A former Director-General of the Nigerian Maritime Administration and Safety Agency, Temisan Omatseye, has defended the conversion of the dollar-denominated Cabotage Vessel Financing Fund into naira during his tenure, stating that NIMASA had N52bn in fixed deposits when he left office in December 2010.
Omatseye explained that the N52bn comprised both the CVFF and the maritime fund, adding that the conversion of dollar-denominated funds into naira was carried out on the directive of the Accountant-General of the Federation.
In a statement on Sunday, Omatseye stated this against the backdrop of his recent remarks that the Accountant-General’s office had advised the conversion of the CVFF into naira.
According to him, “the decision to convert the funds was based on the interest rates offered by commercial banks on naira and dollar deposits at the time.”
He said, “The agency was directed to convert all foreign-denominated internally generated revenue, including the three per cent surcharge and the CVFF, into naira and place the funds in naira fixed deposits.”
He explained that when he assumed office as NIMASA DG in 2009, the agency’s funds, including the CVFF and the three per cent surcharge, were held in commercial banks.
“Several banks were appointed as collection banks, from which funds were transferred to designated naira and dollar accounts on the 23rd of every month. By virtue of a memo from the Accountant-General’s office, the agency was directed to change all foreign internally generated revenue, be it three per cent or CVFF, into naira and fix it in naira,” he said.
Omatseye said he was informed that dollar deposits attracted interest rates of between one and two per cent, while naira deposits earned upwards of 15 per cent.
He said the directive therefore made financial sense, adding that the practice continued until he left office.
“I was explaining to the audience what had transpired during my tenure,” he said.
Omatseye maintained that all dollar funds received as CVFF during his tenure were converted into naira, insisting that his earlier statement was based on the practice under his administration.
He, however, said the Nigerian Maritime Administration and Safety Agency was better placed to explain how the funds had been managed since the introduction of the Treasury Single Account.
“What has been the practice since the advent of TSA is better explained by NIMASA. In the light of that, I stand fully by my statement that during my tenure all dollar funds received as CVFF were converted into naira,” Omatseye said.
Omatseye said that as of 13 December, 2010, when he left office, NIMASA had N52bn in fixed deposits, comprising the CVFF and the maritime fund.
The CVFF was established to provide financial support to Nigerian indigenous shipowners for the acquisition of vessels and development of local shipping capacity.
Meanwhile, NIMASA, in a statement on Sunday signed by its Director-General, Dr Dayo Mobereola, said the claim was incorrect and did not reflect the actual status of the CVFF.
“The attention of the management of NIMASA has been drawn to reports circulating in some sections of the media alleging that the CVFF has been converted to naira and is no longer being held in United States dollars. The reports attributed this claim to a former Director-General of NIMASA, Mr Omatseye, who reportedly alleged that the conversion was undertaken to enable the Fund to earn higher interest rates. For the avoidance of doubt, this claim is incorrect and does not reflect the actual status of the CVFF,” Mobereola said.
According to him, the revenue streams accruing to the CVFF are denominated in different currencies, adding that funds remitted in United States dollars are retained in dollars with the Central Bank of Nigeria, while contributions remitted in naira are retained in the local currency.
“There has been no conversion of the dollar-denominated component of the CVFF to naira, contrary to the allegation,” he said.
Omatseye served as the DG of NIMASA from July 2009 to December 2010.
