The Nigerian Maritime Administration and Safety Agency has been given permission to continue disbursing $700 million from the Cabotage Vessel Finance Fund by the House of Representatives Committee on Nigerian Content Development and Monitoring.
The House has requested the NIMASA to halt its proposal to withdraw the money from the Fund on May 2, 2023. The Committee on Local Content was instructed by members of the House to “immediately commence investigations of the Cabotage Vessel Finance Fund to determine all monies that have accrued to the fund since its establishment in the year 2003 and report to the House within 14 days.”
The House had also directed the committee to engage an external auditor to audit all contracts that have been entered into in the cabotage regime and report the same to the House within 14 days.
The lawmakers had also resolved to “direct NIMASA to immediately stop the planned disbursement of $700m to Nigerian citizens and companies,” asking the agency to and lay before the House, an audited statement of account “showing all monies that have accrued to the Cabotage Vessel Finance Fund not later than seven days from the date of this resolution.”
Furthermore, the House resolved to invite the Minister of Transport, Muazu Sambo; and the Director-General of NIMASA, Bashir Jamo, “to report to the House Committee on Local Content on the state of the Cabotage Vessel Finance Fund and how the funds have been applied over the past 20 years.”
These resolutions were sequel to the unanimous adoption of a motion of urgent public importance moved by a member of the House, Henry Nwawuba, titled ‘Urgent Need to Stop the Planned Disbursement of $700m Cabotage Vessel Finance Fund, and Investigate the Total Accrual of the Fund.’
However, the committee, in its report, a copy of which our correspondent obtained on Thursday, recommended that the $700m be disbursed.
In the report, the committee said it requested NIMASA and the Federal Ministry of Transportation to provide detailed information on the total amount accrued to the Fund and disbursements since inception.
According to the report, the committee met with the Minister of Transportation and the Director-General of NIMASA on May 11, 2023, to find out about the details concerning the matter.
It partly read, “After a thorough analysis of the various submissions on the matter, coupled with the explanations given by the Ministry and NIMASA, the committee discovered that due process was followed in the planned disbursement of the Cabotage Vessel Finance Fund.
“The committee notes that the CVFF is a fund that was set up in 2003 by the Coastal and Inland Shipping Act. The Fund was established for the purpose of developing indigenous ship acquisition capacity, and to provide financial assistance to indigenous shipping operators.
“The committee further notes that there is a lack of capacity amongst indigenous/domestic coastal operators in Nigeria, thus the reason Nigerian National Petroleum Company Limited still awards contracts to foreign shipping companies, in contravention of the Cabotage and Nigerian Oil and Gas Industry Content Development Act. Some of these awards have been previously investigated by the Committee which led to their cancellation.
“It was also discovered that the total funds of $360m in the CVFF account with the Central Bank of Nigeria represents 50 per cent, while the remaining counterpart funds of 50 per cent is from stakeholders and banks, which is 15 per cent and 35 per cent, respectively.”
The committee said in view of the findings during the investigation, it recommends that “NIMASA should go ahead with the disbursement of the Cabotage Vessel Finance Fund in compliance with the extant laws and laid down guidelines for the said disbursement.”
The committee also said to ensure the disbursement does not violate any of the extant laws made by the National Assembly, “the following persons were nominated to supervise the disbursement process: Legor Idagbo – Chairman, Henry Nwawuba – Member and Kehinde Bolade-Olaiya – committee clerk.”
According to the report, the committee appointed an audit firm, Stratford Hill and Co., as the coordinating enforcement auditor for the CVFF.
The report partly read, “The committee applauds NNPC for its commitment to awarding the shipping contracts to indigenous companies that have built capacity to the level where they can successfully execute these contracts.
“The committee is grateful to the leadership of the House for the confidence bestowed on it to carry out the investigation.”