A former director of the Nigerian Maritime and Administration Safety Agency (NIMASA) revealed that the Cabotage Vessel Financing Fund (CVFF) accruing a percentage of charter rates for 23 years is domiciled in naira, not dollars as publicly reported by the agency.
“CVFF is not held in dollars. It is in naira at the present exchange rate,” Temisan Omatseye told stakeholders Thursday at a summit by the Shipping Correspondents Association of Nigeria in Lagos.
“Every last week of the month, when we do a sweep, we collect dollars and automatically change it to Naira,” said Omatseye, who served as director general of NIMASA for two years from 2009—six years after the fund was created to help indigenous shipowners finance the acquisition of their own vessels.
He explained that the interest rate disparity between dollar and naira deposits at the time enticed the decision from the Accountant-General of the Federation.
“Interest rate at that time was quite high, between 23 percent and 25 percent but in dollars, it was about one or two percent. The account general [Ibrahim Dankwambo] said we cannot hold the money in dollars because we are earning better interest rates in naira. So every time we received the money in dollars, we converted it to naira and earned a better interest rate on it,” Omatseye said.
NIMASA has only publicly reported the cabotage vessel fund in dollar value, creating reasonable doubt among those with a stake in it. In 2023, Bashir Jamoh, who was the director-general, told press that the fund held up to $350 million domiciled with the Central Bank of Nigeria. There has not been an update on the fund’s volume since.
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It is not clear if the value was reported before conversion, but the effects of recent reforms including the floating of the naira that devalued the currency would calculate differently today.
“You cannot expect the naira we had at N179 to a dollar then to be the same today.” The deposit is calculated against the exchange rate at the time of colelction, “so if the exchange rate is N1,350 per dollar today, whatever naira value it is, is what you are expecting to have,” Omatseye said.
“So you cannot be looking at $350 million as at 2019 to be the same $350 million today.”
The arrangement calls into question the real value of the CVFF. Transparency in the fund’s management and disbursement process has historically been low. Shipowners have frequently requested an audit of the account.
In January the Ministry of Marine and Blue Economy created a portal to allow shipowners to apply for a part of the fund. 92 applications have been made since but only one has successfully cleared assessment from NIMASA and the PLIs so far. It is still awaiting final approval from the Minister.
Bethel Olujobi is the Trade Correspondent at BusinessDay. He brings scarce insight into Nigeria's maritime policies and the changing currents of global commerce defining the country's position in international trade. Before this, he reported on foreign relations, migration and sports for BusinessDay. He holds a Bachelor's degree in Mass Communication, and is an alumni of the CNN Academy and the Financial Times News School. He is certified by Reuters and Google. He is based in Lagos, Nigeria. For pitches, email: [email protected]
