$700m cabotage fund: Eligible shipowners to access $25m
Just last Thursday, the federal government announced the opening of the application portal for the disbursement of the Cabotage Vessel Financing Fund (CVFF), a $700 million fund aimed at supporting indigenous shipowners and operators in the country’s maritime sector. With this it has kick-started the process of the disbursement of the CVFF, which is expected […]
Just last Thursday, the federal government announced the opening of the application portal for the disbursement of the Cabotage Vessel Financing Fund (CVFF), a $700 million fund aimed at supporting indigenous shipowners and operators in the country’s maritime sector.
With this it has kick-started the process of the disbursement of the CVFF, which is expected to save Nigeria billions of dollars in capital flight, which has been a major challenge facing the country’s economy.
By providing financing for Nigerian-owned vessels, the government hopes to reduce the country’s reliance on foreign vessels and retain more of its oil and gas revenues.
This is just as eligible indigenous ship owners would be able to access $25m each at competitive interest rates according to the federal government.
According to industry experts, the CVFF disbursement is a significant step towards developing Nigeria’s maritime sector and promoting indigenous participation.
“The CVFF is a game-changer for the Nigerian maritime industry,” said visibly excited Otunba Sola Adewumi, President of the Nigeria Shipowners Association.
“It will provide the necessary financing for Nigerian shipowners and operators to acquire vessels and compete with their foreign counterparts,” he added.
The CVFF disbursement is also expected to create jobs and stimulate economic growth in the maritime sector.
With more Nigerian-owned vessels operating in the country’s waters, there will be an increase in demand for local goods and services, leading to job creation and economic growth.
The Nigerian Maritime Administration and Safety Agency (NIMASA) has been charged with the responsibility of disbursing the CVFF.
The NISA President explained that for the Nigerian shipowners, the portal represents renewed hope—hope for fleet expansion, modernization, job creation for Nigerian seafarers, and greater retention of maritime value within the national economy.
He added that when indigenous shipowners are empowered, the entire maritime value chain benefits.
“The CVFF, established under the Cabotage Act, was created to provide Nigerian shipowners access to affordable financing and to strengthen indigenous participation in coastal and inland shipping. The commissioning of this digital portal marks a critical milestone in the realization of that objective.
“It demonstrates transparency, accountability, and a deliberate effort by the Federal Government to ensure that the Fund delivers real value in line with the Marine and Blue Economy policy.
“I wish to assure the Honourable Minister and the Management of NIMASA of the full support and cooperation of the Nigerian Shipowners Association. We are committed to responsible utilization of the Fund and to working with all stakeholders to ensure the objectives of the Cabotage Act are fully achieved.
“I also urge eligible shipowners to embrace this opportunity with integrity, professionalism, and a long-term national outlook” he stated.
Also speaking on the CVFF disbursement, Captain Ladi Olubowale, the immediate past president of Africa Shipowners Association (ASA), advised the financial institutions and lenders who would manage the fund, saying the CVFF would deepen maritime finance expertise and support national economic growth.
Captain Ladi Olubowale, who is a Board of Director of Seamate Maritime Integrated Services Limited, said the unveiling of the CVFF Application Portal was historic as it marks a defining moment for Nigeria’s maritime sector.
Olubowale said the drivers and executors of the CVFF will be led by the private sector while listing the call to action for each of the stakeholders as follows.
“The CVFF presents a generational opportunity for Nigerian shipowners to scale, modernise fleets, and compete effectively in coastal and regional trade. Shipowners must approach this fund with strong governance, bankable business plans, and a commitment to safety, compliance, and operational excellence. This is the moment to move from survival to sustainability and from participation to leadership in cabotage trade,” he added.
The President Women’s International Shipping & Trading Association (WISTA) Nigeria, Dr. Odunayo Ani, who also spoke stated that the Commissioning of the CVFF application portal, is a significant advancement in the country’s maritime sector, adding that it is indeed a forward-looking initiative that will enhance transparency, promote ease of access, and strengthens confidence among stakeholders.
“It reflects strong leadership and a shared commitment to driving efficiency, inclusiveness, and sustainable growth across the marine and blue economy landscape. We commend the Honourable Minister and the Director-General for their strategic vision and dedication to implementing practical solutions that respond to longstanding needs in the industry.
“The commissioning of this portal is a testament to deliberate efforts to modernise processes, deepen stakeholder engagement, and unlock new opportunities for operators and investors alike.
“As women in the maritime ecosystem, we reaffirm our support for initiatives that champion equity, professionalism, and innovation. We look forward to continued collaboration with the Ministry, NIMASA, and all sector partners as we work together to build a more resilient, competitive and inclusive maritime sector,” she stated.
…Shipowners demand transparency in screening, disbursement
Meanwhile, indigenous shipowners in Nigeria are calling for transparency in the disbursement of the $700 million Cabotage Vessel Financing Fund (CVFF).
The call became necessary after the Federal Government official commissioned the CVFF application portal.
Though, the Director General of the Nigerian Maritime Administration and safety Agency (NIMASA), Dr. Dayo Mobereola, had during the flag-off explained that the portal doesn’t translate to disbursement, but the shipowners stated that the call became necessary so as to guide against any form of favouritism.
Daily Trust reports that the fund, which is aimed at supporting the development of the country’s maritime industry, has been a subject of interest among local shipowners.
Speaking, the shipowners demanded that the federal government, through its agency, should ensure a transparent process of screening and in the allocation and disbursement of the CVFF.
They argue that transparency is crucial to prevent corruption and ensure that the funds are utilized effectively.
According to the Minister of Marine and Blue Economy, Dr. Adegboyega Oyetola, the CVFF is designed to provide financial support to indigenous shipowners to acquire vessels and improve their operational efficiency.
At the flag-off, the minister assured that the fund’s disbursement would be based on clearly defined criteria, supported by robust due diligence and professional financial oversight.
However, some stakeholders have raised concerns about the lack of clarity on the eligibility criteria and the selection process for beneficiaries.
…NIMASA to restrict CVFF to contributing shipowners
Sources at NIMASA have hinted at plans to restrict benefits from the Cabotage Vessel Finance Fund (CVFF) to only shipowners who have contributed to the fund.
Multiple sources at NIMASA revealed that this decision is aimed at ensuring that only those who have invested in the fund benefit from it.
The CVFF, which currently stands at an estimated $700 million, was established to support the development of indigenous shipping capacity in Nigeria.
NIMASA’s decision is expected to impact shipowners who have not contributed to the fund, as they will no longer be eligible to access the benefits.
The agency has emphasized that contributions to the CVFF are mandatory for all shipowners operating in Nigeria.
Industry stakeholders have reacted to the announcement, with some expressing support for NIMASA’s decision.
They argue that the restriction will encourage more shipowners to contribute to the fund, ultimately growing the pool of resources available to support the development of the maritime industry.
However, others have raised concerns that the restriction may unfairly penalize shipowners who have not contributed to the fund, potentially harming their businesses. They argue that NIMASA should consider alternative measures to encourage contributions, rather than imposing restrictions.
NIMASA has yet to provide further details on how the restriction will be implemented, but the agency has assured stakeholders that it will continue to work towards supporting the growth and development of the maritime industry in Nigeria.
Disbursement Process
Presenting details of the disbursement process to stakeholders during the launch of the portal, the Financial Consultant for the CVFF, Buhari Yusuf, said the disbursement of the funds will commence in a few weeks with clear funding ratios, interest rate, timelines and bank participation now defined.
On the timelines, Yusuf said the application and structuring phase, from the applicant through the Primary Lending Institutions (PLIs), including the preparation of a term sheet and notification to NIMASA, is capped at a maximum of 30 days to process.
He said NIMASA’s internal review, issuance of an eligibility certificate and forwarding of applications to the Minister of Marine and Blue Economy for final approval is expected to take about seven days.
Yusuf added that the final approval by the Minister has been allocated a maximum of 30 days, excluding the time taken by applicants to meet conditions precedent for disbursement.
He said once all conditions are met and a disbursement request is submitted by a PLI, NIMASA will release its portion of funds within 72 hours, while the PLIs are expected to immediately deploy the loan to beneficiaries to acquire vessels or other approved maritime assets.
Detailing the process of application, Yusuf explained that applicants seeking access to the fund must present bankable, transaction-based proposals supported by feasibility studies and must also provide equity contributions to demonstrate commitment to the projects being financed.
Yusuf, however, listed the 12 financial institutions pre-qualified to participate in the CVFF framework to include, Zenith Bank, United Bank for Africa (UBA), Union Bank, Taj Bank, SunTrust Bank, Stanbic IBTC, First Bank, Optimus Bank, Lotus Bank, Jaiz Bank, Fidelity Bank and the Bank of Industry (BOI).
NIMASA invites eligible shipowners to apply
Similarly, NIMASA has issued a Marine Notice inviting eligible Nigerian shipping companies to submit applications.
It explained that qualified applicants will be able to access up to USD 25 million each at competitive interest rates to acquire modern vessels that meet stringent international safety and performance standards.
The Fund will be administered in close collaboration with carefully vetted and approved Primary Lending Institutions, ensuring a professional, efficient, and accountable disbursement process.
The CVFF was established under the Coastal and Inland Shipping (Cabotage) Act of 2003 as a vital instrument to provide structured financing for Nigerian shipping companies to acquire vessels and participate meaningfully in domestic maritime trade. However, for more than two decades, the Fund remained largely inaccessible, leaving indigenous operators dependent on costly foreign financing or foreign-flagged vessels.
QUOTE
The CVFF, established under the Cabotage Act, was created to provide Nigerian shipowners access to affordable financing and to strengthen indigenous participation in coastal and inland shipping.
Promo
50 Oil blocs: Only applicants with strong credentials will be selected – NUPRC
Court voids PENGASSAN’s suspension of NMDPRA members, orders election
Unpaid Taxes: How power of substitution works, by LIRS Chairman