Former NIMASA boss explains how currency choices eroded the Cabotage Vessel Financing Fund value.
The $700 million Cabotage Vessel Financing Fund, known as the CVFF, was converted into naira rather than held in dollars, according to a recent disclosure by a former head of the maritime regulatory agency.
Speaking in Apapa, Lagos, former NIMASA Director-General Temisan Omatseye explained that the financial strategy exposed the maritime fund to significant exchange rate depreciation over time.
The policy decision aimed to capture high domestic interest rates, but subsequent currency devaluation drastically altered the actual worth of the marine support pool, according to information published by The Sun Nigeria.
High Domestic Interest Rates Driven Policy
During the 2026 Annual Summit of the Shipping Correspondents Association of Nigeria, Temisan Omatseye served as chairman of the event. The gathering focused on low-risk capital for indigenous shipowners and overcoming financial bottlenecks.
He noted that domestic interest rates stood between 23 and 25 percent at the time. In contrast, international dollar investments offered meager returns of just one to two percent, motivating the local currency conversion.
Monthly Sweeps And Naira Conversion
The management practice involved sweeping monthly dollar receipts from the three percent CVFF levy and automatically changing them into naira. This placed all accumulated funds into local currency accounts.
Because the conversion occurred at prevailing exchange rates, the former chief emphasized that the historic $700 million valuation from 2019 cannot be assumed to equal the same amount today.
Impact Of The 2023 Naira Depreciation
The financial arrangement functioned effectively while local interest yields remained high. However, the severe depreciation of the naira in 2023 fundamentally changed the equation for the maritime fund.
Stakeholders must now distinguish between historical dollar figures and the actual naira balance calculated at current exchange rates to determine the true worth available for disbursement.
Equipping Indigenous Shipowners For Growth
The CVFF remains a critical maritime financing scheme designed to help indigenous shipowners acquire vessels. Enhanced fleet capacity allows local operators to expand participation in coastal and inland shipping trade.
Transparency regarding accounting practices, interest earned, and currency exposure remains vital for qualified operators seeking long-term funding to create jobs and boost maritime security.
Frequently Asked Questions
What is the Cabotage Vessel Financing Fund CVFF?
The CVFF is a Nigerian maritime financing scheme established to support indigenous shipowners in acquiring vessels and increasing local participation in coastal shipping.
Why was the 700 million dollar fund converted to naira?
Former NIMASA Director-General Temisan Omatseye stated the conversion aimed to capture higher domestic interest rates of 23 to 25 percent instead of international dollar yields.
How did naira depreciation affect the CVFF value?
The 2023 depreciation of the naira eroded the dollar-equivalent value, meaning the original $700 million valuation no longer matches the current naira-denominated balance.
Who manages the CVFF in Nigeria?
The Nigerian Maritime Administration and Safety Agency, known as NIMASA, regulates indigenous shipping and oversees the administration of the maritime fund.
