Shipping Experts Berate Banks, NIMASA Over Slow Pace of Cabotage Vessel Financing Disbursements

Eromosele Abiodun

Shipping experts yesterday in Lagos blamed the Nigerian Maritime Administration and Safety Agency (NIMASA) poor regulatory framework and  banks stringent conditions for the persistent delays in the cabotage vessel financing fund disbursements.

The experts, who spoke at the annual summit of the Shipping Correspondents Association of Nigeria (SCAN), said that regulatory uncertainty continues to drive up investment costs, severely discouraging long-term financial commitments needed to build a robust domestic maritime fleet.

The experts highlighted that Nigeria’s maritime sector urgently requires a stable and transparent operational framework to thrive. 

A Maritime Lawyer, Founding Partner, AOL, and former President, Nigeria Bar Association, Dr Olisa Agbakoba, said regulatory uncertainty increases investment costs and discourages long-term financing.

To restore investor confidence and unlock critical funding, Agbakoba called for consistent enforcement of maritime regulations, transparent administrative procedures, clearly defined institutional responsibilities, and a predictable system for administering applicable waivers.

Agbakoba said that without proactive intervention from the agency, indigenous operators will continue to lose lucrative opportunities in coastal trade to foreign competitors.

He emphasised the need for effective coordination between NIMASA and key government bodies, including the Federal Ministry of Marine and Blue Economy, the Nigerian Ports Authority (NPA), and the Nigerian Ports Economic Regulatory Agency (NPERA). 

He noted that only an aligned, transparent regulatory environment can ensure timely disbursements and empower local shipowners to drive the nation’s maritime economy.

Also, he stated that, “Banks and institutional investors must become active partners in developing Nigeria’s National Fleet. This requires specialized maritime credit expertise, reliable vessel valuations, technical assessments, and sound legal advice on ship mortgages, charter contracts, insurance, and cross-border enforcement.

“Financing should be tailored to each vessel’s commercial circumstances. A vessel supported by a credible long-term charter contract carries a different risk profile from one dependent on uncertain spot-market earnings.

“Commercial banks, development finance institutions, insurers, private investors, and export credit agencies should explore appropriate combinations of debt, equity, leasing, guarantees, and other financing arrangements,” he stated.

According to Agbakoba, the Cabotage Vessel Financing Fund (CVFF) remains an important instrument for supporting indigenous vessel ownership, but fleet development cannot depend principally on public financing. \He added that public financing should support viable projects and mobilize private capital, not substitute for a functioning commercial shipping market.

“The Fund should complement commercial bank lending, development finance, private investment, and cargo-backed financing. Its administration requires transparent eligibility criteria, rigorous credit assessment, appropriate collateral, clear risk allocation, effective monitoring, and recovery arrangements.

“The focus must shift from simply seeking money to acquire vessels towards developing viable transactions that connect cargo demand, suitable vessels, credible operators, and willing financiers,” he stated.

“Without dependable cargo, shipowners will struggle to attract capital. Without credible operators and effective security, lenders will hesitate. Without regulatory certainty, investors may decline otherwise viable opportunities.

“We must therefore move beyond asking, “Where will the money to acquire Nigerian vessels come from?” and ask a more fundamental question: “Where is the cargo and commercial opportunity that will make Nigerian vessels financeable?” he stated.

Speaking, former Director-General of the Nigerian Maritime Administration and Safety Agency (NIMASA), Temisan Omatseye, presented a critical appraisal of local commercial banks and existing fund structures, arguing that current financing models fall short of empowering local operators to compete globally.

“There is money available for this, and I keep telling people that we can never be competitive in our shipping industry because of what? Sorry, bankers may not like this. The banks in Nigeria do not have the capacity to finance shipping. One LNG tanker alone is about $250 million. Repayment cannot be less than 15 years. I’m sorry to say this again, our banks are just traders looking for short-term loans,” he stated.

Commending SCAN for bringing critical issues to the fore, the United Bank for Africa (UBA), Regional Manager, Apapa, Nelson Edoye, called for structured partnerships across sectors.

“The gap requires deliberate partnership within the financial sector and the maritime stakeholders,” Edoye noted.

He said: “The maritime sector remains a cornerstone for economic diversification, job creation and national prosperity. Yet, indigenous shipowners continue to face the twin challenges of access to patient capital and regulatory complexities. Bridging this gap requires deliberate partnership between the financial sector, regulators, and industry stakeholders.

“At UBA, with our presence in 20 African countries and global operations, we understand the capital-intensive nature of shipping and the need for innovative, de-risked financing structures. We remain committed to supporting indigenous participation in the maritime value chain through tailored financing solutions, trade facilitation, and advisory services that unlock growth and enhance competitiveness,” he stated