Urges closure of waiver loopholes, stiffer penalties for violators
Nigeria’s continuous failure to fully implement and enforce the Coastal and Inland Shipping (Cabotage) Act, 2003, is costing the country an estimated $100 billion yearly in freight earnings, expatriate employment costs, and capital flight in the oil and gas maritime logistics chain.
The Nigerian Maritime Administration and Safety Agency (NIMASA) has also come under criticism for its inadequate enforcement capacity and the abuse of waiver provisions, which researchers said allowed foreign vessels to dominate Nigeria’s coastal shipping space.
In a position statement on ‘Non-Implementation of the Nigerian Cabotage Act and Its Socio-Economic Consequences’, released in Abuja, the Sea Empowerment and Research Centre (SEREC) said the 22-year-old law, which was designed to empower Nigerian maritime operators, create employment and retain revenue within the domestic economy, failed to deliver on its objectives.
In the paper made available to The Guardian yesterday, the research body expressed deep concern over the issue, noting that the Act enabled massive economic leakages, foreign dominance of coastal shipping, and job losses across the maritime value chain.
According to SEREC, while official estimates vary, the Nigerian Ports Consultative Council (NPCC) estimates that yearly maritime revenue losses exceed $9 billion, while independent industry assessments by professional bodies estimate a yearly loss of approximately $50 billion.
The research body stated that some experts project the broader economic cost, including indirect losses, uncollected taxes, capital flight, and lost investment opportunities, to be as high as $100 billion per year.
“While figures differ, the magnitude of the losses is undeniably massive and detrimental to national economic growth, maritime sovereignty and employment generation.
“Over two decades after its enactment, the Act’s objectives remain largely unrealised. The result is an alarming scale of economic leakage and dependency on foreign vessels for local shipping operations,” the centre stated.
SEREC attributed the persistent failure of the Cabotage regime to institutional weaknesses, policy inconsistencies, discontinuity between successive administrations, as well as political interference and patronage networks influencing waiver issuance and contract allocation.
The group further identified subtle pressures from dominant external operators, who benefit from Nigeria’s dependency on foreign tonnage, overly flexible waiver clauses (Sections 9–11), and the granting of excessive discretion to public officials.
Others include weak sanctions and poor deterrence mechanisms for violators, ambiguity in ownership and build requirements, enabling proxy foreign participation, as well as a lack of inter-agency synergy among NIMASA, Nigerian Ports Authority (NPA), Nigerian National Petroleum Company Limited (NNPCL) and National Inland Waterways Authority (NIWA), resulting in fragmented enforcement.
The body also faulted the poor management and delayed disbursement of the Cabotage Vessel Financing Fund (CVFF), describing it as a major setback to indigenous ship ownership.
SEREC added that limited local shipbuilding and repair capacity, as well as the absence of effective sanctions, further weakened compliance with the law.
Beyond the financial losses, the research centre said the social consequences were equally severe as thousands of maritime jobs were lost to expatriates, while local operators remained uncompetitive, and Nigeria’s maritime sovereignty continued to erode.
According to SEREC, the ripple effects have hindered the growth of related sub-sectors, including shipbuilding, insurance, bunkering, and marine logistics.
To reverse the trend, SEREC recommended a series of legislative, institutional and capacity reforms, which include amending the Cabotage Act to close waiver loopholes, introducing transparency clauses and strengthening penalties for violators.
It also called for the establishment of a Cabotage Compliance Tribunal to expedite enforcement, with the transparent disbursement of the CVFF to credible indigenous operators.
The research group further urged the government to re-equip NIMASA with modern vessel tracking and monitoring systems, foster inter-agency collaboration among maritime institutions, and incentivise investment in local shipbuilding and seafarer training.
“Political will remains the most decisive factor in rescuing the Cabotage regime from perpetual stagnation. Nigeria must consciously prioritise its maritime economic sovereignty — not as a slogan, but as a policy imperative tied to national growth and security,” SEREC emphasised.
It also stressed that the Cabotage Act remains one of Nigeria’s most visionary maritime policies but continues to suffer from poor execution and lack of accountability.
The body, however, called on the Federal Government, the Ministry of Marine and Blue Economy, NIMASA, and industry stakeholders to recommit to the Act’s original vision to reclaim the billions lost yearly as well as empower indigenous operators, and restore the country’s maritime dignity.
