$25m CVFF Facility Can Deliver Vessels If Backed by Trade Contracts, Says Olubowale

Captain Ladi Olubowale, former Chapter President of the African Shipowners Association (ASA), has emphasized that the $25 million Cabotage Vessel Financing Fund (CVFF) facility could be sufficient for vessel acquisition — provided it is tied to guaranteed cargo and long-term trade contracts.

Speaking at the Maritime Reporters Association of Nigeria (MARAN) Roundtable, Olubowale argued that the true measure of CVFF’s success lies not in the size of individual allocations but in whether shipowners can link financing to viable commercial opportunities.

According to him, NIMASA requires applicants to contribute about $3.7 million in equity to access the $25 million facility. However, he stressed that the critical factor is the trade the vessel will serve. “NIMASA wants you to bring out $3.7 million in order for you to be able to attract $25 million. They will now look at it in your own case. What trade will you be using that for?” he explained.

Olubowale noted that vessels are designed for specific cargo types, urging stakeholders to first identify Nigeria’s cargo volumes and match them with appropriate vessels before approving financing. He warned against acquiring ships without clear commercial demand, citing commodities like cement and dry cargo as examples where specialized vessels are required.

He maintained that a properly structured $25 million facility could enable shipowners to acquire vessels dedicated to specific trades, especially where one- or two-year cargo contracts are secured. Revenue from such contracts, he said, would provide a clear repayment path and reduce acquisition risks.

Olubowale further called for CVFF deployment as part of a broader national fleet development strategy. With an estimated $700 million currently available in the fund, he argued that Nigeria could build a diversified fleet across cargo segments if resources are strategically managed.

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

He disclosed that several banks have already approached his company with term sheets outlining financing requirements, equity contributions, and conditions — a marked improvement from past years when shipowners lamented delays in accessing the fund.

Ultimately, Olubowale insisted that CVFF must deliver measurable economic benefits by expanding Nigeria’s indigenous fleet, creating opportunities for local operators, and enabling them to capture a greater share of the nation’s maritime trade.