Despite Nigeria’s strategic 900-kilometre coastline and a market of over 200 million people, local shipping investors are largely absent from the country’s $6 billion freight industry. According to industry veterans, foreign companies control the majority of cargo operations, leaving Nigerian firms to fight for scraps. Greg Ogbeifun, a shipowner with four decades of experience, says the ships at major ports like Marina, Apapa, Tincan Island, and Lekki Deep Seaport are all foreign-owned. “Since the collapse of the National Shipping Line in the 1990s, Nigeria has been haemorrhaging its freight earnings,” he explains.
The lack of government support has made it nearly impossible for indigenous investors to enter the market. While Nigerian law under the Cabotage Act reserves cargo for local shipping lines, banks refuse to finance vessels without guaranteed cargo. Ogbeifun recalls starting his company decades ago with minimal capital, backed by a contract that assured banks of revenue. Today, government cargo guarantees remain largely inactive, leaving aspiring Nigerian shipowners without the leverage needed to secure loans.
Even when funding is available, the financial burden is enormous. New feeder ships cost between $17.5 million and $45 million, while ultra-large container vessels can reach $295 million. Annual operating costs for medium-sized ships exceed $8 million, excluding maintenance and fuel, and local shipyards lack capacity for major repairs. The recently revived $700 million shipbuilding fund is capped at $25 million per company, barely enough to cover a single vessel, leaving little for operations.
Experts say Nigeria’s inconsistent regulatory framework discourages investment. Agencies including NIMASA, the Port Authority, and Customs apply rules unpredictably, creating operational uncertainty. Retired admiral Michael Johnson warns that investors cannot risk hundreds of millions in a market where bureaucratic and political hurdles are rampant. “Those who would have invested see too many problems and cannot commit,” he notes, highlighting the need for legal and institutional reforms.
While companies like Greenview Development and Dangote Ports have poured hundreds of millions into port infrastructure, few have ventured into owning vessels due to financial and operational risks. Experts call for hybrid registries, better cargo guarantees, and a revived national shipping line to boost indigenous participation. Aminu Umar, president of the Nigerian Chamber of Shipping, emphasizes the urgency: in global crises, nations with strong local shipping industries prioritize themselves, leaving Nigeria vulnerable if local capacity remains underdeveloped.
source: Business day