The Cabotage Vessel Financing Funds (CVFF) has become a wild card in the hand of the government which it uses at will to dribble the hapless indigenous ship owners in a game of deceit.
For about 18 years when the Cabotage Act of 2003 was promulgated and 14 years when the CVFF guidelines 2007 were issued by the Ministry of Transportation and approved by the National Assembly, the disbursement of the interventionist fund has become a rat race between the government and indigenous ship owners.
All over the world, governments seek and strive for the development of their maritime Industry either through direct intervention as the CVF was designed to be or through the creation of conducive environment to attract private participation.
It was with this mindset that the promoters of the Cabotage Act promulgated the ACT in 2003.
The ACT, akin to the Jones Act of the United States, was meant to reserve the opportunities in the coastal trade for the exclusive rights of indigenous ship owners.
To enable them to participate effectively in coastal trade, the promoters of the Act mooted an interventionist fund to be given to the operators as soft loans under the Cabotage Vessel Financing Funds (CVFF).
The fund, which is a pool of the deductions of the two percent of the contracts executed under the Cabotage trade, will be given out to qualified shipowners in a low-interest loan.
But 14 years after the fund berthed, no single operator has benefited from the fund.
Successive governments have played a game of deceit on the disbursement of the fund, making fools of the hapless indigenous operators.
Over the years, the accrued amounts of the fund from the deductions which are still ongoing despite non-disbursement, have been a subject of controversy as various, unverified figures are being churned out by the government and its agency, the Nigerian Maritime Administration and safety agency (NIMASA), thus leaving operators to make wild guesses.
The last unverified figures given out by NIMASA during the press conference to mark the one year in office of the incumbent Director-General of NIMASA, Dr. Bashir Jamoh, was $20m and N32 billion.
We call it unverified because the fund grows almost on daily basis from the two percent deductions from Cabotage contracts.
Unfortunately, the fund has been serially abused by successive governments which gleefully dip their hands into the hilt and use it for purposes other than what it was meant for.
The circus display of a game of deceit over the disbursement of the fund started during the last administration of President Good luck Jonathan when Mr. Patrick Akpobolokemi was at the helms of affairs as NIMASA DG.
The closest the indigenous operators came to getting the loans was the shortlisting of six applicants from the 100 applications for the loans.
Nothing was thereafter heard until 2015 when the Jonathan administration gave way to the present government.
It was even rumoured that the fund was depleted by the previous government in the run on to the 2015 General elections.
The game of deceit continued under the present government which even elevated the circus show into an act of mind game.
Under the present dispensation, promises of disbursement were not in short supply as the Chief Executive officers of NIMASA, starting from the erstwhile DG, Dakuku Peterside, regaled indigenous operators with his power of rhetorics to hoodwink them when he made several unfulfilled promises of disbursement.
This act of deceit continued under the present leadership of NIMASA which has continued with the same old tradition of unfulfilled promises.
Even though Dr Bashir Jamoh, the incumbent NIMASA DG, appears to be genuine in his passion to disburse the fund, but he was handicapped by the insincerity of his principals.
If the Jonathan Government was being diplomatic about its insincerity over the disbursement, the present government, who incidentally criticized its predecessor over the non-disbursement, left no one in doubt about its intention, to play to the gallery.
It was under this government that the fund was taken over and deposited into the TSA account at the Central Bank of Nigeria.
As laudable as the move was to safe guide further pilfering of the fund, the Buhari Government, through his Minister of Finance, Zainab Ahmed, said the fund belong to the Federal Government.
Despite several efforts and promises made by NIMASA and the Ministry of Transportation to disburse the fund, the Presidency inexplicably yielded to the antics of the Finance minister who curiously objected to the disbursement.
To confirm that this government never had any intention of disbursement, Rotimi Amaechi, the Minister of Transportation, told the bewildered audience at a Lagos event last week, that the President has withdrawn his earlier approval granted for disbursement, thus shattering the forlorn hope of the expectant beneficiaries.
We are as confused and bewildered as the hapless indigenous operators over the turn of events.
Two months ago, Amaechi told his audience that the fund was on the verge of disbursement when the Minister of Finance, despite the approval of Mr President and the endorsement of the Attorney General of the Federation, Abubakar Malami, protested and stalled the process.
In another breath, the President was said to have withdrawn his approval over what Amaechi called the petition letters which he alleged the indigenous operators wrote against him to Mr President.
The whole thing doesn’t add up.
It was Amaechi who advised the operators to write a letter, protesting the meddlesomeness of Ahmed Zainab who allegedly stalled the process.
We find it curious that the same operators, who should be grateful to Amaechi for fighting their battle, would now turn against him and instead of protesting against Ahmed Zainab, their common enemy, will now turn their anger against Amaechi.
The whole scenario seems illogical to discerning minds.
To us, it was giving a dog a bad name before hanging it.
The government, as the risk of being controverted, had never intended to disburse the fund, if there is still any fund to disburse.
With the legendary propensity of this government for borrowing, we may not be entirely surprised if it later turns out that this government has “borrowed” the accrued amount into the fund while playing to the gallery to buy time until more money is accrued. After all, the two percent deductions and other fees accruable to the fund are done on an almost daily basis, if not on daily basis.
If this government could deplete the pension funds through borrowing, we would not bat an eyelid if the CVFF has suffered a similar fate.
We are sad to note that the noble objectives of CVFF have been distorted and bastardized on the altar of political expediency.
The fund, which has become an object of serial abuse, has been turned into a buffer to cash back political expenses while leaving the indigenous shipping to bleed and suffer stunted growth due to mindless neglect.
Going by the guidelines set by the Ministry of Transportation and approved by the National Assembly in 2007, the hijack of the fund by the Presidency and the interference of the Minister of Finance is illegal and negates the spirit and letters of the guidelines.
Schedule 4 of the guidelines spell out the parties to the fund which include the Ministry of Transportation as the supervising Ministry, NIMASA, the Primary Lending Institutions (PLIs) and the fund applicants.
Nowhere was the presidential approval nor the inputs of the ministry of finance indicated before the fund could be disbursed.
Using the fund for purposes other than what was stated in the guidelines was not only uncharitable but criminal.
Under the purpose and beneficiaries stated in the guidelines, schedule 3.1 (financial support), it states that:
” The fund shall be utilized by the agency (NIMASA) to offer financial assistance, create access to funding by financial institutions with the sole aim of increasing retail indigenous ship acquisition capacity.
“The disbursement of the fund shall be subject to the approval of the Minister of Transportation upon recommendations by NIMASA”.
For 14 years, these objectives were met in the breach
From the foregoing, the current circus show which the present government has engaged with the CVFF disbursement is against the spirit of the ACT.
For a government that prides itself as a defender of rule of law, it should have caused the National Assembly to amend the Act before the president took over the administration of the fund.
We find as distasteful the political game to which the present government has subjected the CVFF disbursement while neglecting its critical role of intervention to empower the indigenous operators to enable them to participate effectively in coastal trade.
We urge the National Assembly to step in and stop the serial abuse of the fund and cause a forensic audit to be carried out to ascertain the level of pillage that the fund has suffered since 2007.
Ending this rat rate and political circus show over the disbursement of the CVFF, to us, will halt the gradual but steady tipping of indigenous shipping from its present precipice of disaster.
Now that Tinubu has confirmed Adeniyi as CGC
Editorial! The incursion of Chinese into Nigeria’s revenue vault.
The ubiquitous Chinese is gradually getting a foothold in the nation’s economy.
On May 30th, 2022, the controversial concession of the Nigeria Customs Service was consummated at the national headquarters of the service in Abuja.
Despite the outcry of stakeholders against the concession of the operations of the Nigeria Customs Service, the Federal Government signed a tripartite concession agreement with a Chinese company, Huawei Technologies, and their Nigerian counterparts, Trade Modernisation Project Limited with Africa Finance Corporation as the lead financiers.
The agreement was facilitated and midwifed by the Infrastructure Concession Regulatory Commission(ICRC).
The concessionaires, under the agreement, will drive the modernisation project for 20 years.
Last Monday’s consummation of the concession agreement was preceded by the approval granted by the Federal Government in September 2020 to concede the operations of the customs to concessionaires
The concession agreement, which spans a period of 20 years, will involve the modernisation of the processes and procedures of the Nigeria Customs Service, including its revenue generation which the concessionaires will take over through which they are to recoup their $3.2 billion investments.
Expectedly, the decision of the Federal government, which was clinically executed in the mould of a coup d’é tat, caught many industry stakeholders pants down.
It also generated animated discussion as the approval and eventual concession was granted in defiance to the popular wish of the operators.
Since 2019, when the industry got wind of this concession deal before the 2020 approval, there has been concerted opposition mounted by the aghast operators who felt the move was an attempt to give away our common patrimony to the foreign interests.
Then, Hon. Jerry Alagbaso, a former Customs chief and erstwhile member of the House of Representatives, rallied the National Assembly against the move.
But to the chagrin of everyone, the Federal government pulled a fast one on all the antagonists of the project.
We are less disconcerted over this concession deal which we believe was willing away the nation’s cash cow for 20 years to the foreign imperialists and their local collaborators.
We are at a loss on which powerful forces could have forced the hands of the Federal government to enter into this type of deal against the popular counsel of knowledgeable stakeholders.
Modernisation of Customs, they said.
What is there to modernise in the processes and procedures of the Nigeria Customs Service?
At the risk of being controverted, we dare say the Nigeria Customs has the most advanced form of automation process among the government agencies in the industry and one of the most automated in Africa.
The Secretary-General of the African Continental Free Trade Area (AfCFTA), Wamkele Mene said as much when he visited Apapa Customs command last week.
Mr. Mene said Nigeria Customs has the most advanced and comprehensive automation programme among its peers in Africa.
The only challenge which the service has is human.
Some of the men and officers of the service are clearly aversed to full automation due to their selfish and pecuniary interests.
The automation process will eliminate human contacts which is the avenue for extortion and exploitation.
Since 2003, Nigeria Customs has gone through a series of automation processes that have made its processes and procedures seamless.
The Automated System for Customs Data (ASYCUDA) and its advanced form of ASYCUDA+, ASYCUDA++, the Nigeria Customs Integrated System (NCIS1 &11), and Pre-Arrival Assessment Report (PAAR) are some of the automation platforms created by the customs management over the years to make customs operations seamless.
Even, in 2013, the Service developed a web-based application to provide information and guidelines for international trade business processors, export and transit trade which is called Nigeria trade Portal which is interactive.
To our mind, what the service needs is to upgrade these automated platforms, and integrate them with other players in the cargo documentation and clearance chains under the neglected single window project.
With adequate capital outlay, we believe Nigeria Customs can achieve full automation status without the involvement of foreign economic imperialists, aided and abetted by their avaricious local collaborators.
The anti- automation officers, who are averred to technology due to their selfish interests, could be reformed.
If they are adamant, they could be shipped out.
Cargo scanning could be emphasised while physical examination of cargoes could be sparingly used.
With these and all other automation platforms well integrated into the single-window under the supervision of a willing Customs administration, the Nigeria Customs will be a world-class agency.
We are however least surprised at the tenacity of these economic vultures in their quest to lay hands on the Nigeria Customs Service, which is gradually emerging as the cash cow of the nation.
Apart from oil, maritime is the second-highest revenue earner for the country and Nigeria Customs plays a key role in this regard.
With the yearly earnings in the excess of a conservative estimate of trillions of naira and the capacity to do more, as well as the dwindling earnings from oil due to the global crisis in the oil market, the maritime industry nay Nigeria Customs is understandably the preferred bride for these economic speculators.
Various attempts have been made in the past to dip their hands in the Customs’ till without success.
In 2011, the illegal concession of Customs key functions between the ministry of finance and a company called Single Window System and Technologies was shot down.
In 2017, another move for Customs modernisation was made by the technical committee on the Comprehensive Import Supervision Scheme(CISS) which was pretentiously acting on behalf of the Federal government, with a technical partner called Adani system Nigeria limited.
The attempt, which sought to concession the Customs then for 25 years, was frustrated.
However, in a blatant disregard for popular opinion, the Federal government, after several failed attempts, eventually forced down the throat of the unwilling stakeholders, the concession of the agency.
However, the deeds have been done.
Any further lamentation by the stakeholders on the issue is crying over spilled milk.
Now that the government has had its way, we can only hope that its aspirations for the concession will be realised.
The Minister of Finance, Budget, and Planning, Zainab Ahmed, has said the government stands to realise $176 billion from the project without spending a Kobo.
The question is how much will the concessionaires realise within the 20- year period of the deal beyond the $3.2billion investments they are expected to sink into the project?
What would be the fate of the customs officers whose jobs will be affected by the take-over of the revenue functions of the agency?
Even though the Comptroller General of the service, Col. Hameed Ali, has allayed the fear of job loss, the redundancy of some categories of officers could not be totally ruled out.
It is instructive to note that one of the two core functions of the customs, which is revenue generation, has now been concessioned under the guise of this new modernisation project, leaving them with the anti-smuggling function.
We hope rather than render some crop of officers reductant which may lead to possible right-sizing of staff, they could be redeployed to beef up the anti-smuggling function of the service.
We are worried about the involvement of the Chinese in the project as represented by Huawei which serves as a technical partner.
The ubiquitous Chinese have gradually become a leech on Nigeria, sucking on the economy of the nation.
We can only hope that the modernisation project will leave the Nigeria Customs service better than it met it.
We equally hope the project will not be sabotaged by disgruntled insiders whose means of livelihood is being threatened.
The misadventure of the Professional Import Duty Administrators (PIDA) between 1996 and 2000 in the Nigeria Customs Service is still poignant in the memory of those who were in the know.
At that period, a firm of an accounting/consultant was engaged as professional Import Duty Administrators to complement the Nigeria Customs Service in the task of revenue generation.
They left the service worst off than they met it.
We appeal to the Federal government to ensure that this project transforms the service into a technologically-driven agency whose operations are seamless and paperless.
Editorial! Chairmanship of CRFFN: Mortgaging the Freight Forwarding industry
“Following Chibuike Amaechi’s imposition of one Alhaji Tsanni as chairman of the governing council, Amaechi’s action, contrary to the legal provisions of the CRFFN Act as regards the position of chairman and vice-chairman, has automatically placed the Council on the precipice.”
“It is absolute disregard of the rule of law. It’s not even healthy for the political future of Mr. President (Buhari).
Customs4 days ago
News Alert: Bleak Christmas as CBN again jerks up Customs duty exchange rate from N783 to N951.941
Headlines2 months ago
Shippers’ Council admits error in process leading to hike in terminal charges, promises to review the increase
Economy2 months ago
Tinubu sacks SON DG, 13 other heads of government agencies
Headlines4 weeks ago
Port operations resume as maritime workers end 72-hour siege on Nigerian ports
Customs3 months ago
Customs, UN agency collaborate to fight smuggling
Freight Monitor3 months ago
Prince Nwokeabia rallies support for Comptroller Ukpanah, CAC Enugu/Anambra/Ebonyi\command, as she assumes office