Nigeria has relaunched a long-dormant maritime financing scheme aimed at strengthening domestic shipping capacity and positioning local operators to expand into regional coastal trade across West Africa.
The government last week opened an online application portal for the Cabotage Vessel Financing Fund (CVFF), allowing Nigerian shipowners to apply for financing for vessel acquisition. The move revives a mechanism that was created more than two decades ago but remained largely inactive.
Authorities said the relaunch is part of broader efforts to promote indigenous participation in coastal shipping, known as cabotage, which Nigerian law reserves for locally owned and operated vessels. The fund earmarks about US$25 million to support Nigerian maritime companies, at a time when the government is moving to phase out waivers that have long allowed foreign vessels to operate in the cabotage segment.
Nigeria established the CVFF in 2003 to address chronic financing constraints faced by local shipowners, who have struggled to compete with foreign operators due to limited access to long-term capital. Despite mandatory levies collected from cabotage contracts over the years, the fund remained unused amid governance challenges and repeated delays in disbursement.
The reopening of the fund is seen by industry stakeholders as a test of the government’s commitment to building domestic maritime capacity and reducing reliance on foreign shipping firms.
Officials said the digitalisation of the application process is intended to improve transparency and efficiency, as well as restore confidence among shipowners who have waited years for access to the fund.
The initiative also reflects Nigeria’s broader ambition to leverage its maritime potential beyond its domestic market. With a population estimated at about 237.5 million, Africa’s largest economy, and a major oil and gas sector, Nigeria represents the biggest maritime market in West Africa.
If the expansion of the domestic fleet materialises, Nigerian shipowners could move beyond national cabotage to operate regional coastal routes, supplying shipping services to neighbouring countries that lack significant commercial fleets.
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In a sub-region where maritime transport remains heavily dependent on foreign operators, particularly for petroleum products, bulk cargo and extractive-industry logistics, Nigeria could emerge as a regional maritime service provider, industry analysts say.
Local operators could target short-sea shipping along the Gulf of Guinea, including the transport of refined petroleum products, cement, agricultural commodities and project cargo linked to mining and energy developments.
However, analysts caution that realising this ambition will depend on how effectively the CVFF is managed and whether the financing translates into commercially viable vessels that are efficiently deployed.
Key challenges include the governance framework for the fund, the creditworthiness and technical capacity of beneficiary companies, and the availability of skilled maritime personnel to operate and maintain the vessels.
Nigeria’s maritime sector has long faced structural constraints, including ageing fleets, limited shipbuilding and repair infrastructure, and gaps in maritime training. Addressing these issues will be critical if local operators are to compete regionally.
The government has said the gradual withdrawal of cabotage waivers for foreign vessels will create space for Nigerian companies to grow, but industry groups have warned that local capacity must be built quickly to avoid disruptions to coastal trade.
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Officials have not disclosed how many vessels the current funding envelope is expected to support, nor the specific criteria for selection. The US$25 million allocation is modest by international shipping standards, but authorities argue it could catalyse additional private financing.
The relaunch of the CVFF comes amid renewed policy focus on the blue economy, which Nigerian authorities view as a potential driver of growth, employment and diversification away from oil revenues.
Whether the fund can deliver on its long-stated objectives will likely shape Nigeria’s ability to transition from a cabotage-dependent market into a regional maritime power.
