The Shipping Industry in Nigeria faces an annual financial loss of about $86 billion, primarily due to foreign dominance in the freight forwarding sector. This situation has raised concern regarding the urgent necessity for local shipping businesses to regain a share of this essential economic activity. Nigerian shipowners claim that the federal government’s existing policies and lack of action have affected the development of domestic operators, allowing foreign companies to take advantage of this industry. The topic was emphasised at the 16th Marine and Technical Summit convened in Lagos by the Association of Marine Engineers and Surveyors.
Capt Emmanuel Iheanacho, Managing Director of Genesis Shipping, expressed concerns regarding the country’s financial setbacks during the event. He noted that although preliminary assessments put losses at around $9.2 billion each year, the actual amount is greater when factoring in freight costs for Petroleum products. He emphasised that depending on international ships for crude oil transport contributes to this issue, driving the yearly deficit beyond $86 billion. The dominance of foreign vessels in the nation’s cargo transportation arises from the lack of local capability, a problem compounded by policies that do not encourage local operators to compete effectively.
70% of total cargo flow in West and Central Africa was produced in Nigeria.
Delivering a presentation titled, ‘What is militating against the resurgence of Nigerian global trading? Greg Ogbeifun, the Chairman of Starzs Investments Company Limited, underscored that even though the region is strategically positioned along the Atlantic coast and plays a crucial part in regional trade, domestic shipping operators do not receive the necessary backing to succeed. He pointed out that the country produces about 70 percent of the overall cargo flow between West and Central Africa, but ships are hardly ever locally owned. Ogbeifun expressed concern over vessels owned by global entities occupying the nation’s vital ports, including Apapa, Tincan, Warri, Onne, and the newly established Lekki Port.
These facilities play a role in the nation’s import and Export activities, positioning the country as an important participant in the maritime sector. However, the lack of domestically owned vessels at these locations underscored a missed opportunity for economic advancement and Revenue enhancement. Over the years, notable figures in Nigeria’s shipping sector, including Capt. Emmanuel Ihenacho, Chief Isaac Jolapamo, and Temisan Omatseye, attempted to close the gaps by acquiring ships. Yet, persistent systemic challenges undermined their initiatives, preventing them from expanding and maintaining their businesses.
Experts urge govt to implement measures to promote fair local business.
After the Nigerian National Shipping Line collapsed in 1995, the nation faced difficulties regenerating its maritime capabilities, resulting in the predominance of foreign ships in its Trade activities. The presence of foreign firms imposes a solid toll on the national economy. Every importer and exporter within the country must pay exorbitant fees to foreign shipping companies, adding to the financial strain on businesses and customers. This disparity in the industry has drained national assets and decreased opportunities for employment growth, skill enhancement, and wealth preservation within the country.
Industry experts, including Ogbeifun, have urged the federal government to introduce measures allowing local businesses to compete fairly. Foreign shipping companies benefit from many advantages, such as Tax exemptions and low tax responsibilities, creating barriers for local operators trying to access the market. Without decisive action from policymakers, the country will continue to lose billions to foreign interests, with little to show for its maritime potential. The demand for action goes beyond financial profit; it signifies a movement towards national autonomy and economic self-sufficiency.
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By nurturing the development of local vessel companies, the nation can regain its share of the global shipping industry, generate employment opportunities, and ensure that a greater share of the wealth produced from its natural assets remains within the country. In response to these challenges, key figures in the industry have called on the government to create and enforce measures that encourage local engagement in the industry. Such measures should lower entry limitations, offer financial support, and ensure domestic businesses can access the necessary resources to rival global counterparts. If these measures are not taken, the dream of restoring this sector and reducing its economic losses will remain unattainable.