In a recent position paper, the Sea Empowerment and Research Centre (SEREC) highlighted the significant economic costs faced by Nigeria due to the inadequate implementation of the Coastal and Inland Shipping (Cabotage) Act of 2003. Although the law aimed to enhance local maritime operations, create jobs, and retain revenue, it has fallen short, leading to an estimated annual loss of up to $100 billion. This figure stems from various sources, including freight earnings, expatriate employment costs, and capital flight within the oil and gas maritime logistics sector.
The Nigerian Maritime Administration and Safety Agency (NIMASA) has been criticized for its ineffective enforcement of the law, which has allowed foreign vessels to dominate Nigeria’s coastal shipping. According to SEREC, the legislation has been marred by economic leakages, high dependence on foreign service providers, and significant job losses across the maritime value chain.
Reports indicate that the Nigerian Ports Consultative Council (NPCC) estimates maritime revenue losses exceed $9 billion annually, while independent assessments suggest losses could be around $50 billion. These statistics highlight the urgent need for reform, as the cumulative effects of poor enforcement extend beyond financial losses to undermine national economic growth and maritime sovereignty.
Several institutional weaknesses contribute to these issues, such as inconsistent policies and political interference in waiver issuance. The flexibility of waiver clauses (Sections 9–11) has further allowed for excessive discretion in decision-making, which, combined with weak sanctions, has led to a fragmented enforcement landscape. The Cabotage Vessel Financing Fund (CVFF), crucial for promoting local ship ownership, has also suffered from management inefficiencies and delayed disbursements.
Socially, the situation is equally concerning, with thousands of local maritime jobs lost to expatriates. The dominance of foreign operators has stifled the competitiveness of Nigerian maritime firms, eroding the nation’s maritime sovereignty and impacting related sectors such as shipbuilding, insurance, and marine logistics.
To address these challenges, SEREC recommends a series of legislative and institutional reforms. These include amending the Cabotage Act to close existing waiver loopholes, enhancing transparency, and implementing stiffer penalties for violations. Establishing a specialized Cabotage Compliance Tribunal is also suggested to expedite enforcement and ensure accountability.
Furthermore, SEREC calls upon the government to modernize NIMASA with advanced vessel tracking systems and to improve inter-agency cooperation among maritime entities. Investment in local shipbuilding and seafarer training should be incentivized as part of a broader strategy to reclaim economic sovereignty and restore Nigeria’s maritime dignity.
Ultimately, the paper emphasizes the necessity of political will in revitalizing the Cabotage regime. For Nigeria to truly prioritize its maritime economic sovereignty, there must be a concerted and policy-driven commitment to reclaim the substantial financial losses and empower indigenous operators. As such, the Cabotage Act, despite its potential, needs urgent and effective execution to align with the nation’s growth and security objectives.
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