessel Financing Fund (CVFF), indigenous shipowners are once again being told that disbursement is around the corner. After decades of delays and repeated assurances, many industry operators remain unconvinced.

From missed deadlines and abandoned timelines to unfulfilled commitments by successive administrations, stakeholders say they have heard similar declarations before. As a result, many are approaching the latest pledge with caution, wary that it could end up as yet another unrealised promise.

The concern comes as the Federal Government intensifies efforts to operationalise the estimated $700 million fund through the Ministry of Marine and Blue Economy, with over 60 indigenous shipping companies said to have applied through the CVFF portal launched earlier this year.

For many stakeholders, however, the issue is no longer whether government officials say the fund will be released. The bigger question is whether disbursement will actually happen this time and whether the money will get to genuine shipowners rather than politically connected individuals.

Industry operators note that nearly every administration since the enactment of the Cabotage Act in 2003 has pledged to release the fund. During the administration of former President Olusegun Obasanjo, stakeholders were assured that mechanisms were being put in place to strengthen indigenous shipping through the Cabotage regime.

Similar promises followed under Presidents Umaru Musa Yar’Adua and Goodluck Jonathan.

Under former President, Muhammadu Buhari, expectations rose several times. Former Minister of Transportation, Rotimi Amaechi, repeatedly spoke of plans to activate the fund and blamed bureaucratic obstacles involving government agencies for the delays. His successor, Mu’azu Jaji Sambo, went even further. In December 2022, Sambo announced that Buhari had approved the disbursement of the CVFF and publicly assured stakeholders that the long-awaited fund would finally be released. Despite those assurances, the money never reached beneficiaries.

That history has left many operators sceptical about the latest push by the administration of President Bola Tinubu.

“We have heard these promises before. Every few years, government announces that the CVFF will be disbursed, and the industry becomes hopeful. Then something happens and the process stalls. What shipowners want now is action, not another announcement”, a shipowner said.

While doubts persist over whether the fund will eventually be released, an even greater concern is emerging within the industry over who may ultimately benefit from it. Stakeholders warn that the success or failure of the scheme will depend largely on the quality of beneficiaries selected.

Several operators told our correspondent that the fund was created to support vessel acquisition and fleet expansion by indigenous shipping companies, not to serve as a vehicle for political patronage. A senior member of the Nigerian Indigenous Shipowners Association (NISA) said the industry would resist any attempt to allocate the fund to politicians, political associates or individuals without verifiable shipping operations.

“The CVFF was established to build indigenous shipping capacity. It was not designed as a political empowerment programme. If the money ends up in the hands of people who are not genuine shipowners, then the objective of the fund has already been defeated”, he said.

The concern is rooted in the industry’s experience with the defunct Ship Acquisition and Ship Building Fund (SASBF), introduced in the 1990s to support indigenous participation in shipping. Although the scheme was conceived to help Nigerian operators acquire vessels and expand their businesses, industry stakeholders say many beneficiaries lacked the capacity, commitment or operational background required to utilise the facility effectively.

The result was widespread loan defaults, poor recovery rates and the eventual collapse of the programme’s objectives.

Maritime stakeholders fear a similar outcome if rigorous screening is not applied to CVFF applicants. According to them, there is a significant difference between companies actively engaged in shipping operations and those that merely have maritime-related registrations without vessels, contracts or proven operational records.

A former maritime administrator warned that disbursing the fund to entities without demonstrable shipping experience could undermine the entire programme. “The purpose of the CVFF is to increase the number of vessels owned and operated by Nigerians. It is not a wealth distribution scheme,” he said.

Industry experts note that the CVFF was structured as a revolving fund, meaning its sustainability depends on beneficiaries repaying loans as agreed. Under the current framework, successful applicants can access up to $25 million at a single-digit interest rate of 6.5 per cent, with an eight-year repayment period and a two-year moratorium.

Should beneficiaries default on repayments, stakeholders warn, the fund could suffer the same fate as previous maritime intervention programmes.

The Director-General of NIMASA, Dr. Dayo Mobereola, has assured industry players that applications are undergoing detailed credit and risk assessments through approved Primary Lending Institutions to ensure only qualified applicants emerge successful.

Yet for many shipowners, confidence will only come when the money is finally disbursed and the identities of beneficiaries are made public.

After more than two decades of promises, delays and disappointments, stakeholders say the CVFF has reached a defining moment.

For them, the challenge is no longer simply releasing the fund. It is ensuring that this time the promise is fulfilled and that the money reaches genuine shipowners rather than political beneficiaries whose involvement could condemn another maritime financing initiative to failure.