The Nigerian Association of Master Mariners (NAMM) has stated that banks operating in Nigeria currently lack the financial capacity to support the growth of the local shipping industry, emphasizing the need to explore alternative vessel financing options within the country.
During the latest quarterly meeting of NAMM at its Secretariat in Lagos, former Minister of State for Interior and retired Ship Captain, Mr. Emmanuel Ihenacho, highlighted that the methods employed by Nigerian banks for vessel financing are outdated compared to global standards.
Ihenacho noted that the interest rates charged by Nigerian banks for vessel purchases are among the highest worldwide. He stressed that until these rates are lowered, local ship operators will continue to seek alternative funding sources for vessel acquisitions.
He pointed out that, in addition to limited access to funding, local ship operators face challenges such as short loan tenors, stringent collateral requirements, banks’ risk perceptions, limited shipping finance expertise, corruption, bureaucratic hurdles, and foreign exchange fluctuations.
Ihenacho also remarked that the local shipping industry and Nigeria’s coastal trade are predominantly controlled by foreign entities, which limits opportunities for indigenous players.
He recommended that the government leverage the Cabotage Act to address the issues and challenges facing the indigenous shipping industry. He also urged the Nigerian Maritime Administration and Safety Agency to enhance its Cabotage compliance efforts.
“In terms of economic losses, the country has been losing and continues to lose significant revenue and jobs due to the absence of a robust indigenous shipping industry,” he said. “If we had control of our own shipping and participated in the movement of goods, we could negotiate the freight rates for our cargoes. However, we remain dependent on foreign vessels for our international trade.”
