NIMASA issues lending institutions 72hrs on procedures for disbursement of $350m, N16bn CVFF

1 week ago

By Steve Agbota, [email protected]

The Nigerian Maritime Administration and Safety Agency (NIMASA) has issued the selected Primary Lending Institutions (PLI’s) an ultimatum of 72 hours to come up with modalities needed for the disbursement of the $350 million and N16 billion Cabotage Vessel Financing Funds (CVFF).

The PLI’s, which include the Zenith bank, Polaris Bank, United Bank of Africa (UBA) Jaiz Bank  and Union Bank on Tuesday had a meeting with the management of NIMASA where issues regarding the interest rate, collaterals and requirements were discussed.

Briefing journalists after the meeting the Director General NIMASA, Dr Bashir Jamoh informed that the disbursement of the CVFF can’t start without the stakeholders engagement, which was why the agency decided to meet with the PLI’s, stating that the banks have been given 72 hours to come up with decision on the modalities required. “We can’t start disbursement without the stakeholders engagement, so the stakeholders engagement start today, we are on the track, we have started with the PLI’s  all the five of them are here today, we listened to them and they listened to us and from all indications and they are ready.

“They are set and there is bright hope, what we want them to do now is to allow them come up with collective decision and that cannot take more than 72 hours as we are leaving this boardroom they will sit down and decide on which date they will continue we dont want them to come individually with their own interest rate.

“So we want them to have a consensus and a standard template on the disbursement of funds as well as the interest rate. So this is what we advised them to do as soon as they finish that, we will then invite the shipowners,” he said.

When asked what will be the interest rate and the collaterals needed by shipowners to access the loans he said “The guidelines are what we should strictly adhere to…

“The guidelines will tell us what is the interest rate and how the interest rate supposed to be, what are the tenure, and what is the collateral, because we can’t allow them to come and make the shipowners feel very insecure.

“I mentioned to them on the issue of collateral, you have NIMASA money with you  so all these things will be deliberated among themselves. So let’s allow them to go through our guidelines seriously and see how they can adjust within themselves.

“On the issue of interest rate we are given them international currency not Nigerian currency, so they cannot start looking at Nigeria lending rate so we should look at the uniform international best practices so we are still on track because the guidelines stipulated everything”he said.

Speaking at the event the Managing Director Jaiz bank, Dr. Sirajo Salisu thanked NIMASA for having confidence in the bank, saying that the banks will do everything possible to ensure that the funds is disbursed to the the beneficiaries of the funds.

“It is really an opportunity because out of the banks operating in Nigeria now, you count a very few of us worthy and it’s something we really appreciate. We will try our very best to put something on the table. So having the commitment, we will try our best to partner with the beneficiaries or the proposed beneficiaries of these funds.

“I want to believe they are much aware that this is not a grant, this is not a money that they will just take away, this is money that is meant for a purpose and we will ensure that that purpose is achieved to the benefits of the country.

Also speaking the Director and Head of Eenterprises Polaris bank,  Femi Aribaloye, also stated that whatever that will be needed by the banks to ensure the disbursement will be carried out, will be done, he however raised concerns regarding the risks involved on the part of rhe banks

“Whatever it is that we needed to do in terms of structure and interest will be carried out, but i think the ultimate or the most important thing here is to ensure that this thing is successful and that’s why we are here  and that’s why this particular funds is now being disbursed in collaboration with the bankers.

“We are also very much aware of the environment, which we operate in, we know things can be a little bit turbulents, policies, economic situation, things might change so i just want to find out since its also within the purview of the ministry of transport, is there anything that can be done to further minimize the risk that the PLI’s are going to be carrying, when you look at the chance of possibility of a partial guarantee because as financial institutions we would like to ensure that everything is tight,” he said.

Addressing the lending banks earlier, the NIMASA DG said the issue of cabotage vessel financing fund is not the ultimate in terms of ship expansion, adding that the banks in Nigeria should be able to have a kind of complementary support to the Nigerian ship owners in terms of ship financing, not only ship financing, but also shipping  services more importantly Nigeria is now in the pool of development of sustainable blue economy.

“However, it is better late than never. We are late but we are here now doesn’t meant that we will not be able to get to where we are going. The matter before us today is the decision of the Federal Government to allow NIMASA and the Federal Ministry of Transportation to commence the disbursement of the CVFF.

“We felt that it is necessary for us to commence the stakeholders engagement with the Financial institutions first having experience that no success from the previous fund not achieved activation of the fund. At at time, the then NIMASA, the minister managed disbursement of such fund led to colossal of lost of huge amount of money.

“From 1996 that we suspended that money, we still have over eight over ship owners that are yet to pay such fund. We believe it will transfer the issues of liability and risk to professional bankers to support government in terms of insured  project management of public funds that is made for the fleet of expansion,” he said.

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