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NASS okays disbursement of $700m Cabotage vessel finance fund

The last hurdle on the way of disbursement of the $700 million Cabotage Vessels Finance Fund (CVFF), may have been removed as the Federal House of Representatives has given its nod to the Nigerian Maritime Administration and Safety Agency (NIMASA) to go ahead with its plan to disburse disburse the Cabotage vessel acquisition intervention fund to some Nigerian shipowners.

Recall that the Reps had at a sitting early last month considered a motion on the matter and subsequently directed the NIMASA to halt the planned disbursement of the fund.

The lawmakers also directed its Committee on Nigerian Content Development and Monitoring to investigate total accrual of the fund.

But briefing journalists in Abuja on Thursday, the Chairman of the committee, Hon. Legor Idagbo said that its investigations indicated that due process was followed, informing that the disbursement can now be made.

“The House of Representatives at its sitting on Tuesday, 4 May, 2023, deliberated on a motion on the Planned Disbursement of $700 Million Cabotage Vessel Finance Fund, and investigate the Total Accrual of the Fund, and referred same to the House Committee on Nigerian Content Development and Monitoring to, amongst other resolutions, investigate and urge the Nigerian Maritime Administration and Safety Agency (NIMASA) to immediately stop the planned disbursement of $700 million to Nigerian citizens and companies and to lay before the floor of the House, an audited statement of account showing all monies that have accrued to the Cabotage Vessel Finance Fund not later than fourteen (14) days from the date of this resolution.

“The Committee requested the Nigerian Maritime Administration and Safety Agency and the Ministry of Transportation to provide detailed information on the total amount accrued to the Fund and disbursements since inception.

“The Committee met with the Minister of Transportation and the Director-General of the Nigerian Maritime Administration and Safety Agency ({NIMASA) on Thursday, 11 May, 2023 to find out about the details concerning the matter.

After a thorough analysis of the various submissions on the matter coupled with the explanations given by the Ministry and NIMASA, the Committee discovered that due process was followed in the planned disbursement of the Cabotage Vessel Finance Fund.

“The Committee notes that the Cabotage Vessel Finance Fund (CVFF) is a fund that was set up in 2003 by the Coastal and Inland Shipping Act. The Fund was established for the purpose of developing indigenous ship acquisition capacity, and to provide financial assistance to indigenous shipping operators.

“The Committee further notes that there is a lack of Capacity amongst indigenous/ Domestic Coastal operators in Nigeria, thus the reason Nigerian National Petroleum Corporation Limited (NNPC) still awards contracts to foreign shipping Companies in contravention of the Cabotage and Nigerian Oil and Gas Industry Content Development (NOGICD) Act. Some of these awards have been previously investigated by the Committee which led to their cancellation.

“It was also discovered that the total funds of $360m in the Cabotage Vessel Finance Fund (CVFF) account with the Central Bank of Nigeria (CBN) represents 50 per cent, while the remaining counterpart funds of 50 per vent is from stakeholders and Banks which is 15 per vetnt and 35 per cent respectively.

“NIMASA should go ahead with the disbursement of the Cabotage Vessel Finance Fund (CVFF) in compliance with the extant laws and laid down guidelines for the said disbursement.

“To ensure the disbursement does not violate any of the extant laws made by the National Assembly, the following persons were Nominated to supervise the disbursement process:

“Rt. Hon. (Barr.) Legor Idagbo = – Chairman ii. Hon. Henry Nwawuba – Member iii. | Mrs. Kehinde Bolade Olaiya – Committee Clerk

“An Audit firm Stratford hill and Co. was appointed by the committee as the coordinating enforcement auditor for the CVFF.

“The Committee applauds NNPC for its commitment to awarding the shipping contracts to indigenous companies that have built capacity to the level where they can successfully execute these contracts.

“The Committee is grateful to the leadership of the House for the confidence bestowed on it to carry out the investigation,” he said.

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