Following the planned disbursement of the Cabotage Vessels Financing Fund, shipowners have called for the removal of the waiver clause, adding that it should be replaced with a right of first refusal provision to ensure local shipowners have a fair opportunity to compete for contracts.
A foremost shipowner, Tunji Brown, who stated this in a recent chat with journalists in Lagos, explained that the waiver clause should be expunged because cabotage is fundamentally a home trade issue, not a foreign policy matter.
He maintained that the country has a wealth of qualified Nigerians ready to manage this business.
“The waiver clause should be expunged because cabotage is fundamentally a home trade issue, not a foreign policy matter. We have a wealth of qualified Nigerians ready to manage this business,” he said.
Brown underscored that once the waiver clause is replaced with the right of first refusal, “the balance of marine asset ownership will shift from foreign operators to indigenous shipowners.”
He clarified that Nigerian shipowners cannot advance to the commercial bidding stage without owning marine assets to present during technical bids.
Brown expressed concern over the law’s failure to provide indigenous companies with the essential financial support necessary for effective participation in Nigeria’s maritime trade.
The former Secretary General and member of the Board of the Nigerian Shipowners Association noted that changing the waiver clause to the right of first refusal provision would provide Indigenous companies with a significant advantage during bidding processes.
According to him, the disbursement of CVFF presents a pivotal opportunity to fortify the capacity of indigenous shipowners.
“It significantly elevates Nigeria’s Gross Domestic Product and creates millions of jobs for citizens across the country. The law has failed to provide Indigenous companies with the essential financial support necessary for effective participation in Nigeria’s maritime trade. Also, the inclusion of a waiver clause has been detrimental to the objective of empowering Indigenous businesses,” Brown said.
He argued that the justifications for maintaining this waiver clause no longer apply, making its removal imperative.
The shipowner reiterated that to bolster indigenous participation, the National Assembly should replace the waiver clause with a right of first refusal provision.
“This change would provide indigenous companies with a significant advantage during bidding processes and ensure that local businesses have a fair opportunity to compete for contracts,” he argued.
However, Brown criticised the current two per cent revenue NIMASA collects from every vessel docking in Nigeria, emphasising the necessity for legislative action to increase funding to enhance the development of the CVFF.
He lamented that the inability of indigenous shipowners to unite during bidding processes has left them vulnerable to competition from international firms.
“The growing number of small vessel-owning companies has also hindered Nigerians from securing contracts in the upstream oil sector,” he said
Brown stated that the cabotage initiative has been a mere facade, mainly due to collusion between certain local operators and foreign vessel owners.
“This collision has allowed foreign interests to continue dominating Nigeria’s maritime trade by temporarily importing marine assets under the waiver clause,” he said.
Brown highlighted a significant gap between market demand and local supply, identifying shipbuilding and ship repair yards as critical areas where Nigerians have yet to establish a foundation for cabotage’s success.
“Currently, marine assets operating in Nigeria are valued at over $180bn, with Nigerians owning less than 10 per cent of these assets. Most vessels in the country operate under temporary importation agreements, providing little direct economic benefit. These vessels, owned by foreign companies, are operated by foreign crews who enter Nigeria every three months on temporary work permits, bypassing local taxation and avoiding import duties,” he said.
