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By Steve Agbota, [email protected]
From experts’ perspectives, the story of Nigeria’s maritime sector is a sad one. The paradox of immense maritime potential juxtaposed with frightening economic stagnation highlights the nation’s struggle to fully harness its rich sea-bound resources.
Nigeria’s extensive maritime resources, including an 853-kilometer coastline along the Atlantic and an exclusive economic zone stretching over 200 nautical miles, present a wealth of opportunity.
However, the nation has yet to fully capitalise on these assets, particularly in vessel financing and construction. The absence of effective national policies and substantial private sector investment has hindered Nigeria’s ability to compete on the global maritime stage.
Indigenous shipping companies face ongoing challenges in securing financing for vessel acquisitions, resulting in substantial financial losses to foreign competitors. The lack of clear, strategic policies has stunted Nigeria’s progress in shipbuilding, repairs, and dry docking, slowing the development of its blue economy.
Globally, vessel financing is a major financial sector, with significant investment flowing into ship acquisition and construction. In 2023, the top 40 banks lent $284.27 billion to the shipping industry, with total global lending reaching approximately $375 billion. The Petrofin Index estimates global ship finance, including leasing and export finance, at around $600 billion. This underscores the essential role of financial institutions in supporting global maritime operations.
Nigerian banks, however, face limitations in supporting local shipping growth due to high interest rates and outdated financing methods. To unlock the full potential of Nigeria’s maritime sector, there is a pressing need for innovative financing solutions and robust national policies.
At a recent forum hosted by the Association of Maritime Journalists of Nigeria, experts and stakeholders underscored the necessity for comprehensive policies and increased private sector investment to address the challenges of vessel financing. A strategic approach to financing could significantly enhance Nigeria’s maritime industry, positioning it as a global competitor.
Abdulkadir Ahmed, Managing Director and CEO of NLNG Shipping and Marine Services Limited, emphasized the importance of adhering to international standards for ship quality and safety. He noted that access to financing is crucial for both vessel acquisition and construction, and understanding the evolving maritime dynamics is key to success.
Barr. Pius Ukeyima Akutah, Executive Secretary of the Nigerian Shippers’ Council, highlighted the role of the blue economy in global trade, which accounts for 90 per cent of international trade and contributes to 70 per cent of global trade revenue. He called for expanded financial support mechanisms, such as the Shipping Sector Support Fund and the Cabotage Vessel Financing Fund, to maximize Nigeria’s maritime resources and drive economic development.
Dr. Dayo Mobereola, Director General of the Nigerian Maritime Administration and Safety Agency (NIMASA), reiterated the economic importance of shipping and the need for a renewed focus on vessel acquisition and construction. Represented by NIMASA’s Director of Administration and Human Resources, Mr. Isichei Osamgbi, Mobereola stressed the strategic significance of fleet ownership for enhancing Nigeria’s economic position and creating job opportunities.
Charles Okorefe, Advisory Head/CEO of Kamany Marine Services Limited, criticized the short-term investment strategies of Nigerian banks, which do not support long-term shipbuilding projects. He called for efforts to better communicate the benefits of shipping finance and encourage more substantial investments.
To transform Nigeria’s maritime sector and fully realize its blue economy potential, targeted investments, strategic policies, and innovative financing solutions are essential. By addressing these challenges, Nigeria can leverage its maritime assets to drive economic growth and establish itself as a key player in the global shipping industry.
