A Review of the Nigerian Energy Industry

Indians, Greeks take over Nigeria’s coastal shipping

13 September 2015, Lagos – The coastal shipping business in Nigeria has been taken over by foreigners, especially Indians, Greeks and Lebanese. This is contrary to the tenets of the Coastal and Inland Shipping Act (Cabotage), findings by SUNDAY PUNCH have shown.


It was learnt that the main objective of the Act was to reserve the commercial transportation of goods and services within the Nigerian coastal and inland waters for vessels flying the country’s flag and those owned by Nigerian citizens.

A former Minister of Interior and Master Mariner, Captain Emmanuel Ihenacho, lamented the dominance of the business by foreigners, describing it as an unfortunate thing that needed to be speedily addressed.

He said, “Before I lost my tanker fleet, I used to run small tankers on our coast. I now run a shipping business and I get my tankers predominantly from Indians. Coastal shipping is now exclusively in the hands of Indians, Greeks and Lebanese; Nigerians are completely out of it.

“It is unfortunate and the Nigerian Maritime Administration and Safety Agency is doing nothing about it. I spent N1bn last month buying freight from Indian ship operators. This is money leaving the country.

“If those ships had been owned by Nigerians, the money would have remained in the country. I fought for the cabotage law, but now we have a situation where we buy freight from foreigners. NIMASA is not looking at statistics. This is a bounty and Nigerians are not reaping from it.”

The Publicity Secretary of the Nigerian Indigenous Shipowners Association, Mr. Emmanuel Ilori, recalled that the domination of foreigners in the country’s coastal waters started since the demise of the National Shipping Line.

He said although indigenous shipowners had made efforts to fill the vacuum, the foreign firms, in collaboration with the international oil companies, did not favour Nigerian shipowners.

Ilori said, “Over the years, Nigerian shipowners have discussed with the government, the Nigerian National Petroleum Corporation, the IOCs and NIMASA to change the situation, but there are other challenges.

“First, when we bought our vessels to start coastal shipping, there were financial issues. The foreign operators, who had easier access to funds, were at an advantage because borrowing in Nigeria had been very high. As a result, they were able to compete at a better price than indigenous shipowners.

“On the other hand, because we were not getting jobs, our ships began to deteriorate. So, the oil companies could now use the excuse that our ships were not up to standard and so we should not be given jobs. It is a vicious circle.”

Ihenacho also lamented NIMASA’s inability to empower indigenous shipowners over the years with the Cabotage Vessel Financing Fund. He attributed this to the shift in focus concerning NIMASA’s objectives.

He said, “Some of us gave proper definition to the cabotage; myself, Olisa Agbakoba and Mike Igbokwe. We organised seminars and conferences in which we told people what cabotage is. But till date, we get the impression that people do not understand what cabotage is and how it differs from ordinary shipping.

“All the things we have talked about are in relation to cabotage; setting up a special fund from which local operators can borrow so that they can buy new ships. The funds were set up but no one can see who has benefitted.

“Perhaps NIMASA was unable to push for it because people did not see the organisation as a technical one to ensure safety of shipping, but as a money-making organisation. This was not the intention but that seems to be the emphasis now.”

Ilori said all that was required was the political will to enforce the cabotage regime as coastal operation in indigenous waters was the exclusive preserve of Nigerian shipowners.

Ilori said shipowners would be able to get jobs once the cabotage regime was enforced in terms of the trade.

He added that there were sufficient vessels owned by indigenous shipowners, capable of participating in the coastal trade.

He said enforcement of the cabotage regime would help stimulate the economy.

Speaking in the same vein, Ihenacho called on the government to ensure that a proper policy for shipping was formulated so as to achieve its set objectives.

He said, “NIMASA collects not only the CVFF but also the Ship Acquisition Fund and Ship Building Fund. Despite this, we haven’t made much progress in the last few years.

In the light of the new administration in power and the changes expected, there is a need to revisit the NIMASA Act and take out things that are not relevant to the development of shipping.”



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