Nigeria Risks Losing Shipping Value Chain As Foreign Operators Capture Growing Trade

By Olumide Johnson 

Stakeholders in Nigeria’s shipping industry are warning that the country could lose a growing share of its maritime economic value to foreign operators unless indigenous players develop the capacity to participate across the entire shipping value chain. The warning came amid the commencement of applications for the Cabotage Vessel Financing Fund (CVFF).

DEVELOPMENT:

Speaking at the Nigeria Chamber of Shipping (NCS) Members’ Evening in Lagos, Group Vice President, Oil, Gas and Fertiliser, Dangote Industries Limited, Edwin Devakumar, said that Nigeria must move beyond vessel acquisition and develop the competencies required across the international shipping value chain.

He argued that vessel acquisition should be linked to cargo availability and a broader shipping business ecosystem capable of retaining economic value locally.

“The Cabotage Vessel Financing Fund scheme can help to check whether the vessel owners are linked up with the cargo owners, whether they just have vessels or whether they are building up a whole management scheme to support and operate the business. So, it’s not just about one more cargo but more of a shift to build up the whole system,” Devakumar said.

DATA:

The financing challenge is particularly significant for large vessels serving major industrial cargoes. The President of NCS, Aminu Umar, said that vessels required by Dangote Refinery for crude oil imports require investment running into hundreds of millions of dollars.

“The capital requirement to acquire them is huge, and it is very difficult for we to get that access in our system. Even with the CVFF, we cannot buy those size of vessels. They are in hundreds of millions of dollars. So, it’s not possible as the CVFF is already limited to $25 million per ticket,” Umar said.

SIGNIFICANCE:

The debate goes beyond ship ownership. Without indigenous vessel operators, cargo owners, ship managers, financiers and other maritime service providers developing together, Nigeria risks remaining a market that generates shipping demand but exports the associated economic value.

For investors, the opportunity is substantial, particularly as international trade and industrial activity expand. But financing structures must match the scale and economics of modern shipping assets.

NEXT MOVE:

The immediate focus is how the CVFF will be deployed and whether its structure can catalyse broader private-sector financing rather than merely fund individual vessel purchases.

The industry should also watch the development of cargo-linked shipping businesses capable of serving major Nigerian industrial operators.

OUR LENS:

Founding President of the NCS, Dr. Olisa Agbakoba, said that government should focus on creating the conditions for private capital rather than attempting to become the industry’s financier.

“The role of the government is not to give loans because they cannot sustain it. They can create the environment and the funds will be generated. That link between cargo and vessel ownership is very important. Otherwise, we would continue to be a cargoless, vesselless county. Others would continue to come and take our cargo,” Agbakoba said.

The deeper issue is therefore not whether Nigeria owns more ships, but whether it can build a complete maritime ecosystem around the cargo it generates. Without that shift, rising shipping traffic could translate into rising opportunities for foreigners rather than stronger domestic value creation.

Olumide Johnson is a journalist, reporting on energy, business, markets, policy and developments shaping Nigeria’s economy.