The Nigerian Association of Master Mariners (NAMM) has expressed concerns over the financial limitations of Nigerian banks in supporting the growth of the local shipping industry. At a recent quarterly meeting held at the NAMM Secretariat in Lagos, former Minister of State for Interior and retired Ship Captain, Emmanuel Ihenacho, highlighted the challenges faced by local ship operators due to the inadequate financing options provided by domestic banks.
Ihenacho noted that the methods employed by Nigerian banks for vessel financing are outdated and insufficient for the needs of the industry. He emphasized that the high interest rates on loans for vessel purchases are a significant barrier, making it difficult for local operators to finance ship acquisitions.
Beyond high interest rates, local shipping operators face a range of issues including limited access to funding, short loan tenors, stringent collateral requirements, and a lack of expertise in shipping finance. Additionally, corruption, bureaucratic hurdles, and foreign exchange fluctuations further complicate the financial landscape for the industry.
Ihenacho pointed out that Nigeria’s coastal trade and shipping industry are largely controlled by foreign entities, which restricts opportunities for indigenous players. He urged the government to leverage the Cabotage Act to address these challenges and to enhance compliance levels through the Nigerian Maritime Administration and Safety Agency.
“In terms of economic losses, the country lost and is still losing significant revenue and jobs due to the absence of a robust indigenous shipping industry,” Ihenacho said. He added that if Nigeria had control over its own shipping and participated in the movement of goods, it could better negotiate freight rates and enhance its international trade.
The mariners called for alternative financing options to be explored to empower local ship operators and boost the indigenous shipping industry.
