Stakeholders demand fiscal waiver for vessel acquisition, operations

Industry stakeholders have called on the Federal Government to eliminate policy bottlenecks and reduce high import duties, operational fees and inefficiencies that hinder indigenous operators from competing globally in the shipping industry.

The appeal was made during the second edition of the Maritime Reporters Association of Nigeria (MARAN) Annual Maritime Lecture, which was themed, ‘AfCFTA: Dismantling Barriers, Navigating Regional Trade’.

The President of the Maritime Security Providers Association of Nigeria (MASPAN), Emmanuel Maiguwa, revealed that ship import duties often account for over 60 per cent of a vessel’s cost.
He said the cost, coupled with commercial bank interest rates exceeding 35 per cent, makes vessel acquisition and operation costs unattainable for local operators.

Maiguwa underscored the critical economic implications of these barriers, emphasising the strategic importance of maritime trade for Nigeria’s economy.

Citing examples, Maiguwa explained that while constructing a modern, fuel-efficient container vessel in China costs approximately $60 million, over a 30-year lifespan the vessel could generate trade volumes equivalent to 30 per cent of its cost in a single voyage, contributing significantly to Nigeria’s gross domestic product (GDP).

He explained further that the cumulative trade facilitated by such vessels would far surpass their initial investment, showcasing the immense value of maritime logistics to economic growth.
“We must remove every barrier that makes vessel acquisition and operation difficult. Each new vessel added to our fleet benefits the economy immensely. Without reform, Nigeria risks losing the competitive advantage of shipping, which is vital for transporting large cargo,” he stated.
Maiguwa also highlighted Nigeria’s exclusion from standard charter party clauses, a global maritime practice regulating shipping rates.

He explained that this exclusion allows international shipping companies to impose arbitrary clauses, inflating costs for importers and exporters.

He further criticised the lack of access to affordable financing through initiatives like the Cabotage Vessel Financing Fund (CVFF), which forces operators to rely on exorbitant commercial bank loans.

He urged policymakers to reduce customs duties on vessels, simplify financing processes and remove other barriers to foster a competitive shipping industry and enable long-term economic growth through strategic reforms.

The President of MARAN, Godfrey Bivbere, emphasised the need for investments in maritime assets, noting that intra-African freight is projected to grow by 28 per cent and maritime demand by 62 per cent, under the African Continental Free Trade Agreement (AfCFTA).

The Nigerian Indigenous Shipowners Association (NISA) President, Sola Adewunmi, expressed concerns over Nigeria’s lack of readiness to leverage the $3.4 trillion AfCFTA opportunities.
He highlighted critical gaps in infrastructure, vessel acquisition and government policies that are stifling Nigeria’s competitiveness in continental trade.

Adewunmi added that the country lacks the shipping facilities required for efficient goods movement.

He also highlighted the disparity between Nigerian and foreign shipowners, who have access to more favourable financing terms.

“Our counterparts secure loans at better rates, while we struggle with prohibitive costs, making competition nearly impossible,” Adewunmi noted.

A former Acting President of the Association of Nigeria Licensed Customs Agents (ANLCA), Dr. Kayode Farinto, pointed out inefficiencies in logistics management as a significant obstacle to seamless trade under the AfCFTA.

He emphasised the need for a multimodal transport system to ease road congestion and improve trade flows.

Farinto called on the Ministry of Marine and Blue Economy to collaborate with the Ministry of Trade to address transportation bottlenecks through private-public agreements or other initiatives.

“Efficient logistics is key to unlocking the full potential of the blue economy and ensuring Nigeria’s competitiveness in regional trade,” he concluded.