$700m CVFF Fund: APFFLON Writes Oyetola, Calls for Verification of Credit Ratings Of Shipowners Before Disbursement

By DAPO OLAWUNI

The Africa Association of Professional Freight Forwarders and Logistics of Nigeria (APFFLON) has called on the Minister of Marine and Blue Economy, Adegboyega Oyetola to carry out thorough verification of credit ratings of Nigerian shipowners before going ahead to disburse the Cabotage Vessel Financing Fund (CVFF).

In a letter to the Minister, dated 30th April 2025, signed by President of APFFLON, Otunba Frank Ogunojemite, the association, urged the Minister to avoid the experience of the past where ship acquisition funds were mismanaged and the aim for which the funds were disbursed defeated.

Recall that Minister Oyetola had recently directed the Nigerian Maritime Administration and Safety Agency (NIMASA) to disburse the controversial CVFF Fund, to which NIMASA has assured that the fund would now be disbursed in August 2025 after years of failed attempts.

According the disbursement ratio issued by NIMASA, the agency is to provide 50% of the funding, Primary Lending Institutions contribute 35%, and shipowners provide the remaining 15% as equity.

APFFLON commended the Minister for his determination to change the face and the fortune of the marine and blue economy sector of the economy and for breaking the CVFF jinx in order to reposition the sector as number one economic enabler, a catalyst for job creation and foreign exchange earner for the country.

“However, much as we applaud you for this giant step, we equally call for caution in disbursing this fund to the beneficiaries. This is with a view to avoiding the experience of the past where funds such as this were mismanaged and the aim for which the funds were disbursed defeated.

“While we are not against the disbursement of this fund, we however, call for the verification of the ship owners who are to benefit from this fund to ensure that they are in business and viable enough to be entrusted with such an amount of money as it’s obvious some of them are out of business and some of them moribund.

“We advised that before the fund is disbursed to the beneficiaries, a committee should be set up to verify their credit ratings of the ship owners and ensure that they are not indebted to any financial institution both locally and abroad to avoid diverting the fund to loans repayment, thereby defeating the intent for which the fund was given in the first place.

“This we advised knowing that some of them had taken loans even from financial institutions abroad and if this money is disbursed to them, they may not make use of the money accordingly.

“The government should be very critical about credit ratings of each and every one of them before disbursing this money. We say this because, if you disburse the money and the expectations were not met, what then is the essence of the money being disbursed? Nothing but to add to the problem.

“You will recall, Honourable Minister, that fund such as this, codenamed Ship Acquisition and Ship Building Fund was given out to the ship owners in the past to build capacity and turn around the sector, the fund was not only mismanaged, the fund which was in the neighborhood of $2 million to $2.5 million per ship owner was diverted by some of the beneficiaries to marrying many wives and taking chieftaincy titles with nothing to show for it in the long run.

“The reason given above as well as many others informed our writing you at this auspicious moment to ensure that due diligence is done to sift the real ship owners who needed this fund to improve on their operations and those masquerading as ship owners waiting for free fund to fund their lavish lifestyle.

“We must take every necessary step this time around to get it right so that Nigeria could build enough capacity in the area of ship building and ownership and in turn, gainfully engage our teeming maritime students and graduates in profitable ventures as well as reduce the freight cost for Nigerian bound cargo.

“We also advise that even when this fund is finally disbursed, it should be closely monitored by the ministry to ensure that the fund is channeled to the aim for which it was disbursed in the first place otherwise the rationale behind its disbursement will not be achieved.

“As patriotic citizens of Nigeria, we are concerned about the experience of the Ship Acquisition and Ship Building Fund hence we wouldn’t want a repeat of the ugly experience which had taken Nigeria many years backwards in its journey to self attainment and sustenance in the area of ship ownership. We call for due diligence, proper verification of the would be beneficiaries and continuous follow up to ensure that the aim is not defeated.

“While we thank you once again for the many reforms that you are bringing to the sector, we assure you of our unwavering support as you steer the ship of the marine and blue economy sector to the promised land. We will cooperate with you in any way possible to build a maritime industry of our dreams. We want you to know that you have a trusted partner and ally in us and that you can always count on us” the letter read.