The federal government is making plans to end a decades-old waiver that allowed foreign-owned, foreign-crewed, or foreign-built vessels to operate in Nigerian waters.
The waiver is a clause under the Nigeria’s Coastal and Inland Shipping Act of 2003, also known as the Cabotage Act, which restricts domestic coastal shipping to vessels owned, crewed, built in Nigeria. However, waivers were issued to allow a vessel that isn’t fully owned by Nigerian to operate in the country when local capacity is deemed insufficient.
The waivers were meant to be temporary, but they became a long-standing practice that consequentially towered over the growth of indigenous shipping firms.
“The era of indiscriminate waivers is coming to an end,” Adegboyega Oyetola, minister of marine and blue economy, said during a delegation from NNPC Shipping, Stena Bulk, and Caverton Offshore Support Group at the Ministry in Abuja.
“We cannot continue to undermine our local capacity under the guise of temporary foreign intervention,” the minister said. He said lifting the waiver would build Nigerian tonnage, create local employment and give indigenous operators a fair chance to thrive. “That is the only sustainable path to maritime development.” he said.
But it is not all talk for Oyetola. His resolve trails a formal unveiling of Unity Shipping World (USW), a newly formed joint venture by NNPC Shipping, Stena Bulk, and Caverton Offshore Support Group.
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This alliance will seek to establish a tanker operation capable of transporting crude oil, refined products and LNG withing Nigeria, including within and out the West African region.
Bode Makanjuola, who leads Caverton Offshore Support Group as CEO, said the newly formed Unity Shipping World (USW) will train and empower Nigerian seafarers and focus on building a modern fleet, acquiring both new and existing vessels, and optimising cost and operational efficiency.
“It combines local expertise with international best practices to create a maritime powerhouse,” he said.
Panos Gliatis, managing director of NNPC Shipping anticipates increased domestic refining, imports and exports, which he said could improve “Nigeria’s pivotal role in global energy logistics.”
The final man in the partnership sees a win for his company’s expansion plans. Erik Hånell, president of Stena Bulk, one of the world’s leading players in the tanker industry, said the company is committed to “expanding into key energy markets,” like Nigeria’s, describing its involvement as a “long-term strategy” to advance Nigeria’s energy and shipping scene.
The partnership could be one of many after Oyetola directed the Nigerian Maritime Administration and Safety Agency (NIMASA) to immediately commence the procedures leading to the disbursement of the Cabotage Vessel Financing Fund (CVFF) in August this year.
The $700 million fund equally designed under the Cabotage Act to support Nigerian shipping companies with access to structured credit for vessel acquisition, was stalled for several yeats despite contributions in billions of naira from shipowners.
Eligible Nigerian shipping companies can access up to $25 million each at competitive interest rates to acquire vessels that meet global safety and performance standards.
“The disbursement of the CVFF is no longer optional, it is imperative,” Oyetola stated. “Our indigenous operators must be empowered to acquire modern vessels and effectively render services that have, for too long, been dominated by foreign shipping concerns.”
The minister iterated plans to launch a national shipping line through a public-private partnership model, which he said would make Nigeria a regional force in maritime logistics.
Discussions have reached a fever pitch as bill to amend the Act passed third reading at the Nigerian House of Representatives.
The House of Representatives has taken steps to strengthen Nigeria’s shipping sector with a proposed amendment to the Coastal and Inland Shipping (Cabotage) Act, 2003 to restrict operations of foreign vessels in domestic coastal activities.
The bill, titled: “A Bill for an Act to Amend the Coastal and Inland Shipping (Cabotage) Act, No. 5, 2003” seeks to restrict “the use of foreign vessels in domestic coastal and inland commercial activities” and “promote the development of indigenous tonnage.”
Julius Ihonvbere, who led the debate, decried that foreign vessels were invading Nigeria’s coastal waters and had been exploiting the country’s marine resources for years.
He also criticised foreign vessels for failing to build the capacity of local shippers, who, he claimed, had long complained about being sidelined.
The proposed legislation, if successful will limit foreign involvement in Nigeria’s coastal and inland shipping and “encouraging greater participation by indigenous operators.”
