The Federal Government’s renewed push to promote indigenous participation in Nigeria’s maritime industry has gained momentum with the planned disbursement of the long-awaited Cabotage Vessel Financing Fund (CVFF). The move is expected to significantly boost the capacity of Nigerian shipowners to acquire and operate vessels under the nation’s flag.
Created under Section 44 of the Coastal and Inland Shipping (Cabotage) Act, 2003, the CVFF is a dedicated financing scheme aimed at supporting qualified Nigerian operators in acquiring ships for use in coastal and inland trade. The fund is managed by the Nigerian Maritime Administration and Safety Agency (NIMASA) in collaboration with the Federal Ministry of Marine and Blue Economy and accredited Primary Lending Institutions (PLIs).
How the Fund Works
Under the disbursement structure, funding is shared in a tripartite arrangement: NIMASA and the PLIs provide 85 percent of the financing, while the applicant must contribute 15 percent as equity. Applicants are required to demonstrate financial viability and submit an independently verified feasibility study to support their request.
To qualify, only Nigerian citizens or wholly Nigerian-owned companies are eligible. Applicants must also meet technical and managerial competence requirements and register the acquired vessels under the Nigerian Ship Registry.
Applications must be routed through approved PLIs, who bear full credit exposure—including NIMASA’s contribution—and are responsible for conducting due diligence and credit risk assessments. NIMASA, on the other hand, retains an oversight role, ensuring compliance and disbursing funds only upon receiving ministerial approval.
Security and Risk Measures
According to Akabogu and Associates legal experts, applicants must meet strict collateral and compliance requirements, while fund release will be governed by escrow arrangements and ongoing monitoring. NIMASA’s vessel tracking infrastructure will also play a key role in overseeing the deployment and use of financed vessels.
“The CVFF is designed solely to increase local vessel ownership and strengthen Nigerian participation in domestic shipping operations,” said maritime law firm Akabogu and Associates in a legal advisory issued on the subject.
Interest Rates and Guarantees
The interest rate on CVFF loans is expected to remain below commercial bank rates. While NIMASA sets a base interest rate, PLIs may add a limited margin to cover administrative costs. Guarantees are subject to risk-based assessments and may include escrow and monitoring provisions.
Industry stakeholders have been advised to engage legal and transactional advisory services to navigate the application process effectively. These services will help applicants understand eligibility, required documentation, and how best to structure their proposals in line with the fund’s criteria.
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