Operators in the maritime sector will reportedly receive about $700 million to buy ships, according to the Nigerian maritime Administration and Safety Agency (NIMASA).
This information was provided by Bashir Jamoh, director-general of NIMASA, during his speech at the inaugural yearly lecture of the Institute of Maritime Studies, University of Lagos, which took place on Tuesday.
From Crude to Blue: The Imperative of Maritime Domain Awareness and Good Governance was the lecture's topic.
The term "blue economy" refers to an economic system that aims to protect freshwater and marine environments while using them sustainably to generate economic growth and create resources like food and energy.
He added that the cabotage vessel financing money has been allocated about $700 million (CVFF).
According to Jamoh, the fund seeks to support local ship acquisition capacity and to give money to domestic coastal shipping companies.
“On the issue of increasing jobs, we are about to commence the disbursement of the cabotage vessel financing fund. The total exposure of the CVFF is within the region of $350 million and this amount is 50 percent of NIMASA control,” he said.
“By the guidelines, the primary lending institutions will provide 35 percent and shipowners will have to provide 15 percent, making 50 percent in total.
“If we have $350 million as 50 percent contribution to NIMASA, then we are accepting another $350 million from the primary lending institutions and that means $700 million.”
Jamoh added that the government was considering giving ship owners $25 million each from the fund.
“With $700 million, we are set to give a maximum of $25 million each to shipowners to purchase ships which will directly or indirectly provide jobs.”
Additionally, Jamoh revealed that the Nigerian National Petroleum Corporation (NNPC) Limited recently showed interest in taking part in the financing of ships that Nigerian shipowners would purchase using the soon-to-be distributed CVFF.
He claimed that the NNPC promised to contribute 9% funding toward this goal, allowing shipowners to use the CVFF and purchase new ships.
"The NNPC agreed to offer them 9 percent, so that the shipowners will only have to source for only 6 percent,” the NIMASA boss said.
“NNPC said it needs ships to lift Nigerian crude and that it will give Nigerian shipowners the specifications of ships to buy. It will also give them 9 per cent out of the 15 percent of the funding that was supposed to be provided by the shipowner.
“They said they will take over the ship and provide the cargo until it recovers the amount invested in the acquisition of the ships.”