Major cargo owners, such as the Dangote Group, have been urged by indigenous shipowners to encourage local fleet growth by providing long-term contracts of affreightment for bulk cargoes such as cement, fertiliser, and petroleum products.
According to the shipowners, vessel financing and acquisition are made possible by reliable cargo contracts, which are the cornerstone of shipping.
Capt. Ladi Olubowale, a former Nigeria Chapter President of the African Shipowners Association and Group Managing Director of Seamate Maritime Integrated Services Limited, made the request during a recent Public-Private Dialogue with CEOs held in Lagos by the Nigerian Chamber of Shipping.
Industry participants were gathered for the discussion, which had as its theme “Unlocking efficiency in the marine and blue economy value chain.” Mr. Edwin Devakumar, Group Vise President of Dangote Group (Oil and Gas), served as the guest CEO.
According to Olubowale, Nigeria’s maritime strategy needs to go beyond discussions over vessel ownership and instead focus on “creating commercial conditions that make indigenous vessel acquisition bankable.”
Olubowale stated, “Give credible Nigerian shipowners long-term contracts of affreightment, and those contracts become the commercial foundation upon which vessels can be financed, acquired, and deployed.”
According to Olubowale, Nigerian owners cannot sustainably purchase large boats without guaranteed cargo quantities and bankable employment contracts because shipping is a capital-intensive industry.
With its refinery, cement, and fertiliser industries producing enormous amounts of marine cargo, he said Dangote is in a good position to stimulate the expansion of local fleets by assigning some of its cargo needs to competent local operators under multi-year contracts.
He pointed out that with identifiable cargo and steady income, these contracts would allow Nigerian shipowners to approach banks, development finance organisations, export credit agencies, and foreign financiers.
Olubowale also expressed worry over the predominance of foreign-controlled ships that lift Nigerian crude from Forcados, Bonny, and Escravos terminals, generating enormous freight profits on Nigerian cargo.
How to turn the flow of Nigerian cargo into domestic assets, jobs, technical capacity, and long-term economic value should be the policy question, according to him.
“Nigerian enterprises should eventually own and operate Suezmax tankers and other large commercial vessels for no structural reason. However, fleet development needs to be linked to long-term employment, cargo, funding, and technical capability, he stated.
He promoted a four-pillar approach for fleet expansion called Cargo, Contract, Finance, and Vessel, in which Nigerian owners supply boats and services, CoAs draft bankable contracts, financiers finance the purchase of vessels, and cargo owners supply volumes.
He said the concept would supplement government initiatives such as the Cabotage Vessel Financing Fund, not replace them.
Olubowale emphasised that while the private sector powers the commercial engine, the government should act as an enabler, regulator, and facilitator.
“Deeper cooperation between cargo owners, indigenous shipowners, banks, investors, ports regulators, and government will be necessary for Nigeria’s ambition to build a globally competitive marine and blue economy,” he stated.
He went on to say that marine transport would become even more important as intra-African trade expands under the African Continental Free Trade Area, and Nigeria must consciously leverage its enormous cargo base to develop a viable domestic shipping sector.
“The private sector must eventually be the driving force behind the maritime industry. We won’t only buy ships if we link Nigerian goods to Nigerian maritime capabilities; instead, we’ll create a sustainable shipping sector,” he stated.
