Nigerian Shipowners Struggle with CVFF Loan Conditions

Indigenous shipowners in Nigeria are encountering significant obstacles in accessing the $360 million Cabotage Vessel Financing Fund (CVFF). Participating banks, including Fidelity Bank, Stanbic IBTC Bank, and United Bank for Africa, are demanding cargo or service contracts and collateral amounting to at least 135% of the loan amounts.

This stringent requirement raises concerns about the fund's implementation, which was directed for release by the Minister of Marine and Blue Economy, Adegboyega Oyetola. Industry stakeholders argue that these conditions do not reflect the realities of Nigeria's maritime sector, where many shipowners operate older vessels and rely on third-party contracts.

The banks' insistence on direct contracts with international oil companies complicates access to financing, as many indigenous shipowners may not meet these conditions. The CVFF, established under the Coastal and Inland Shipping (Cabotage) Act of 2003, aims to provide long-term, low-interest financing to support local participation in the maritime industry.