VESSEL FUND MUST DELIVER TANGIBLE TRADE GAINS

A former President of the African Shipowners Association, Captain Ladi Olubowale, has called for the strategic deployment of the Cabotage Vessel Financing Fund to ensure that it generates tangible benefits for Nigeria’s maritime trade.

Olubowale said the success of the CVFF should not be measured simply by the amount of money made available to shipowners but by whether the financing is connected to identifiable commercial opportunities.

He said a $25 million facility could be sufficient to acquire a sizeable vessel if the financing was backed by guaranteed cargo and long-term trade contracts.

According to him, ship acquisition should be driven by the availability of cargo and the specific trade the vessel is expected to serve.

He cited dry cargo, cement and other commodities as examples of trades requiring vessels suited to particular cargo requirements.

Olubowale argued that Nigeria should first identify available cargo volumes and then match them with appropriate vessels before approving financing.

He said a one or two-year contract guaranteeing cargo could provide sufficient revenue for an operator to repay the financing while maintaining commercial sustainability.

The shipowner also called for the CVFF to be incorporated into a broader national fleet development strategy rather than treated solely as individual financing for shipowners.

He estimated that the fund could reach about $700 million, arguing that strategic deployment of the money could help Nigeria develop a stronger indigenous fleet across different cargo segments.

Olubowale said some banks had already approached his company with term sheets outlining financing requirements, including equity contributions, indicating growing interest in the fund.

He urged authorities and industry stakeholders to ensure that the CVFF produces measurable economic value by increasing Nigeria’s indigenous shipping capacity and enabling local operators to capture a larger share of the country’s maritime trade.

He maintained that linking financing to actual trade opportunities would improve the sustainability of vessel acquisition and strengthen Nigeria’s position in the maritime sector.