Blue Economy
The Presence of Foreign Crew Aboard Our Coastal Vessels: What Must be Done to Enforce the Nigeria Cabotage Law – Part Two
The Presence of Foreign Crew Aboard Our Coastal Vessels: What Must be Done to Enforce the Nigeria Cabotage Law
A Comprehensive Special Report on Legislative Intent, Systemic Failures, Human Costs, and the Reform Agenda Nigeria Cannot Afford to Delay
By Waterwaysnews.ng | Maritime Desk | Thursday, March 19, 2026
Our four-parts report started yesterday with the release of part one: The vision – What the Cabotage Law was designed to achieve. Here is part two of the report
PART TWO: THE REALITY — WHY THE OBJECTIVES REMAIN LARGELY UNDERACHIEVED
Twenty-three years after its enactment, the verdict of industry observers, academic researchers, and regulatory insiders is consistent and troubling. Over twenty years since the enactment of the Nigerian Cabotage Act, the cabotage trade is still dominated by foreigners, raising questions about the reasons for the policy’s failure to deliver its intended objectives.
Despite the Cabotage Act, less than 20% of maritime trade is under indigenous control, indicating a failure to increase local participation since its enforcement. Foreign ownership of vessels still dominates the sector, undermining local shipping growth.
The causes of this failure are multiple, interconnected, and deeply rooted. Waterwaysnews.ng examines them in detail below.
2.1 INSTITUTIONAL WEAKNESS AND NIMASA’S ENFORCEMENT DEFICIT
The Nigerian Maritime Administration and Safety Agency (NIMASA) was designated as the principal implementation and enforcement agency under the Act. The scale of its institutional challenge has been consistently documented. NIMASA’s institutional incapacity to monitor compliance affects adversely the enforcement of the Cabotage Act 2003 in Nigerian coastal and inland shipping. The inability of NIMASA to bridge the capacity gap results in poor compliance with the Cabotage Act.
The institutions are weak and ineffective; the laws are not up to date to fill lacunae existing while implementing the policy. Defects thrown up by the agencies of government given the responsibility of regulating and promoting maritime cabotage have become evident.
The history of NIMASA’s leadership instability has compounded its institutional weakness. On July 8, 2009, the then Director-General of NIMASA was dismissed by the Nigerian Government, with his removal attributed to the fact that under his administration NIMASA lacked the requisite managerial capacity to implement and enforce the Cabotage Act and also failed in translating the intent of the Act to the benefit of potential Nigerian investors who have interest in the shipping sector.
2.2 THE WAIVER PROBLEM: A DOOR LEFT WIDE OPEN
Perhaps the single most damaging structural flaw in the legal framework is the waiver system established under Sections 9 to 11 of the Cabotage Act. While waivers serve a legitimate function in principle — allowing foreign vessels to operate temporarily where no Nigerian alternative exists — their administration has created a massive loophole that has effectively undermined the entire cabotage regime.
Section 9 of the Cabotage Act 2003 gives the Minister sole discretion to grant waivers upon an application by a foreign vessel that can prove there is unavailability of a wholly owned Nigerian vessel to perform the cabotage services required. This application must be scrutinised by NIMASA; however, NIMASA, which is the implementation agency, lacks the capacity and machinery to verify the claims made in these applications. This has resulted in the issuance of arbitrary exemptions without proper verification.
SEREC attributed the persistent failure of the Cabotage regime to institutional weaknesses, policy inconsistencies, discontinuity between successive administrations, as well as political interference and patronage networks influencing waiver issuance and contract allocation. The group further identified subtle pressures from dominant external operators, who benefit from Nigeria’s dependency on foreign tonnage, overly flexible waiver clauses (Sections 9–11), and the granting of excessive discretion to public officials.
Since the enactment of the Nigerian Cabotage Act, there has been a persistent dependence on cabotage waivers which exempt non-compliant vessels from adhering to the cabotage requirements in Nigeria. Countries like Nigeria and South Africa have encountered challenges in leveraging cabotage restrictions in order to build their supply-side capacity.
2.3 LACK OF INDIGENOUS TONNAGE AND THE VESSEL SHORTAGE CRISIS
The cabotage law can only be enforced if Nigerian-owned vessels are available to replace foreign ones. The fundamental reality is that they are not available in sufficient numbers. Another obstacle to the effectiveness of the Cabotage Act is the scarcity of cabotage vessels compared to the available tonnage. Insufficient funds for acquiring new ships and marine equipment have been identified as reasons for this shortage.
Despite the legal preference for Nigerian-owned vessels, a structural shortfall in Nigerian-owned tonnage has persisted for many years. Foreign vessels and foreign-crewed ships continue to participate in domestic coastal logistics through various exemptions, loopholes, or weak enforcement, particularly in the oil and gas sector, where chartering conditions and urgency often trump local-only rules.
The shortage of vessels has a devastating ripple effect on seafarer training. The training of Nigerian crew as mandated by the Act to man Nigerian vessels engaged in coastal trade is highly dependent on vessel availability, as trainees cannot be certified until they have completed their sea time training onboard vessels. In other words, a vessel shortage has a ripple effect on the training of Nigerian crew. The primary challenge in seafarer training in Nigeria stems from the discontinuation of the Nigerian National Shipping Line (NNSL), which had a fleet of more than 40 ships that provided training opportunities for Nigerian cadets during its operation.
This creates a vicious cycle: few Nigerian ships means few sea-time training opportunities for cadets; fewer certified Nigerian seafarers means fewer qualified people to man Nigerian-flagged vessels; fewer qualified seafarers provides justification for more waivers for foreign crew. The cycle repeats.
2.4 THE LONG DORMANCY OF THE CABOTAGE VESSEL FINANCING FUND (CVFF)
The Cabotage Act established the Cabotage Vessel Financing Fund (CVFF) precisely to break the vessel shortage cycle — a dedicated credit facility to help Nigerian operators acquire and maintain tonnage. Its failure to operate effectively for most of its existence represents one of the Act’s most critical failures. The CVFF, designed to financially empower Nigerian shipping companies, reportedly trapped over N40 billion in local banks since its establishment, with no significant disbursements occurring as of 2016.
SEREC faulted the poor management and delayed disbursement of the CVFF, describing it as a major setback to indigenous ship ownership.
The provision of funds remains a major challenge for the successful implementation of the Cabotage Act, despite the availability of the CVFF. Shipping requires significant capital investments that indigenous shippers may struggle to afford, preventing their access to funds for vessel acquisition and perpetuating foreign dominance.
It is only in the last two years that meaningful movement has been recorded. NIMASA, via its marine notice releases in November 2024, invited duly licensed deposit money banks and local and foreign development financial institutions to apply for accreditation as Primary Lending Institutions under the CVFF for the inaugural round of disbursements slated to take place before the last quarter of 2025. In January 2026, NIMASA launched a digital application portal to commence the process, following directives to boost indigenous shipping capacity.
2.5 THE COVERT OPERATION: FOREIGN SEAFARERS SMUGGLED ONTO COASTAL VESSELS
Perhaps the most alarming dimension of foreign crew dominance on Nigerian coastal vessels is not merely regulatory non-compliance but active circumvention of the law. Investigations have uncovered a structured system through which foreign nationals are clandestinely placed aboard vessels operating in Nigerian waters. Despite the Coastal and Inland Shipping (Cabotage) Act 2003, which seeks to protect Nigerian seafarers and the shipping industry, foreign seafarers are still being smuggled from neighbouring Togo and Benin Republic to board vessels on the nation’s waters in contravention of the law.
The mechanism is calculated. Foreign seafarers are flown to Benin Republic and Togo from where they are picked up mid-sea on the territorial waters of these countries and ferried to board vessels in Nigeria. The illegal operation was possible because most of the vessels operating under the Cabotage area in the country are foreign-owned with Nigerians as fronts to enable them operate freely.
The scale of this infiltration, according to maritime stakeholders, is staggering. Some maritime observers have stated that sometimes out of a hundred ships that call to Nigeria, “you may not see five Nigerians working inside those ships. But they are bringing goods to Nigeria. So the Cabotage Act itself has not really worked.”
2.6 WEAK INTER-AGENCY SYNERGY AND FRAGMENTED ENFORCEMENT
The enforcement of cabotage is not the function of a single agency. It requires coordinated action among NIMASA, the Nigerian Ports Authority (NPA), the Nigerian National Petroleum Company Limited (NNPCL), and the National Inland Waterways Authority (NIWA). This coordination has historically been absent.
A lack of inter-agency synergy among NIMASA, the Nigerian Ports Authority (NPA), Nigerian National Petroleum Company Limited (NNPCL) and National Inland Waterways Authority (NIWA), resulting in fragmented enforcement, has been identified as a major contributing factor to the persistent failure of the Cabotage regime.
The consequences of this fragmented approach are practical and immediate: vessels can be refused at one regulatory point and cleared at another; compliance documentation is not cross-checked across agencies; and foreign operators learn the administrative fault lines between institutions and exploit them.
2.7 POLITICAL INTERFERENCE AND ABSENCE OF POLITICAL WILL
Running through all the institutional and legal challenges is a thread of political failure that analysts return to repeatedly. The problems can be related to the inadequate understanding of the basic requirements of the Cabotage Act by the regulators and the government’s lack of will power in implementing the regime. This has led to the annual loss of over $6 billion to foreign maritime operators due to the lack of indigenous participation.
“Political will remains the most decisive factor in rescuing the Cabotage regime from perpetual stagnation. Government should declare emergency in cabotage implementation,” maritime stakeholders have urged.
Nigerian maritime experience has shown that African nations are not lacking in the development of well thought-out policy blueprints for maritime development; they rather have poor policy implementation strategies, as past records have shown — a failure pattern that mirrors the total abandonment of the UNCTAD 40-40-20 policy before it.