Nigerian shipowners have expressed hope that the disbursement of the $700m Cabotage Vessels Financing Fund would crash freight costs in Nigeria.

These shipowners who stated this in a chat with The PUNCH expressed readiness to meet the required criteria to access the fund.

The President of the Nigerian Chamber of Shipping, Mr Aminu Umar, explained that most shipowners would meet the criteria for the disbursement of the fund.

“I am sure that there are shipowners who will meet the criteria. But whether all shipowners will meet the criteria, I don’t think it’s possible. But I am sure that there are substantial shipowners that will meet that criteria,” Umar said.

On how the fund would reduce freight rates in Nigeria, he said, “With the fund, Nigerians will be able to buy ships. That means that Nigerians will own the ships that will be moving, either taking out cargoes or bringing in cargo into Nigeria and distributing the cargo within Nigeria or West Africa. It will bring jobs, wealth, and a lot of Nigerians will have jobs. Companies will now have money to pay more taxes or generate more revenue for the country.

“At the end of the day, because it’s Nigerians that own the ships, the charges will be more flexible than a foreign company, so it will have an impact on the importation of goods into the country. It might reduce the freight cost, or it might create flexibility in terms of the currency of payment. This is very important, as far as I am concerned, the impact will be very good in terms of positive impact on the Nigerian economy,” Umar said.

Umar, however, said he can’t estimate the level of reduction the fund will bring to the sector.

“It’s a function of the destination, where the cargo is going to or where you’re picking the cargo from. And then it depends on the market at the same time. So, you cannot say it. But the only thing is that it will bring a positive impact. At the end of the day, the freight will be back to the Nigerian economy,” he said.

Also speaking, the President of the Nigerian Indigenous Shipowners Association, Mr. Sola Adewunmi, stated that because of the nature of the shipping business, the impacts of the funds when disbursed might not be felt immediately.

“It’s going to bring down the cost of hiring vessels, because what they were doing before was outrageous. A vessel is not a car that you just walk around a car lot and buy, it takes a process. Even if they disburse that money in August, a lot of people might not have access to it until sometime.

“And even when you have access to it, you have to look for the vessel you are going to buy. It’s not, like I said, it’s not a car that you just go take out and buy at once. It’s not something that they will see the effect of almost immediately. I don’t have an idea of the potential percentage in reduction; I don’t want to come to what I am mentioning. But it will happen,” Adewunmi said.