Nigeria's maritime funds hit N8 billion
By David Ogah, Snr. Maritime Correspondent YEARS after the establishment of two maritime funds by the Federal Government, sensibly to empower indigenous ship owners in the acquisition of ships, the funds have grown to about N8 billion. Ironically, the funds are currently lying in the various local and foreign banks, away from the reach of would-be beneficiaries, due largely to lack of policy framework and guidelines for assessment of the funds. The funds tagged ship acquisition and ship building fund; and the cabotage vessel financing fund, were established in 1987 and 2003 respectively to assist Nigerian shipping operators in their quest for capacity building and ship acquisition. While the ship acquisition and ship building fund (SASBF) has N6.7 billion in dormant accounts with four indigenous and one foreign bank, the Cabotage Vessels Financing Fund (CVFF) has over N1 billion lodged in a local bank. The over N1 billion was deposited in a commercial bank at different times in different accounts. Authoritative sources said N42.9 million of the total deposit figure with the bank was in eminent account, while $51.000 was kept in domiciliary account, N160.8 million in fixed deposit account and $8.2 million has been lodged in fixed deposit account with the bank. The SASBF accounts are in local and foreign banks including Backleys Bank of London. The accounts have over $46 million and �1.963,992.44 although it was not immediately clear the exact time the deposit were made. All the deposits were made by the Nigerian Maritime Administration and Safety Agency, which also has over N563.9 million in fixed deposit accounts with some other local banks. The money meant for the disbursement to NIMASA workers as staff housing loan was kept in different banks for a period ranging from 30 to 90 days and at the interest rate of between 13 and 14 per cent. There has been clamour from some quarters to use the Agency's idle funds in banks for capital and recurrent programme or to invest them in short term placement in move secured banks with special programmes and support for the indigenous ship owners who are itching to boost ship ownership capacity. Those who clamoured for the use of the fund for the purpose, for which it was established, also suggested that the relationship with the banks keeping the funds could be terminated for transfer to the Central Bank or to be merged with the Federation accounts. The N1.3 billion CVFF was part of the N3.2 billion set aside, by the Federal Government for disbursement to indigenous ship owners in order to promote indigenous capacity building in the nations maritime industry. The Guardian recently reported exclusively that government has released guidelines for the operation of the special fund. The fund, which ought to have been established three years ago when the government started the implementation of the Inland and Coastal Shipping (cabotage) Act came into effect few days ago in Abuja where conditions were spelt out for intended beneficiaries. The guidelines for the fund's operation that released by the Minister of State for Transportation, Mallam Aliyu Mohammed indicated that it would be managed by primary lending institutions to be published soon by the Nigerian Maritime Administration and Safety Agency (NIMASA). From all indication, NIMASA would not be involved in the fund management apparently to avoid a recurrence of what happened 10 years ago when many Nigerian ship owners benefited from a similar scheme and refused to pay back. The fund was poorly handled and till date many of the beneficiaries have not paid back because no security was involved at the time the loans were disbursed. Although, government could not give out the details of the fund's operation, The Guardian gathered that intended beneficiaries would need to first apply to the primary lending institution, which should normally be banks that have banking relationship with NIMASA. Besides applying to PLI, each of the beneficiary would need to tie their loan application to a maritime project for which he must provide 15 per cent of the project cost having been pre-qualified by NIMASA that would be made to guarantee repayment. According to the guidelines, PLI would prepare a bankable and feasibility report of the project. The report would be subjected to NIMASA verification. The minister said only Nigerians citizens or firms belonging to Nigerians would benefit from the loan scheme. They would need to show evidence of managerial ability and acceptable equity in the project in the case of joint venture project. He said all agreement under the fund would be signed with the primary tender even when parties to the fund would include NIMASA, Federal Ministry of Transportation and the applicants. The success of the fund, he said, would depend on PLI. According to him, NIMASA would soon publish qualification criteria for the banks to ensure that only banks with enough capacity and competence are involved in the scheme. Section 42 of the 2003 coastal and Inland Shipping Act made it mandatory for the Nigerian Maritime Administration and Safety Agency formerly National Maritime Authority (NMA) to establish a fund to be known as cabotage vessel finance fund to promote the development of indigenous ship acquisition capacity by providing financial assistance to Nigerian operators in the domestic coastal shipping. The ship acquisition and ship building fund was suspended about 7 years ago when beneficiaries who obtained a whooping $100 million loan from the fund failed to pay back. Some of the beneficiaries had argued that the loan was to paltry for them to acquire new vessels while others said they actually procure vessels, but some of them either sank in the seas or could not be maintained. | 
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