By Steve Agbota
Nigeria’s vast maritime sector holds untapped potential to drive economic growth and reduce capital flight.
According to experts, with the effective implementation of the Cabotage Act, the country has a unique opportunity to reclaim control of its coastal trade, empower local operators and save billions of dollars lost annually to foreign shipping interests. It is conservatively put at $9 billion annually.
The Act, intended to boost the local shipping industry and create jobs, has been hit with poor implementation and a lack of inter-agency collaboration. The negligence allows foreign vessels to dominate the nation’s coastal trade and snatch contracts that should naturally be reserved for local players.
But they are weak and fragmented and offshore interests, powered by influential government collaborators, continue to relish juicy deals and rob the country greatly.
The Cabotage Act, enacted in 2003, aims to promote the development of indigenous tonnage and restrict the use of foreign vessels in domestic coastal trade, with four pillars that give exclusive control and operations of domestic shipping to Nigerians.
However, Daily Sun learnt that these four pillars stated that; “vessels must be built in Nigeria, vessels must be registered in Nigeria, vessels must be wholly manned by Nigerians, vessels must be wholly owned by Nigerians.”
The Act was enacted by the National Assembly to assist in promoting the development of indigenous tonnage and establish a vessel financing fund. The Act was introduced to stimulate, empower and reposition indigenous shipping companies for active participation in the Sub-Saharan shipping activities.
But after 22 years of the enactment of the law, the shipping trade is still largely dominated by foreign-owned vessels. This undermines the goal of fostering a robust Nigerian shipping industry.
Experts argued that one of the hindrances to caging indigenous ship owners was the high duty on the importation of vessels. This has made it difficult to acquire vessels by indigenous ship owners and hampered the growth of the local fleet.
Daily Sun also learnt that the Act empowers Nigerian seafarers to operate on vessels in the nation’s coastal waters but foreign seafarers are still being employed on vessels operating in Nigerian waters, often smuggled in through neighbouring countries of Benin, Republic, Togo and Ghana.
Meanwhile, local ship owners lamented that a major obstacle to effective implementation of the Act is the lack of coordination between government agencies, like the Nigerian Maritime Administration and Safety Agency (NIMASA), the Customs, and other relevant bodies.
Stakeholders said that if the Act is effectively implemented, between 2026 and 2030, Nigeria will save over $45 billion while the Cabotage Vessel Financing Fund (CVFF) should be disbursed promptly to qualified Nigerian shipowners to facilitate the growth of the local fleet.
Speaking with Daily Sun, an expert and a lecturer at the Maritime University, Charles Okerefe, said the truth is that, almost 20 years after, the Carbondale Act is not really being implemented, saying that it does not go with the spirit of the letters of the Act.
According to him, take the issue of the letters of the Act, for instance, the issue of waivers that was supposed to last for only about five years from the beginning of the Cabotage Act, but it’s still there.
“So, what we find out is that, together with the lack of disbursement of the Cabotage funds, indigenous players are not able to purchase the type of vessels they need to be able to operate locally. So, the foreigners still dominate. That is a sad reality.
“And of course, that is definitely not good for the Nigerian maritime trade, especially the Cabotage trade, because the intention was for it, for the business of the domicile with indigenous players. That was why the Act was enacted in the first place,” he said.
But as it is, he said the indigenous players are still being shortchanged, and they cannot really come out to play the role they were supposed to play, adding that the lack of disbursement of the Cabotage Vessel Financing Fund is a major setback, urging the government to up their game.
“It’s not enough to say they are prepared to disburse the funds. What are the critical milestones they have put in place to achieve that? It’s a major question that NIMASA and the Ministry of the Economy will have to answer.
“So, going forward, I think the government needs to rethink those things that are slowing down the implementation of the Act, so that Nigerian indigenous players can come in strongly to take their pride of place,” he said.
However, the Chairman of the Nigerian Ports Consultative Council (NPCC), Bolaji Sumola, said that Nigeria is losing a staggering $9 billion annually due to the under-enforcement of the Cabotage Act, describing the situation as an economic and patriotic emergency.
He urged the Ministry to establish a dedicated port sector blue economy task force to address this challenge and bring about needed port reforms.
According to him, the proposed task force would pilot reforms across both Western and Eastern ports, emphasising that the time for analysis is over. He noted that beyond the losses from the Cabotage Act under-enforcement, Nigeria’s ports continue to suffer from unacceptably high cargo dwell times, a major deterrent to trade and a direct cost to the economy.
He advocated digital reforms, robust port community systems, and continuous Customs modernisation to bring the times down to acceptable international standards.
“Every hour saved at our ports brings us closer to global competitiveness. We must intensify our commitment to local content enforcement.
Nigeria loses over $9 billion annually due to under-enforcement of the Cabotage Act. This is an economic and patriotic emergency. Our ports must prioritise indigenous participation in shipping, terminal operations, and maritime services.
“We must ensure that upgraded and modernised infrastructures are smart, green, and accessible. We also need to ensure that our inner connectivity by rail, water, and road is seamless to avoid the congestion trap of the past.
“We must invest in people. Our young people, our dock workers and seafarers, our marine professionals. The policy must translate into skills development, scholarship, apprenticeship, and new career paths in logistics, digital operations, and human capital will define the future of our ports.
“Our environmental standards must rise to or surpass global expectations. We can no longer afford oil spills, plastic pollution, or illegal dumping. Our ports must be certified and aligned with secular economic principles.
“Furthermore, we must fix our governance framework. Duplication of agencies, overlapping mandates, and a manual clearance process must give way to a unified, efficient, and accountable system. Government agencies must lead the charge towards a single-window 24-7 port community,” he explained.
Speaking with Daily Sun, Gbenga Leke Oyewole, a seasoned maritime security expert and former Senior Special Assistant on Maritime Services to ex-President Goodluck, said that the implication on the economy is very straightforward, and that is money that ought to be earned by the government that is not in the government coffers.
“And that simply means that there will be positive revenue to the government, and it will also shortchange the government in making project decisions and doing whatever they plan to do with the money. The indirect part of it, I will simply want to give a lot of kudos to this administration. They have taken steps that will proactively tackle that menace.
“It is not only in the Cabotage, even other revenue lines in the maritime sector. Most of them are not optimally collected. And the reasons are very simple. It’s either that the payers are not willing to pay or that the collectors are compromised. You know, a lot of things happen. I used to say long ago that the synonym for maritime business is fraud.
“Because you buy a ship, you give it to somebody to go out there to fish. It will catch fish and sell them to foreigners out there.
And when it’s tired, it will come back with your ship with any little fish, you still have remaining on board.
You buy a tanker, all the ROBs on board belong to the workers on board and a lot of different things.
“So, to tackle this menace, I’ve said it so many times, that it is just the use of technology. And in addition to that use of technology, let there be very strong inter-agency collaboration. But the government has gone another step forward by creating this NRS, where all revenues will be governed by effective technology and also under a very seamless inter-agency collaboration.
According to him, there is no way that NMASA, NPA or any of the other agencies or Customs will be paying directly to NRS without appropriate synergy. Which will not be human synergy this time around.
“It’s going to be electronic synergy. In which case, what you don’t say, other people have seen it. What you have not reported, other people notice that it happened. What you have not talked about, the system will download it for every other person to see. So, it’s either you are working or you are not working. That is what America operates,” he said.