Indigenous shipowners have warned that high import duties on vessels acquired by Nigerians, along with preferential treatment for foreign operators, are stifling the growth and development of the country’s shipping industry and weakening its competitiveness in maritime trade.

They noted that in other maritime countries, ship acquisition attracts minimal or zero duties because governments recognise shipping as a strategic industry. They warned that Nigeria’s high duties continue to leave the country dependent on foreign shipping lines for cargo movement, resulting in an estimated yearly capital flight of $8.5 billion.

Speaking at the citizens-stakeholders engagement organised by the Ministry of Marine and Blue Economy held in Lagos, the Chairman of Starzs Investments Company Limited, Greg Ogbeifun, said the existing fiscal framework places indigenous shipowners at a significant disadvantage compared to their foreign counterparts, discouraging investment in vessel acquisition and international shipping operations.

According to Ogbeifun, the cost burden imposed by import duties on ships is excessively high, with local operators sometimes paying up to 14 per cent of a vessel’s value in duties and associated charges, while foreign competitors pay as little as one per cent and begin operations immediately.

“The last ship we built attracted about 14 per cent of the cost of the vessel in duties. Meanwhile, foreign competitors bringing in their ships pay as little as one per cent and begin operations immediately,” he said.

Ogbeifun noted that this disparity has made it nearly impossible for Nigerian shipping companies to compete effectively, both in domestic and international markets, as higher capital costs inevitably translate into uncompetitive freight rates.

“In other maritime nations, ship acquisition attracts zero or minimal duties because governments recognise shipping as a strategic industry. Here, we impose heavy financial burdens and still expect local operators to compete globally,” he stated.

Ogbeifun recalled that past attempts to establish a national shipping line in collaboration with foreign partners faltered within a few weeks after signing the agreement, largely due to Nigeria’s unfavourable tax and duties regime.

The shipowner called on the Federal Government, particularly the Federal Ministry of Finance and the Central Bank of Nigeria (CBN), to implement zero import duties on vessels intended for commercial shipping, describing the move as critical to unlocking investment in the sector.

Ogbeifun argued that such a policy would not only reduce the cost burden of entry for Nigerian operators but also enhance their ability to access international financing, develop viable business cases and compete on equal footing globally.

He also emphasised the need for a broader review of fiscal policies, including high port charges and regulatory fees, which he said further compound operational costs for indigenous companies.

A pioneer member of the Nigerian Indigenous Shippers Association (NISA), Raji Bolaji, urged regulatory authorities to provide clear guidance on the proper sequence of documentation required to obtain letters of intent for vessel acquisitions.

Bolaji emphasised the importance of aligning procedures with existing protocols, warning against assumptions that could create loopholes in the process.

He also sought clarification on the clause after obtaining all certified documents, stressing that while letters of intent are essential, questions remain over whether financial status verification should precede or follow the request for such letters.

Bolaji cautioned that issuing letters of intent without proper financial vetting could create opportunities for misuse, saying “We need to examine this area carefully”.

President, Ship Owners Association of Nigeria (SOAN), Sonny Eja, urged the Federal Government to ensure that all maritime policies align with the country’s overarching national policy framework.

Eja, who is also the Managing Director of Petromarine Nigeria Limited, emphasised the importance of coherent and coordinated policymaking to support vessel owners and operators, particularly those involved in offshore oil and gas and other maritime operations.

He further called for clearer coordination among multiple maritime agencies to prevent duplication of responsibilities, noting that overlapping functions among agencies such as the Nigerian Maritime Administration and Safety Agency (NIMASA), Nigerian Ports Authority (NPA) and the Nigerian Inland Waterways Authority (NIWA) could hinder effective operations.