Nigerian Banks Lack Capacity to Boost Local Shipping Industry, Says NAMM

The Nigerian Association of Master Mariners (NAMM) has expressed concerns that Nigerian banks currently lack the financial capability to support the growth of the local shipping industry. This revelation was made during the recent quarterly meeting of the NAMM held at its Secretariat in Lagos.

Former Minister of State for Interior and retired Ship Captain, Emmanuel Ihenacho, highlighted that the methods employed by Nigerian banks for vessel financing are outdated and inadequate. He noted that the interest rates on loans for vessel purchases are significantly higher in Nigeria compared to other countries. Until these rates are reduced, local ship operators will continue to seek funding from external sources for acquiring vessels.

Ihenacho pointed out several challenges faced by local shipping operators, including limited access to funding, short loan tenors, stringent collateral requirements, negative risk perceptions by banks, lack of shipping finance expertise, corruption, bureaucratic hurdles, and foreign exchange fluctuations. These issues have severely hampered the ability of local operators to thrive in the industry.

He also noted that Nigeria’s coastal trade and local shipping industry are predominantly controlled by foreign entities, which limits opportunities for indigenous players. To address these issues, Ihenacho recommended that the government leverage the Cabotage Act to support local shipping. He called on the Nigerian Maritime Administration and Safety Agency (NIMASA) to enhance its Cabotage compliance efforts.

Ihenacho emphasized the economic losses Nigeria faces due to the underdevelopment of its indigenous shipping industry. He stated, "The country is losing significant revenue and jobs because we do not have a robust indigenous shipping industry. If we had control of our own shipping and participated in the movement of goods, we could negotiate the freight rates for our cargoes. Currently, we rely on foreign vessels for our international trade."

In summary, the NAMM underscores the need for Nigeria to explore alternative vessel financing options, improve funding conditions, and support indigenous shipping to boost economic growth and job creation in the sector.