House Makes U-Turn, Backs Planned Disbursement of $700M Cabotage Vessel Finance Fund

Fri Jun 2nd, 2023 -

The House of Representatives has backed the planned disbursement of $700 million in the Cabotage Vessel Finance Fund to Nigerian shippers.

The move followed the report presented by the House Committee on Nigerian Content Development and Monitoring.

Recall that the house had in a motion moved by Henry Nwawuba (APGA, Imo) during plenary earlier May, called for the suspension of the disbursement of the fund pending the outcome of House investigation.

The Cabotage Vessel Finance Fund was established by the Coastal and Inland Shipping (Cabotage) Act, 2003 to promote the development of indigenous ship acquisition capacity by providing financial assistance to Nigerian operators in domestic coastal shipping.

The Cabotage Act provides that two per cent of the contract sum performed by any vessel engaged in Cabotage trade shall be paid into the CVFF for the development of domestic coastal shippers.

In his motion, Nwawuba informed his colleagues that the federal government is planning to disburse $700 million from the funds to Nigerian shippers but that the lawmakers have no details of the total accruals into the fund.

He stated that there has been no reliable data on the inflow into the fund since the Act came into being in 2003, while also alleging that the ministry of transportation and Nigerian Maritime Administration and Safety Agency (NIMASA) has misappropriated the fund.

But briefing newsmen at the National Assembly in Abuja on Thursday, Legor Idagbo, the chairman of the Committee
said view of the findings during the investigation, the Committee made the recommendations that NIMASA should go ahead with the disbursement of CVFF.

This according to him is in compliance with the extant laws and laid down guidelines for the said disbursement.

He said it was also to ensure the disbursement did not violate any of the extant laws made by the National Assembly.

He said the following persons were nominated to supervise the disbursement process: Rep Idagbo as the Chairman, Rep. Henry Nwawuba and Mrs Kehinde Olaiya, the Committee Clerk

He said an audit firm Stratford hill and Co was appointed by the committee as the coordinating enforcement auditor for the CVFF.

He added that the committee applauded NNPC for its commitment to awarding the shipping contracts to indigenous companies that had built capacity to the level where they could successfully execute the contracts.

He said the committee further noted that there was lack of capacity amongst indigenous and Domestic Coastal operators in Nigeria.

According to him, that was the reason NNPC still awarded contracts to foreign shipping companies in contravention of the Cabotage and Nigerian Oil and Gas Industry Content Development (NOGICD) Act.

He said some of the awards had been previously investigated by the committee which led to their cancellation.

“It was also discovered that the total funds of $360m in the CVFF account with the Central Bank of Nigeria (CBN) represent 50 per cent

He said the remaining counterpart funds of 50 per cent came from stakeholders and Banks which is 15 per cent and 35 per cent respectively.




source: Guardian