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NIMASA kick starts process for CVFF disbursement.

Eyewitness reporter


The indigenous ship owners may soon have a cause to smile as the Nigerian Maritime Administration and Safety Agency (NIMASA) may have commenced the process for the disbursement of Cabotage Vessels Financing Funds(CVFF) 15 year after it was established.

It  would be recalled that the CVVF is an off- shoot of Cabotage Law of 2003.
It is the two percent deductions from the Cabotage contracts by indigenous operators lodged into a dedicated accounts under the CVFF.
The Funds, created in 2006, and which accruals have been a subject of wild speculations and controvesy, was said to have hit about $200m as at January ,2020.
However, despite several promises by successive NIMASA administrations to disburse the funds, no indigenous operators has so far benefited from the funds as NIMASA has observed its promise for disbursement in the breach.
However, following the approval by President Mohammadu Buhari, which was allegedly secured by the Minister of Transportation, Rotimi Ameachi, NIMASA has  called for Expression of Interest (EoI) from banks to act as Primary Lending Institutions( PLI)  for the disbursement of the fund.
It was gathered that the agency said it received the go ahead from its supervising Minister, Rotimi Amaechi, to disburse the funds to qualified indigenous maritime operators in line with the Treasury Single Account (TSA) policy and the CVFF Guidelines  of 2006.
According to a document marked “Implementation and Disbursement of the Cabotage Vessel Financing Fund (CVFF): Expression of Interest as Primary Lending Institution” and signed by Chudi Offodile, Executive Director, Finance and Administration of NIMASA, the Fund would promote the development of indigenous ship acquisition capacity by providing financial assistance to Nigerian operators in domestic coastal shipping.
In the document, Offodile said the request for the primary lending institution is in line with the Federal Ministry of Transportation guidelines for the implementation of the Cabotage Vessel Financing Fund (CVFF) 2006, which specified the minimum requirement for the participation of banks as Primary Lending institutions (PLIs).

The document  listed the requirements to include that the PLI must have an existing relationship with NIMASA; have shareholders fund over N25 billion, and must have proof of substantial financial support in terms of credits extended to indigenous maritime operators.

Offodile, in the said document,  pointed out  that the PLI will be responsible for liaising with NIMASA in determining the risk acceptance criteria for the utilisation of the Cabotage Vessel Financing Fund or issuing of guarantees.

“PLI will participate in financing and management of specific projects where necessary to further secure repayment of the loan or obligation; be actively involved in on-lending monitoring and entire loan management, and any other financial advisory or ancillary services as the Fund may determine,”Offodile further stated that the bank shall because of the Treasury Single Account policy of the Federal Government, also be prepared to open a dedicated account for each applicant who shall deposit a minimum of 15 percent of the loan request (sum applied for into the account); be committed to contributing between 10 – 35 percent of the loan request and also commit to a cumulative single digit interest rate.

“On approval of the loan request by the Minister of Transportation, NIMASA shall transfer its portion of the loan request into the dedicated account”, he noted.

The eventual disbursement of the fund will bring to an end the wild goose chase by the hapless indigenous operators who have become weary of long wait for the fund meant to empower them to carry out cabotage trade in the country.
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Marine insurers express frustration, confusion over loosely -worded EU sanctions on Russia.

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Fidelity Bank boosts local rice production with N34bn

Mrs. Nneka Onyeali-Ikpe, Managing Director/CEO, Fidelity Bank Plc,

Fidelity Bank has facilitated the disbursement of over N34 Billion in direct credit to players in the Nigerian rice value chain.

The bank’s interventions in recent years have helped to unlock spontaneous financing opportunities for a large swathe of paddy rice farmers with significant contributions to the expansion of national paddy rice output.

Only recently, the bank part-financed the construction of a 400 metric tons per day mega rice mill in Kano state owned by the Gerawa Group of Companies.

Commenting on the development, Mrs. Nneka Onyeali-Ikpe, Managing Director/CEO, Fidelity Bank Plc, said, “Through our interventions in the rice space, we have created a positive impact in rural communities by way of farmer empowerment and employment generation. This is also in alignment with the business sustainability imperative of our banking business.”

Shedding light on the bank’s activities further down the value chain, Mrs. Onyeali-Ikpe stated that the bank directly financed the construction and installation of several integrated rice mills across different geo-political zones in Nigeria. These rice mills have a combined rice milling capacity in excess of 500,000 MT per annum.

Recognizing the importance of the last mile traders in the value chain, she noted, “We have also provided low-cost funds to rice traders to purchase rice from indigenous rice millers for sale to the final consumers. This has helped in stabilizing the prices of locally produced rice.”

Whilst stressing the importance of imbibing sustainability practices, Mrs. Onyeali-Ikpe points out that the bank has modeled effective social and environmental sustainability frameworks into its agribusiness deal structuring workflow to address social and environmental sustainability requirements.

This, she said, follows the CBN’s Sustainable Banking Principles and Sector Guideline, IFC Performance Standards and Equator Principles.

The bank’s activities have continued to receive recognition by operators, funding partners and all other actors in the agribusiness space.

At the Bankers’ Committee meeting of December 2019, for instance, Fidelity Bank was awarded 2nd position in Sustainable Agriculture Transaction of the year.

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Stakeholders express concerns over continued closure of land borders

President Buhari
—- say action hurting economy
Agitated stakeholders in the maritime industry have expressed concern over the continued closure of some border stations in the country.
According to them, this action is already affecting the ease of doing business in the country, as many enterprises have shut down, throwing thousands of people out of jobs.
It could be recalled that while the Seme border has reopened, the Idiroko border is yet to be opened, among others land borders that were opened by the Federal government after the prolonged closure.
However, the disturbed stakeholders believed that the border closure has not achieved its aim, especially, as the rate of smuggling of prohibited items has increased, unlike when the border was open.

They argued that the Federal Government only opened its borders with Benin, Cameroun, Chad and Niger in December 2020 for the movement of people while the movement of goods remained blocked.

The stakeholders warned that if the borders are not fully opened, the economy would be negatively affected with impacts on the Africa Continental Free Trade Agreement (AfCFTA) as many African countries may blacklist Nigeria this year 2022.

President of the Association of National Licensed Customs Agents (ANLCA), Tony Nwabunike, said more than 3,000 businesses have closed, with over 300,000 jobs lost due to the closure of some land borders to trading activities.

According to him, the reduction in trans-border trade contributes to the weakness of the naira.

Nwabunike claimed that keeping the borders closed where there are no security issues is a sign of non-compliance with the Economic Community of West African Countries (ECOWAS) and African Continental Free Trade Area (AfCFTA) treaties, of which Nigeria is a signatory.

“And as a country, we should not be signing treaties and agreements we won’t comply with, because compliance concerns all of us.

“Nigeria, her agencies and private business operators all have a responsibility to be compliant. Let us all build a culture of National integrity on all fronts at home and in the eyes of the global trading community,” he said.

The ANLCA president urged the Federal Government to reopen all approved borders, particularly, in the Southwest and other areas with less threat of insurgency, to allow trading activities to resume with its accompanying benefits of economic growth and job creation.

A lecturer at the Nigeria Maritime University (NMU), Okerenkoko, Charles Okorefe, said while Nigeria continues to shut its borders to trading activities, the Port of Lome currently records 30 percent higher cargo throughput than Lagos ports, as investors and importers prefer to do business in other neighbouring countries.

Okorefe, who is also the author of ABC of Shipping and ports operation in Nigeria, said such imports end up in the Nigerian market despite the continued border closure, which he said has multiplied smuggling.

“This act of “protectionism” itself negates the spirit behind AfCFTA.

“So, going forward for 2022 and to enhance our presence in the comity of African trading nations, the Federal Government must eat the humble pie by reopening our closed borders. It is hurting our economy,” he said.
A maritime consultant, Olayemi Abass, pointed out that while the government’s prime targets were agricultural produce, finished goods and petroleum products, there is no data to support that the border closure has helped the local industries, especially in terms of import substitution.

“We cannot continue to take extreme measures, which hurt genuine businessmen and run counter to the letter and spirit of treaties and agreements signed by Nigeria.

“There is a need for concrete inter-agency dialogue with the Organised Private Sector to have a short, medium and long term plan to ensure proper cross border trade facilitation, which will engender security of life and property, improve the ease of doing business and our economy,” he stated.

A former Assistant Controller General of the Nigeria Customs Service (NCS), Baritor Kpagih, said the border closure has been counter-productive to its aim, especially, as smuggling still persists in Nigeria despite the presence of customs officials.

He said the Benin Republic records a high import volume of parboiled rice cargoes, which are sent to Nigeria for consumption.

He questioned why the 41 import prohibited items flood the Nigerian market despite the presence of the special border patrol.

Kpagih stressed that the border closure is contrary to the ECOWAS trade law and could hurt Nigeria in AfCFTA, suggesting that there should be an urgent reopening of the closure, which has outlived its usefulness.

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