$350Mn Cabotage Fund: A New Disbursement Guidelines

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Minister of State for Transportation, Senator Gbemi Saraki

The much a do and endless controversial Cabotage Vessel Financing Fund (CVFF) domiciled under the Nigerian Maritime Administration and Safety Agency (NIMASA) has grow to $350million in dollar components.

This is even as the Federal Government has revealed that it is working on plans to issue fresh guidelines for the disbursement of the fund to deserving shipowners in Nigeria.

At a meeting with shipowners in Lagos on Thursday, Minister of State for Transportation, Senator Gbemi Saraki have these indications, adding that it is saddening that the Cabotage law has failed to bring about meaningful changes, despite decades of being in operation.

Shipowners and Master Mariners at the meeting on Thursday

Speaking, she said “We are honored to be part of those who brought out this Cabotage Act at the National Assembly in 2007, and it is sad to see that decades later, we have not moved too far in implementation, we have not gone too far as far as the Act is concerned.

“As for the CVFF fund operated by NIMASA, the guidelines have been provided since 2007 and still, no funds have been released

“The Ministry, the National Assembly and the former DG of NIMASA had set up a Committee between NIMASA and stakeholders to revisit the guidelines.
The guidelines of 2007 does not apply today.

“I am not making any excuses because I know it doesn’t take time to come up with guidelines, however the CVFF funds with NIMASA, plus or minus is $350million.


Gbemi Saraki in a group photograph with stakeholders after the meeting.

“We all know the cost of a vessel, and the money is not enough to acquire enough vessels to make huge changes within the sector.

“That doesn’t mean we should disregard the disbursement, we are thinking outside the boxbox to see how we can start it, and we are reviewing the guidelines to ensure that the guidelines we have can be used.

“The guidelines would also be looking at what type of vessels? With due respect, 90% of you are looking for tankers for wet cargoes, we know that, and the stakeholders are always demanding ‘give us our money’ but the fact is that it is also our own (government) money, what we are looking at now is how to create a proper guidelines that would ensure that every aspect of shipping and every type of vessel would have the opportunity to draw from the funds including fishing boats and trawlers.

“I assure you that before the end of this administration, we would have the CVFF fund, as well as the National Transport Policy, and the Maritime Policy. We need to have good vessels that would make it impossible for the IOC’s to reject vessels flying the Nigerian flag” she said

Buttressing the Minister, Director General of NIMASA, Dr Bashir Jamoh said the dollar component of the CVFF has appreciated to $350million and that the Naira component has equally increased, even though he did not reveal the amount.

Jamoh stated that the agency is working on providing monetary incentives for development of shipping trade in Nigeria.

He said “The Honorable Minister is correct, we have about $350million in the CVFF account. We have the dollar component and the dollar component, if you add the Naira component, it would be above that $350million.

DG NIMASA also disclosed that the agency raked in N136 billion from the payment of the 2 per cent surcharge into the Cabotage Vessel Financing Fund (CVFF).

Recounting the partnership with a Singaporean shipping line, Pacific International Lines (PIL) on the refloating of a National Carrier for Nigeria which was championed by the former Minister of Transportation, Rotimi Amaechi, Jamoh said the fleet implementation Committee’ is working on physical incentives for development of shipping trade.

“There is no way we can develop our shipping without incentives, we have the physical and monetary incentives, we as NIMASA are working on the monetary incentives, it is left for the committee on the National Carrier which is chaired by Nigerian Shippers Council to take up the Physical incentives.

Jamoh urged the international community to cancel the war risk insurance premium placed on cargoes coming to the country, based on the recent efforts of President Muhammadu Buhari to address the security challenges in the Gulf of Guinea through the Integrated National Security and Waterways Protection Infrastructure, also known as the Deep Blue Project.

NIMASA, he said, is fully out to apprehend and sanction all defaulters that are not following the agency’s guidelines on shipping business in Nigeria.


Many of the IOCs, it was learnt, have defaulted in the payment of the 2 per cent surcharge into the CVFF, as required by law.

The NIMASA chief directed companies that have not paid the 2 per cent fund to do so in order to avoid sanction.

The CVFF account, findings revealed, comprises two components: the naira and the dollar accounts.

As at March, 2020, both accounts had N136.5 billion: the naira account had N32 billion, while the dollar account stood at $209 million.

The amount, according to NIMASA’s Executive Director in charge of Cabotage Services, Mr. Victor Ochei, is domiciled in the Treasury Single Account (TSA) of the Federal Government.

The money, he said, belongs to the Federal Government and not the indigenous operators.

He added that the government only wanted to use the money to develop local shipping company to international standard.

“On the monetary incentives, we are discussing with the Central Bank Governor, we can still get it if we have genuine records to prove that we are going to use it for the purpose it is meant for”

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