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‘Nigerian maritime laws crippling local investors’



‘Nigerian maritime laws crippling local investors’

Twenty-two years after the demise of the Nigerian National Shipping Line (NNSL), Nigeria has not been able to midwife another fleet as the Nigerian merchant shipping act  does not favour  local ship owners. BAYO AKOMOLAFE reports

Unfavourable policies, which have led to the collapse of indigenous shipping lines in the last two decades in Nigeria,  is yet to be reviewed by lawmakers unlike other maritime countries.

For instance, foreign vessels, which do not meet the requirements of the nation’s Cabotage Act, have  dominated Nigerian waters at the expense of Nigerian registered vessels due to  loopholes in Nigerian maritime laws.


Because of this, many ship owners have gone out of business, a situation which has led to huge loss of jobs.

Today, the tonnage of cabotage fleet in the country has diminished considerably in the last couple of years as most vessel owners can no longer meet their obligations to the financing banks.

In most cases, the ship owners said they had no option than  to go under or have their vessels repossessed by the banks, leading to loss of jobs, training opportunities and failed businesses.

According to the President of Shipowners Association of Nigeria (SOAN), Engr. Greg Ogbeifun, the only thing which could have been the saving grace was the recent Memorandum of Understanding signed  in August 2016 between the Federal Government and a Singaporean firm, Pacific International Lines (PIL), to establish a national fleet.


However, he explained in Lagos at a shipowners’ workshop and dinner that Nigeria’s tax laws had put  off the firm  from the MoU because of its unfavoufrable terms and policies.

He recalled that “PIL put it in writing that unless the tax laws were reviewed, it won’t be able to fly the Nigerian flag as planned.”

He lamented that Nigerian flagged tankers were already disadvantaged.

Also, the president said that government had failed to review the country’s tax laws and policies with a view to enhancing the growth of maritime industry as it has been done in other maritime countries.

He explained that the country had not been able to midwife the emergence of a Nigerian fleet, whether private fleet or fleet resulting from Public Private Partnership.

Ogbeifun stressed:  “This is despite the fact that 92 per cent of all import/export cargo in and out of our country is via seaborne trade.”

Also, he explained that the country’s flag administration was extremely weak to the extent that the Nigerian Liquefied Natural Gas (NLNG), which owns a large fleet trading worldwide, could not register its ships in the Nigerian flag in other to boost Nigerian tonnage.

The president said that the country lacked the political will to implement the comprehensive report and recommendations made by a committee set up by the Ministry of Transportation to study and make recommendations for the revamping and restructuring of the country’s flag administration.

Instead, Ogbeifun explained that Nigerian maritime administration was interested in  collecting levies and revenues and meting out punitive measures on stakeholders, such as arrests, threats and shutdown of ship repair yards with the accompanying consequences to the industry, which the International Maritime Communities and the IMO were observing.


The shipowners said that despite the fact that they contributed  two per cent  of their contract values to the  cabotage Vessel Financing  Fund (CVFF), most shipowners, who  approached the maritime administration  could not benefit from the fund.

He said: “Up till now, a fund that has accumulated several hundreds of millions of dollars has never been used to  finance a single vessel since its inception over 10 years ago.

He noted: “Our maritime administration has now gone into the business of acquiring a floating dock without a clear objective of what to do with it despite the need to support and grow existing shipyards in the country.

“A large number of the vessels in our maritime domain leave the country to foreign countries for their docking and ship repair needs.”

Last line

For Nigerian maritime to move forward, the Federal Government should review the existing laws impeding the growth of the industry.

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