The Nigerian Association of Master Mariners (NAMM) has raised concerns over the inability of Nigerian banks to adequately support the growth of the local shipping industry.
The association suggests exploring alternative financing options for vessel acquisition within the country.
According to the Vanguard, during NAMM’s recent quarterly meeting at its Secretariat in Lagos, Emmanuel Ihenacho, former Minister of State for Interior and retired Ship Captain, highlighted that the current financial mechanisms employed by Nigerian banks are outdated and inadequate for the needs of the shipping industry.
Ihenacho pointed out that the interest rates imposed by Nigerian banks on loans for vessel purchases are exorbitantly high compared to international standards.
He stressed that unless these rates are significantly reduced, local ship operators will continue to seek funding from alternative sources for their vessel acquisitions.
Beyond the high-interest rates, Ihenacho identified several other obstacles that local shipping operators face, including limited access to funding, short loan tenors, stringent collateral requirements, risk perceptions by banks, lack of expertise in shipping finance, corruption, bureaucratic hurdles, and foreign exchange fluctuations.
He noted that the Nigerian shipping industry and coastal trade are still dominated by foreign entities, which restricts opportunities for local operators. Ihenacho urged the government to leverage the Cabotage Act to address these challenges and enhance support for indigenous shipping companies.
He also called on the Nigerian Maritime Administration and Safety Agency (NIMASA) to improve its enforcement of Cabotage compliance.
“In terms of economic losses, the country continues to forfeit significant revenue and job opportunities due to the absence of a robust indigenous shipping industry,” Ihenacho said.
“Control over our own shipping would allow us to negotiate freight rates for the carriage of our cargoes, but our reliance on foreign vessels for international trade deprives us of this advantage.”
The mariners’ association underscores the need for systemic changes to foster a more supportive environment for the local shipping industry, which could lead to greater economic benefits and increased job creation within Nigeria.
