The House of Representatives ad hoc committee on the investigation into the Cabotage Vessel Financing Fund (CVFF) raised a number of questions during its public hearing with stakeholders in the maritime sector.
The committee which is led by Rep Christopher Eta (PDP, Cross River) swung into action on Tuesday, October 8. The investigation followed a resolution on same passed by the House on May 8.
Present at the public hearing were the Minister of Transport, Senator Umar Idris; Director-General of the Nigerian Maritime Administration and Safety Agency (NIMASA), Patrick Akpobolokemi, Permanent Secretary in the ministry and bank executives among other top stakeholders.
Lending credence to the fact that the sector is in a mess, Reps Speaker Aminu Waziri Tambuwal had set the ball rolling while declaring the hearing open, saying that, “over the years, our maritime sector has suffered from the cancer of ineptitude occasioned by poor regulatory framework.”
Tambuwal added that “the Nigerian inland water ways has remained grossly a wasteland for the national economy. The desired salutary effect has not been seen in the volume of cabotage business in Nigeria. The fear is that some unpatriotic people are misapplying the Cabotage Vessel Financing funds to the detriment of its objectives.”
During the investigative hearing, the committee expressed concern as to why the administration of the fund was not handled according to due process.
Senator Idris had during his presentation said that the collection of CVFF commenced in 2004, giving the names of the collecting banks as Access Bank, Guaranty Trust Bank, Mainstream Bank and Keystone Bank, while a fixed deposit is maintained with the United Bank for Africa (UBA).
He listed Fidelity Bank, Skye Bank, Diamond Bank and Sterling Bank as the Primary Lending Institutions (PLIs) with an agreement for equity contributions with the PLIs as stipulated in the guidelines thus: NIMASA, 50 percent; PLIs, 35 percent; and applicants 15 percent.
The minister said that on January 21, 2010, NIMASA submitted a request for the granting of waivers to cabotage vessels in favour of vessels owned by 10 Nigerian firms.
The reasons for the request, he said, were because “the vessels are wholly owned by Nigerian citizens and are suitable and available to provide the services or perform the activities described in their applications.”
He maintained that the vessels, though not built and manned by Nigerians, have satisfied the provisions of the Cabotage Act, 2003 with regards to granting of ministerial waiver against the ‘built-in-Nigeria’ and ‘manned-in-Nigeria’ requirement respectively.
After review, he said, the approval was granted on March 16, 2010 subject to compliance with extant laws and guidelines.
A similar application was approved in January 2012 for the request by Messrs Bourbon Interoil Nigeria Limited for waiver exemption on 50 of its vessels engaged in coastal trade to continue to fly foreign flags and another one between January this year and February next year.
Similarly, a request letter submitted to the minister dated April 6, 2013 had the names of six PLIs for the disbursement of the first phase of the CVFF to the recommended beneficiaries.
They are Diamond Bank whose applicant is Starzs Investment Company with £16,900,000 recommended and £8,450,000 as CVFF 50% contribution; Fidelity Bank, applicant is Acquashield Oil and Marine Services Limited, $24,000,000 recommended; Skye Bank, Nkrah Investment Limited as applicant, with $34,262,564 as recommended amount.
Others are Sterling Bank, whose applicant is Zomay Marine and Logistics Limited with $21,500,000 recommended amount; Sterling Bank with another applicant as UTM Dredging Limited and $6,000,000 recommended amount, while Diamond Bank has another applicant as Sea Bulk Offshore Operating Nig. Limited with $25,000,000.
However, members of the committee were not satisfied with the explanations offered by the minister, especially with regards to the accruals of the CVFF from inception to date, demanding that the ministry should produce a year-by-year report and not an overall summary.
The committee raised eyebrows over the payment of about $326 million to a company allegedly owned by a former Niger-Delta activist-turned oil tycoon.
Also, there were concerns about the funds being approved and about to be disbursed, questioning the rationale behind having just six applicants’ requests approved while there might be other numerous applicants left out.
Chairman of the ad hoc committee Rep Eta expressed reservation as to whether Nigerians could look back and applaud the passage of the Cabotage Act, 2003 10 years after, as well as the impact it has made so far in the life of indigenous shipping or cabotage matters.
He wondered if with the current status of the fund and its current mode of operation, its vision be realized to set the sector free from any interference.
Rep Adejare Samuel Babatunde (APC, Lagos) who is a member of the committee was particularly concerned by the huge amount of money said to be paid to a company. This made the committee to demand for the CVFF’s detailed bank statement of accounts.
The committee also faulted the payment of about 50 percent of NIMASA’s generated revenue to the said company, which was contrary to laid down procedures of government financial transactions.
The committee was also tensed up by the way NIMASA was said to have been moving funds from the CVFF accounts to other accounts without proper authorization, faulting the rationale behind doing so.
Another area that attracted the attention of the lawmakers was the way NIMASA engaged its consultants in all its dealings as a result of which the committee ordered that the agency should make available names of such consultants and the amounts paid to them so far.
The committee is expected to conclude its investigation and submit its report to the House before the end of the year.
Information from Daily Trust was used in this report.