Nigerian shipping experts have expressed strong reservations about the federal government’s continued delay in disbursing the Cabotage Vessel Financing Fund (CVFF), as difficult regulatory guidelines and stringent conditions by the Primary Lending Institutions (PLIs) stall vessel acquisition loans.

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

This comes as the Minister of Marine and Blue Economy, Adegboyega Oyetola, directed the Nigerian Maritime Administration and Safety Agency (NIMASA) to fast-track the disbursement of the CVFF, believed to be about $360 million, to qualified indigenous shipowners to strengthen local shipping capacity and improve Nigeria’s maritime competitiveness.

Oyetola, who spoke at the 2026 Annual Summit of the Shipping Correspondents’ Association of Nigeria (SCAN) in Lagos yesterday, restated the federal government’s commitment to moving the vessel acquisition fund from prolonged delays to operators’ practical acquisition of vessels, expansion of their fleets and creation of employment opportunities.

The minister said government recognised the challenges of indigenous shipowners in securing long-term financing at commercially sustainable rates, with high borrowing costs, stringent collateral requirements and lengthy repayment periods placing the operators at a competitive disadvantage.

However, addressing the theme of the summit, “Low-Risk Capital for Indigenous Shipowners: Overcoming Regulatory and Financial Bottlenecks,” Oyetola, represented by the ministry’s Director of Press, Mrs Anastasia Ogbonna, said he has “since directed the NIMASA to commence the process of disbursing the fund to qualified beneficiaries.

Nevertheless, stakeholders have slammed the sector’s regulatory uncertainties, with the keynote speaker and former President of the Nigerian Bar Association, Dr Olisa Agbakoba, SAN, saying that it increases investment costs and discourages long-term financing.

He called for consistent enforcement of maritime regulations, transparent administrative procedures, clearly defined institutional responsibilities, and a predictable system for administering applicable waivers, adding that without proactive intervention, indigenous operators will continue to lose lucrative opportunities in coastal trade to foreign competitors.

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

He further stressed that “banks and institutional investors must become active partners in developing Nigeria’s national fleet,” through specialised maritime credit expertise, reliable vessel valuations, technical assessments, and sound legal advice on ship mortgages, charter contracts, insurance, and cross-border enforcement.

According to Agbakoba, the CVFF remains an important instrument for supporting indigenous vessel ownership, but fleet development cannot depend principally on public financing. Rather, the fund “should complement commercial bank lending, development finance, private investment, and cargo-backed financing, he said.

Moreover, “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.

“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.

However, former NIMASA Director-General Temisan Omatseye argued that current financing models have failed to empower local operators to compete globally.

According to him, Nigeria can never be competitive in its shipping industry because Nigerian banks “do not have the capacity to finance shipping. One LNG tanker alone is about $250 million. Repayment cannot be less than 15 years. Our banks are just traders looking for short-term loans.”

Commending SCAN for bringing these critical issues to the fore, United Bank for Africa (UBA) Regional Manager, Apapa, Nelson Edoye, called for structured partnerships across sectors, saying the gap requires deliberate collaboration between the financial sector and maritime 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,” Edoye said.

“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.”

By Anthony Nwachukwu