The Federal Government of Nigeria is preparing to commence disbursement of the long-delayed Cabotage Vessel Financing Fund (CVFF) to qualified Nigerian shipowners, with successful applicants able to access up to $25 million each for vessel acquisition and business expansion.

Minister of Marine and Blue Economy, Adegboyega Oyetola, disclosed the development on Monday, stating that the initiative would increase indigenous participation in Nigeria’s maritime industry and support the creation of more than 30,000 direct and indirect jobs.

Established under the Coastal and Inland Shipping (Cabotage) Act of 2003, the CVFF was designed to help Nigerian shipping companies acquire vessels and develop indigenous capacity. Despite its establishment more than two decades ago, the fund has remained largely undisbursed.

According to Oyetola, the government is now working to unlock the fund and tackle a major constraint confronting Nigerian-owned shipping businesses: limited access to affordable, long-term financing.

“After more than 20 years, we are finally moving to unlock the Cabotage Vessel Financing Fund (CVFF) for Nigerian shipowners,” the minister said.

Under the financing arrangement, successful applicants will be eligible to obtain up to $25 million, subject to the applicable assessment and approval process.

Oyetola explained that access to low-interest financing would give Nigerian shipowners the opportunity to purchase modern vessels, grow their fleets and compete for coastal and offshore contracts that are currently dominated by foreign operators.

He added that greater involvement by indigenous operators could generate business opportunities throughout the broader maritime value chain, including shipyards, marine engineering, vessel maintenance and maritime logistics.

The minister also revealed that the Nigerian Maritime Administration and Safety Agency (NIMASA) had received 92 applications for the financing scheme.

Of those applications, 20 had been forwarded to approved Primary Lending Institutions (PLIs), while only one application had been reviewed and subsequently forwarded for approval.

In an effort to speed up the financing process, the government has expanded the number of approved banks participating in the scheme from five to 12.

The government has also introduced the CVFF Application Portal, designed to make the application and disbursement process more transparent and accessible to eligible Nigerian shipowners.

Oyetola said he had instructed NIMASA to collaborate with the 12 participating banks to accelerate the processing of qualified applications.

For Nigerian-owned maritime businesses, the financing is expected to provide access to the capital required to acquire vessels, increase operational capacity and compete for larger contracts.

The potential benefits could also reach smaller businesses that provide services to shipping companies. Greater vessel ownership could increase demand for maintenance, repairs, logistics, marine engineering, equipment supply and other support services.

Oyetola estimated that the fund could contribute to more than 30,000 direct and indirect jobs while helping to strengthen Nigeria’s ship-owning and shipbuilding ecosystem.

Alongside the financing initiative, the minister said the government was also investing in the skills needed to sustain a growing indigenous maritime industry.

He disclosed that 222 seafarers had received free professional training, while 333 cadets had completed academic training and obtained degrees. A further 135 cadets participating in the Nigerian Seafarers Development Programme had obtained Certificates of Competency.

Additionally, 7,059 Nigerian seafarers have been placed onboard vessels to acquire sea-time experience.

Oyetola said the wider objective was to ensure that Nigerians increasingly own, operate and benefit from economic activities taking place within the country’s maritime space.

For MSMEs, the outcome of the CVFF initiative could therefore extend beyond shipowners, potentially creating new opportunities for businesses across Nigeria’s maritime supply chain.

Source: msmeafricaonline