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The controversy surrounding the management and currency status of the $360 million Cabotage Vessel Financing Fund (CVFF) has deepened, with maritime industry experts calling for a comprehensive audit of the accounts of the Nigerian Maritime Administration and Safety Agency (NIMASA) from 2004 to date to establish the actual status of the fund.

The call for an audit followed conflicting accounts by a former director-general of NIMASA, Temisan Omatseye, and the incumbent director-general, Dr Dayo Mobereola, over whether the dollar-denominated contributions to the fund were converted into naira or retained in United States dollars.

While Omatseye maintained that the dollar funds were converted into naira and placed in fixed deposits during his tenure, Mobereola has insisted that the dollar component of the CVFF remains domiciled in dollars with the Central Bank of Nigeria (CBN).

The proposed audit, maritime stakeholders believe, would provide an independent account of the fund’s financial history, establish whether the dollar contributions were converted into naira and determine the actual amount available for disbursement to indigenous shipowners

The disagreement has also attracted criticism from the Shipowners who questioned the rationale behind converting the fund into naira when indigenous shipowners continue to make their statutory contributions in dollars.

The former president of the National Association of Master Mariners (NAMM), Capt. Tajudeen Alao, who called for the audit, said an independent examination of NIMASA’s accounts covering the period from 2004 to date would establish the true financial position of the fund and resolve the conflicting claims.

The CVFF was established under the Coastal and Inland Shipping (Cabotage) Act to provide financial support to Nigerian indigenous shipowners for vessel acquisition and the development of local shipping capacity.

Despite more than two decades of contributions by maritime operators, the fund is yet to be disbursed to beneficiaries, raising concerns over its management, currency denomination and the prolonged delay in making it accessible to indigenous shipowners.

Alao said the former NIMASA director-general had confirmed that the dollar-denominated contributions were converted into naira and deposited with the CBN during his administration.

He, however, noted that if the incumbent director-general maintained that the funds remained in dollars with the apex bank, the agency should provide documentary evidence to establish its position.

According to him, a comprehensive audit would provide an independent basis for determining what accrued to the fund, how the money was managed and its present financial status.

Alao also lamented that the prolonged failure to disburse the CVFF had frustrated several indigenous shipowners, forcing many out of the shipping business, a development he said was detrimental to Nigeria’s maritime industry.

He stressed that the availability of cargo guarantees and the ship-management capacity of prospective beneficiaries should form part of the eligibility requirements for accessing the fund.

According to him, prospective beneficiaries must demonstrate the ability to manage vessels, secure cargo and effectively utilise and repay loans obtained from the fund.

He maintained that the CVFF was established to strengthen indigenous participation in shipping and build local capacity, adding that the prolonged non-disbursement had undermined these objectives.

Also weighing in on the controversy, NISA President, Otunba Sola Adewumi, insisted that the CVFF should remain denominated in dollars, questioning the rationale for converting the fund into naira.

He said the guidelines governing the administration of the fund did not provide for converting dollar contributions into the local currency, stressing that shipowners continued to make their statutory payments in United States dollars.

Adewumi urged NIMASA and the Federal Ministry of Marine and Blue Economy to clarify Omatseye’s claims, noting that the former director-general, having previously occupied the position, should understand how the fund was managed.

“If you have heard from the former DG that the money has been converted to naira, it is left for the DG and the ministry to counter what the man has said because he was once in that position, so he should know better than people like us,” Adewumi said.

The NISA president questioned why the fund should be converted into naira when shipowners continued to make payments in dollars for shipping-related transactions and other obligations.

“Money was not meant to be converted to naira ordinarily because we are paying in dollars. Even as we speak, we still pay them in USD. So, why are they converting it to naira? These are the questions we should ask ourselves,” he said.

He maintained that the existing CVFF guidelines stipulated only the contributions expected from shipowners, without providing for converting the fund into the local currency.

“Does the guideline say that the money should be converted? No. The guideline only says that we should contribute, and for all the transactions we are doing, we are paying for shipping, developing, and it’s usually in USD. So, if they want it in naira, then why should they ask us to be paying in USD?” he queried.

Adewumi, however, acknowledged that he was not directly involved in the management of the fund, noting that his position was based on the provisions of the guidelines and information available to him.

Meanwhile, Omatseye, who served as NIMASA director-general between 2009 and 2010, defended the conversion of dollar-denominated internally generated revenue, including the three per cent surcharge and CVFF contributions, into naira during his tenure.

He said the conversion followed a directive from the Accountant-General of the Federation (AGF), which was based on the higher interest rates offered by commercial banks on naira deposits compared with dollar deposits at the time.

According to him, while dollar deposits attracted interest rates of between one and two per cent, naira deposits offered returns of upwards of 15 per cent, making the conversion financially attractive to the agency.

Omatseye explained that when he assumed office in 2009, NIMASA’s funds, including the CVFF and three per cent surcharge, were held in commercial banks, with several banks appointed as collection banks.

He said the collections were subsequently transferred into designated naira and dollar accounts on the 23rd of every month.

“By virtue of a memo from the Accountant-General’s office, the agency was directed to change all foreign internally generated revenue, be it three per cent or CVFF, into naira and fix it in naira,” he said.

The former NIMASA boss maintained that all dollar funds received as CVFF during his tenure were converted into naira, insisting that his comments reflected the financial management practice under his administration.

He, however, said NIMASA was in a better position to explain how the fund had been managed following the introduction of the Treasury Single Account (TSA).

“What has been the practice since the advent of TSA is better explained by NIMASA. In light of that, I stand fully by my statement that during my tenure, all dollar funds received as CVFF were converted into naira,” he said.

Omatseye further disclosed that as of December 13, 2010, when he left office, NIMASA had N52 billion in fixed deposits, comprising the CVFF and the Maritime Fund.

However, Mobereola, through a statement personally signed by him, dismissed reports suggesting that the dollar-denominated component of the CVFF had been converted into naira, describing the claim as incorrect.

The agency explained that the revenue streams accruing to the fund were denominated in different currencies, adding that contributions received in dollars were retained in dollars with the CBN, while naira contributions were held in naira.

“For the avoidance of doubt, this claim is incorrect and does not reflect the actual status of the CVFF,” the agency said.

It maintained that there had been no conversion of the dollar-denominated component of the fund into naira, contrary to the reports attributed to the former director-general.

Mobereola also disclosed that the Minister of Marine and Blue Economy, Adegboyega Oyetola, was working towards ensuring the commencement of the long-awaited disbursement of the fund to qualified beneficiaries.

According to NIMASA, applications have been received from eligible beneficiaries, with some undergoing the required documentation processes with their preferred Primary Lending Institutions (PLIs).

The agency expressed optimism that the disbursement process would commence shortly, adding that the minister remained committed to strengthening indigenous shipping capacity and empowering local operators.