…Says NIMASA determined to get interest rate below 8.5% PLIs are offering
…As Ghana Maritime Authority understudies Nigeria’s Cabotage regime
The Director General of Nigerian Maritime Administration and Safety Agency (NIMASA), Dr Bashir Jamoh has disclosed that the plan of the Federal Government through the agency to disburse the Cabotage Vessel Finance Fund (CVFF) to the benefiting indigenous shipowners before May 29 has received over 85 per cent of work.
Jamoh spoke Tuesday in Lagos when he received a team of officials of the Ghana Maritime Authority (GMA) who was in Nigeria to understudy the Nigeria’s Cabotage regime for adoption by Ghana.
He, however, disclosed that the progress of work on disbursement of the fund has been temporarily stalled by the five commercial banks penciled down as the Primary Lending Institutions (PLIs) insist on 8.5 per cent interest rate on the proposed loans to ship owners. He said the agency will not accept the imposition of an unnecessary high interest rate by the PLIs on ship owners.
The five banks approved as primary lenders include Jaiz Bank, United Bank for Africa (UBA), Union Bank, Zenith Bank and Polaris Bank.
According to the CVFF guidelines, the PLIs will provide an equity contribution of 35 per cent, the ship owners will provide 15 per cent, while 50 per cent will be provided by the Federal Government through NIMASA.
According to the NIMASA DG, the Agency is currently looking in the direction of Development Banks as alternatives to the PLIs with the view of securing interest rates lower than the 8.5 per cent being offered by the five commercial banks, otherwise called PLIs.
He said, “We are still discussing back and forth with the PLIs and unless we are sure we are getting the best deal that can help the stakeholders, we will never accept any PLI imposing unnecessary guidelines or interest rates. These are the core issues that we are dealing with. If we complete the issue of those grey areas then we will disburse the fund before the end of the regime and if we don’t finish when the new regime comes, we will continue and they will advise us on the way forward but we don’t want to put any liability on the stakeholders or government.
“We must get the best bargain for the stakeholders. We can’t accept any interest rate that will remain a burden for the stakeholders. 15 per cent of the fund is coming from the ship owners, 50 per cent is coming from the government so if PLIs are to provide just 35 per cent they can’t come and impose high interest rate on the stakeholders. This is one of the major grey areas why we are going back and forth.
“We are making contacts from other development banks to see how much they can give. We will now put it on the table. Even though the PLIs from our guidelines are commercial banks but development banks are banks that can provide funding so we are consulting other banks to do peer review.
“For instance, last week, we reached certain milestones and had discussions with some of the stakeholders and the stakeholders think the interest rate is still high so we are going back to the drawing table to make sure that the interest rate we are accepting will favour all the stakeholders.
“So, the interest rate is what is stalling disbursement. The last time it was 8.5 per cent but we still want it to go down, we want single digit and we are asking them to go down again,” he said.
Meanwhile, Dr Jamoh has disclosed that the amended Cabotage Act will be assented to by President Muhammadu Buhari administration before the end of his administration. He assured that the amendment would not affect the disbursement of the Cabotage fund.
“The amendment of the Cabotage Act has nothing to do with the disbursement. They are all different matters. We have been implementing the Act for the past 20 years, so a lot of things came to limelight. In the course of implementing policies you find a lot of bottlenecks where you have to get something done to have an easy process of implementation. So that is the amendment. The core basis of the Cabotage Act still remains where it is,” he said.
He commended the visiting Ghana Maritime Authority officials for coming to tap from the Nigerian experience in Cabotage implementation, even as he recalled that the former Director-General of the Ghana Maritime Authority, Kwame Owusu conceived the idea of starting the Ghanaian Cabotage regime while at NIMASA for a strategic meeting years ago.
According to him, the opportunity to collaborate and partner with GMA would lead to growth and development in the maritime sector for Nigeria and Ghana, even as it strengthens partnership within the Gulf of Guinea.
Speaking earlier, the Director, Legal/ Board Secretary of the Ghana Maritime Authority, Mrs. Patience Diaba who led the team said that they are in Nigeria to learn from its experience in the implementation of its Cabotage Act.
Diaba said lessons learned would help Ghana in the effective implementation of its Cabotage regime and avoid challenges that affected Nigeria in the implementation of its Cabotage regime.
“We are here because we are about to implement our own Cabotage regulations. It is better to learn first-hand these challenges Nigeria went through so that we don’t need to go through the same, coming here the first thing to learn is the challenges and how we won’t fall into the dangers.
“If we start like that, we will go faster than Nigeria because Nigeria has to do a lot of learning along the line but we are fortunate that we will hear from them what went wrong and how to get out of it and mechanisms put in place when we do that.
“We are confident that our time will be rewarding and we will return to Ghana better informed and equipped to implement the Cabotage regime in our nation.” she said.