Nigeria loses $9b annually to foreign vessels
Nigeria is losing an estimated $8–$9 billion annually to foreign shipping lines due to its absence in international maritime trade, industry stakeholders have warned. They called for urgent policy reforms
- By Afiong Edemumoh
Nigeria is losing an estimated $8–$9 billion annually to foreign shipping lines due to its absence in international maritime trade, industry stakeholders have warned.
They called for urgent policy reforms and stronger inter-agency coordination to reverse the trend during a stakeholders engagement organised by the Ministry of Marine and Blue Economy.
Despite being Africa’s largest trading economy by population and cargo volume, the country, they argued, currently lacks a meaningful presence in global shipping, leaving foreign vessels to dominate the movement of both imports and exports.
Chairman/CEO of Starzs Investments Company Limited, Greg Ogbeifun, said Nigeria’s continued dependence on foreign vessels represents a structural economic loss that must be urgently addressed.
He noted that while the country has invested in port modernisation, it has failed to develop a corresponding national fleet to participate in global trade.
According to him: “Every day of inaction compounds a structural loss that leads to billions. Approximately eight to nine billion dollars are lost by our country to foreign ships that carry our cargo.”
Ogbeifun stressed that Nigeria’s large population and high cargo throughput justify a return to international shipping, similar to what existed about three decades ago when Nigerian-flagged vessels actively participated in global trade.
He, however, identified a major policy bottleneck hindering indigenous participation, particularly in accessing national carrier status. He explained that current regulatory requirements compel operators to own vessels before being granted carrier status, an impractical condition given the absence of guaranteed cargo.
Read Also: Tinubu inaugurates iconic projects in Lagos
“To get a ship, you need to know the cargo you will carry. But without cargo assurance, no investor will commit to acquiring a vessel,” he said.
To resolve this, Ogbeifun proposed that government should designate specific import and export cargoes for Nigerian operators and issue letters of intent to qualified companies.
This, he said, would enable them to secure financing and acquire vessels based on confirmed trade opportunities.
He also called for the use of the Cabotage Vessel Financing Fund (CVFF) as a form of sovereign guarantee rather than direct funding, to support Nigerian shipowners in accessing international credit for vessel acquisition.
Beyond financing, he highlighted fiscal constraints as a major barrier, noting that Nigerian operators pay up to 14 per cent import duty on vessels, while foreign competitors pay significantly less, making local participation uncompetitive.
Ogbeifun advocated zero import duty on ships owned and registered by Nigerians, aligning with global best practices to boost indigenous shipping capacity. He emphasised that Nigeria does not lack maritime policies but suffers from weak implementation, urging stronger political will to drive execution under the National Policy on Marine and Blue Economy.
The shipping executive also distinguished between a national carrier and a national fleet, stressing that Nigeria should focus on building a broad-based fleet of multiple operators rather than a single national shipping line.
“If we have a national fleet, government can mobilise Nigerian vessels in times of crisis to move cargo. We saw during COVID-19 that we had no ships to fall back on,” he said.
He further called for international partnerships to include mandatory collaboration with Nigerian companies, particularly in shipbuilding, repairs, and manpower development, to ensure local capacity growth.
Complementing these concerns, Manager of the Central Results Delivery Coordination Unit (CRDCU), Ismail Okunola, underscored the critical role of inter-agency collaboration in unlocking the full potential of Nigeria’s marine and blue economy.
Speaking on the implementation of the National Policy on Marine and Blue Economy (2025–2035), Okunola described the sector as a key driver of economic diversification, covering fisheries, maritime transport, tourism, offshore energy, and biotechnology.
He noted that the policy outlines a 10-year roadmap with over 200 strategic initiatives aimed at boosting economic growth, environmental sustainability, and job creation.
However, he identified coordination challenges among multiple government agencies as a major impediment to efficiency, citing overlapping functions, multiple inspections, poor information sharing, and institutional rivalries.
“These inefficiencies increase the cost of doing business at the ports and slow down cargo clearance, ultimately affecting trade competitiveness,” he said.
Okunola emphasised that improved collaboration could significantly enhance maritime security, revenue generation, and trade facilitation.
He highlighted the success of the Deep Blue Project, formally known as the Integrated National Security and Waterways Protection Infrastructure, as a model of effective inter-agency synergy.
The project, involving the Nigerian Navy, Air Force, Police, and other security agencies, has helped eliminate piracy incidents in Nigerian waters since 2021 through coordinated surveillance and enforcement.
According to him, “This achievement shows that when agencies work together under a unified framework, results can be transformative.”
He recommended the establishment of a central coordinating body for port operations, joint inspections, integrated ICT systems such as the National Single Window, and regular inter-agency engagement to improve efficiency.
Okunola also stressed the importance of aligning all maritime policies with the national blue economy framework to avoid conflicts and duplication.
Both speakers agreed that Nigeria’s marine and blue economy holds vast potential for trade expansion, food security, and economic diversification, but warned that without deliberate action, the country will continue to lose value to foreign operators.
They concluded that a combination of policy reforms, fiscal incentives, indigenous capacity development, and institutional collaboration is essential to reposition Nigeria as a competitive player in global maritime trade.
