Nigerian Shipowners Struggle for $700M Vessel Financing

Indigenous shipowners in Nigeria are encountering significant barriers in accessing the $700 million Cabotage Vessel Financing Fund (CVFF), which aims to reduce foreign dominance in the shipping industry. The challenge stems from a financing loop where banks refuse to lend against ships without existing cargo contracts.

Sola Adewunmi, president of the Nigerian Shipowners Association, emphasized the difficulty in securing cargo commitments, which are essential for loan approval. Since applications opened in January, only 20 out of 92 submitted have reached Primary Lending Institutions (PLIs), with just one receiving final approval from the Minister of Marine and Blue Economy.

Anokwuru Mike from Zenith Bank stated that vessels cannot be financed without a contract, while Olisa Agbakoba of the Nigerian Chamber of Shipping noted that many applicants fail to meet this requirement. Despite a reported 12.3% increase in cargo throughput by the Nigerian Ports Authority, shipowners struggle to secure cargo commitments due to current practices.