Nigerian shipowners have been advised to look beyond the Cabotage Vessel Financing Funding (CVFF) for their ship financing needs and other fiscal support in 2025 as there are no indications that the fund will be disbursed anytime soon.
A veteran maritime lawyer and Principal Partner, Akabogu & Associates, Dr. Emeka Akabogu, gave this advice while speaking at a webinar on Nigerian maritime industry outlook 2025, organised by Akabogu Law and Riverlake Nigeria Limited, last week.
News Diet recalls that in the first quarter of 2024 the disbursement of CVFF stalled by a one percent difference in the interest rates as the approved banks insisted on 7.5 percent interest while the Nigerian Maritime Administration and Safety Agency (NIMASA) pushed for 6.5 percent.
The distinguished lawyer and author, Dr. Akabogu, stressed that there has been no indication either via political will or strategic banking plans from the custodians of the CVFF to inspire hope for disbursement in 2025.
He, however, noted that Nigerian shipowners could explore the shipping opportunities under the African Continental Free Trade Area (AfCFTA) to source international and regional sources for ship financing instead of relying on the Cabotage Vessel Financing Fund.
Akabogu, who is also the convener of the annual Oil Trading Logistics (OTL) Africa Downstream Energy Week, noted that Nigerian financial institutions remain unable to provide single digit interest financing required for huge investments in shipping.
Meanwhile, he expressed optimism that the Nigerian Shipping and Ports Economic Regulatory Agency (NPERA) bill could be signed into law in few weeks to provide a better regulatory framework for economic activities at the nation’s seaports.
On his part, the Managing Director of Riverlake Nigeria Limited, Mr. Bello Tukur, described 2025 as a year of opportunities for shipowners who have made right investments as he pointed to Dangote refinery and regional shipping trade under AfCFTA as huge opportunities.
Tukur, however, opined that Nigerian shipowners would need to ensure their vessels meet the stringent requirements for participating in these shipping opportunities.
According to him, in 2024 the persistent hike in foreign exchange significantly affected the business of shipping as repairs, ship parts, maintenance and other operating expenses (OPEX) were more expensive leading to fewer profit margins for operators.
Speaking with News Diet, the President of Ship Owners Association of Nigeria (SOAN), Mr. Sonny Eja, advised the Ministry of Marine and Blue Economy and NIMASA to study the model deployed by the Nigerian Content Development and Monitoring Board (NCDMB) for its NCI fund.
Eja posited NCDMB has been very successful in managing and disbursing the NCI fund which is similar to the CVFF arrangement.
The Nigerian Content Intervention (NCI) Fund is a fund managed by the Bank of Industry (BOI) on behalf of the NCDMB. The fund’s purpose is to increase local participation in the oil and gas industry.
