Indigenous shippers fight for stake in coastal business

Indigenous Shippers Fight for Stake in Nigeria’s Coastal Business

Overview of Nigeria’s Coastal Trade

Indigenous shippers fight for stake in coastal business – Nigeria’s coastal trade is a lucrative industry with immense potential, yet indigenous shippers face significant challenges in securing their stake. Despite being endowed with vast coastal resources and a thriving blue economy, Nigeria’s indigenous shipowners struggle to compete with foreign counterparts who dominate the market. This has led to significant capital flight, stunting the growth of the nation’s maritime sector. Indigenous shipowners are now pushing for greater inclusion and support from the government to reverse these trends.

Challenges Facing Indigenous Shippers

One of the primary hurdles for indigenous shippers is access to affordable financing. The Cabotage Vessel Financing Fund (CVFF), established under the Cabotage Act of 2004, was intended to support local shipowners in acquiring vessels. However, disbursement of these funds has been marred by delays and inefficiencies. Despite approval by former President Muhammadu Buhari, the funds remain largely inaccessible to those who need them most. This lack of financial support has made it difficult for indigenous shippers to expand their fleets and compete effectively.

Moreover, the high cost of borrowing from Nigerian banks adds to the woes of local shipowners. Unlike foreign competitors who can access loans at lower interest rates, Nigerian shippers face exorbitant rates and stringent conditions. This has further hampered the growth of the indigenous shipping industry, leaving it vulnerable to foreign domination.

Government Initiatives and the Way Forward

The Nigerian government, through agencies like the Nigerian Maritime Administration and Safety Agency (NIMASA), has introduced several initiatives to support indigenous shippers. These include monetary incentives such as zero duty for new vessels and access to forex at the official rate for ship acquisition. However, the uptake of these incentives has been slow, with many shipowners yet to fully exploit the opportunities available to them.

To bolster the participation of indigenous shippers in coastal trade, the government must ensure the prompt and transparent disbursement of the CVFF. This would enable local shipowners to acquire modern vessels, thereby enhancing their competitiveness. Additionally, the government should address the issue of high-interest rates by working with financial institutions to provide more favorable loan terms for shipping investments.

The Impact of Indigenous Participation on Nigeria’s Economy

The inclusion of indigenous shippers in Nigeria’s coastal trade could have far-reaching benefits for the economy. By reducing reliance on foreign-owned vessels, Nigeria can retain more revenue within the country, boosting government income and creating jobs. Indigenous shipowners have the potential to generate over N11 trillion annually from coastal trade if given the necessary support and resources.

Furthermore, increased participation of local players in the maritime sector would enhance the country’s capacity to manage its coastal and inland waterways effectively. This, in turn, would reduce the risk of external threats and ensure greater security on Nigeria’s waters.

Conclusion

The fight for a stake in Nigeria’s coastal business is a critical issue for indigenous shippers. While the challenges are significant, the potential rewards are even greater. By addressing the financial and regulatory barriers that hinder local participation, Nigeria can unlock the full potential of its blue economy. This will not only empower indigenous shipowners but also contribute to the nation’s economic growth and development.