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🇳🇬 Nigeria /Economy & Trade

Vessel fund must deliver tangible trade gains, says shipowner

From The Punch · () English

Translated from English and summarized by DistantNews. Read the original for the full story.

At a glance

News Named sources Context piece
  • The success of Nigeria's Cabotage Vessels Financing Fund (CVFF) should be measured by its connection to actual trade opportunities, not just the amount available to shipowners.
  • Financing should be tied to identifiable cargo and long-term trade contracts to ensure vessel acquisition is driven by commercial viability.
  • The CVFF should be part of a broader national fleet development strategy, strategically allocating its estimated $700 million based on identified cargo volumes and appropriate vessel types.

Captain Ladi Olubowale, former President of the African Shipowners Association, asserts that the Cabotage Vessels Financing Fund (CVFF) must demonstrate tangible trade gains to be considered successful. He argues that its effectiveness should not be judged solely on the funds disbursed to individual shipowners, but on how well these funds translate into actual trade opportunities and economic benefits for Nigeria.

Olubowale explained that a $25 million facility, if properly structured and linked to identifiable cargo and long-term trade contracts, could be sufficient for acquiring a sizable vessel. He emphasized that ship acquisition must be driven by commercial opportunities, with the primary consideration being the specific trade the vessel will serve. This approach ensures that financing is repaid from trade proceeds, making the vessel commercially sustainable.

The success of the CVFF should not be measured simply by the amount available to individual shipowners, but by how effectively the funds are linked to actual trade opportunities.

— Captain Ladi OlubowaleOlubowale defined the key metric for the success of the Cabotage Vessels Financing Fund.

He further advised that Nigeria needs to identify available cargo volumes and match them with appropriate vessels before deploying the CVFF. Different cargo types, such as dry cargo, cement, and other commodities, require specially built vessels. Therefore, financing should not precede the establishment of clear commercial demand.

Olubowale suggested that the CVFF should function as a component of a comprehensive national fleet development strategy. With an estimated $700 million in the fund, Nigeria could develop a diverse national fleet if the money is strategically allocated and guided by industry professionals. He noted that many shipping ventures do not require massive capital but rather a solid trade plan to cover initial investments.

Most of this shipping does not require a big capital. It requires you to have a 10 per cent deposit as long as you trade to cover up that money.

— Captain Ladi OlubowaleOlubowale discussed the capital requirements for shipping ventures, emphasizing trade viability.
About this summary

Originally published by The Punch in English. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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