$700m CVFF Set to Lower Freight Costs – Shipowners
Nigerian shipowners have expressed optimism that the long-awaited disbursement of the $700 million Cabotage Vessels Financing Fund (CVFF) will significantly reduce freight costs across the country’s maritime sector.
In separate interviews with maritime industry leaders said the fund—intended to support indigenous ship acquisition and ownership—could unlock lower operating costs, job creation, and broader economic benefits, even though its impact may not be immediate.
Shipowners Ready to Meet Criteria
President of the Nigerian Chamber of Shipping, Mr. Aminu Umar, said many Nigerian shipowners are well-positioned to meet the requirements for accessing the fund, although not all may qualify.
“I am sure that there are shipowners who will meet the criteria. But whether all shipowners will meet them, I don’t think it’s possible,” he stated. “Still, a substantial number of owners will qualify.”
Umar explained that access to the fund will enable Nigerian operators to acquire vessels, increasing local participation in cargo transportation within Nigeria and across the West African sub-region.
“It will bring jobs, wealth, and generate revenue for the country. More importantly, because these ships will be Nigerian-owned, there will be more flexibility in freight charges compared to foreign operators,” he said.
He added that this could lower freight costs or introduce flexibility in payment terms, especially regarding foreign exchange—a critical concern for importers.
However, Umar noted that the extent of cost reduction would depend on various factors including cargo destination and prevailing market conditions, making it difficult to quantify the impact in advance.
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A Long-Term Process, Not an Instant Fix
Also weighing in, President of the Nigerian Indigenous Shipowners Association (NISA), Mr. Sola Adewunmi, said that while the CVFF will bring down the cost of hiring vessels, it will not yield immediate results due to the complex nature of ship acquisition.
“A vessel is not a car you can just walk into a showroom and purchase. Even after disbursement, it will take time for operators to access the funds and procure suitable vessels,” he explained.
Adewunmi added that although he could not specify the percentage reduction in freight costs, the sector should expect gradual but positive changes once the fund begins to translate into vessel acquisitions and increased indigenous shipping capacity.
“The impact may not be felt in the short term, but over time, it will bring down costs and reshape the dynamics of the industry,” he said.
