The Federal Government has launched the Cabotage Vessel Financing Fund (CVFF) application portal to enable indigenous shipowners to process and access a $25 million loan facility within 70 to 80 days at a 6.5 per cent interest rate and a repayment period of eight years.
Speaking at the launch, the Director-General of the Nigerian Maritime Administration and Safety Agency (NIMASA), Dr Dayo Mobereola, said the applicable interest rate on the loan was fixed at 6.5 per cent after adjustments by the financial consultant, the agency and the Primary Lending Institutions (PLIs). He said the revised rate reflects the agency’s commitment to easing the financial burden on indigenous shipowners.
Mobereola explained that shipping is a capital-intensive industry that requires long-term and patient capital to grow and remain competitive. According to him, the eight-year repayment window is designed to allow shipowners enough time to stabilise their operations, build confidence, generate revenue and meet repayment obligations without excessive pressure.
He also disclosed that NIMASA has set up a dedicated CVFF unit to drive implementation of the fund. The unit will manage applications, coordinate with financial institutions and ensure strict compliance with eligibility requirements, risk management standards and operational guidelines.
Presenting details of the disbursement process during the launch of the portal in Lagos, the Financial Consultant for the CVFF, Buhari Yusuf, said disbursement of funds would commence in a few weeks now that funding ratios, interest rates, timelines and bank participation have been clearly defined.
Yusuf explained that the application and structuring phase, which runs from the applicant through the PLIs and includes the preparation of a term sheet and notification to NIMASA, is capped at a maximum of 30 days. He said this step is aimed at ensuring faster processing and reducing delays that have affected similar interventions in the past.
He added that 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. According to him, this internal timeline has been streamlined to improve efficiency and accountability.
Yusuf further stated 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 the funds within 72 hours.
He noted that the PLIs are expected to immediately deploy the loan to beneficiaries to enable them acquire vessels or other approved maritime assets. Yusuf explained that applicants must present bankable, transaction-based proposals supported by feasibility studies and must also provide equity contributions to show commitment to the projects being financed.
He listed the 12 financial institutions pre-qualified to participate in the CVFF framework as Zenith Bank, United Bank for Africa, Union Bank, Taj Bank, SunTrust Bank, Stanbic IBTC, First Bank, Optimus Bank, Lotus Bank, Jaiz Bank, Fidelity Bank and the Bank of Industry.
The Minister of Marine and Blue Economy, Dr Adegboyega Oyetola, said the digital and rules-based framework would ensure that the CVFF is insulated from arbitrariness, opacity and administrative practices that have undermined similar funding initiatives in the past. He said the approach would reinforce confidence among investors, financial institutions and indigenous operators.
Oyetola urged beneficiaries to meet their obligations fully, stressing that responsible use of the fund would ensure its availability to current applicants and future generations of Nigerian maritime entrepreneurs. He added that the Ministry, working with NIMASA, is collaborating with the Federal Ministry of Finance, the Central Bank of Nigeria and other stakeholders to resolve outstanding issues around the CVFF.
Meanwhile, shipowners welcomed the digital initiative and expressed support for the fund but called for a review of the repayment structure and period. They also urged the government to support access to cargo to ensure the initiative strengthens local shipping capacity.
Former President of the Ship Owners Association of Nigeria, Dr MkGeorge Oyung, raised concerns about the sustainability of the repayment structure. He said the eight-year duration for a $25 million vessel financing facility may be too short for operators to remain commercially viable.
Giving a financial breakdown, Oyung said a $25 million loan spread over eight years would require repayments of about $8,500 per day, excluding operational costs. He added that for such a repayment plan to be realistic, vessel owners would need to secure daily charter contracts ranging between $14,000 and $20,000.
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