Succinct comments on the Lame Duck: The Nigerian Cabotage Regime

Succinct comments on the Lame Duck: The Nigerian Cabotage Regime

By: Engr. I. Olu. Akinsoji M.Sc., FNSE.

With the compliment of this divine season, I present this article to remind the Law Makers, the Executing Ministry and Agencies, other relevant bodies including the organized stakeholders that it is ten years since the law establishing the Cabotage Regime was promulgated. It is further intended for us all totake stock and appraise the situation,to measure the level of fulfillment of the regime and weather the looming action based on the accrued tariffs, fines and levies for licenses and waivers under the provisions of the Cabotage Vessel Financing Fund CVFF is the real and justified way forward.


I must hasten to say that very many countries have embraced Cabotage principles which are a form of trade protectionism.However, the successful countries have not compromised quality of service deliveries. They have successfully used it to develop quality of Flag State duties, technology, operational and managerial capacity, creating enormous jobs for their citizens and significant economic activities as well as wealth for the nation. Nigerian Cabotage is intended to do the same for our country and it has all the potentials to do so. The Act of 2003 as well as the implementation guidelines of 2007 is the two documents that should usher in the regime to serve the intended purpose. These instruments provide the tools forstrategic plans that should move us away from the state of unpreparedness when waivers on the key elements (the pillars of cabotage) become unnecessary and Nigerians should thereafter start to appreciate the regime.It appears a blanket waiver has put the essence of the regime in abeyance. Quantum of levy collection rather than institutional performance scale as a measure of success makes the regime, in my opinion a lame dock.


Let us further remind ourselves the very relevant part of the Act:


PART II – RESTRICTION OF VESSELS IN DOMESTIC COASTAL TRADE; ‘A vessel other than a vessel wholly owned and manned by a Nigerian citizen, built and registered in Nigeria shall not engage in the domestic coastal carriage of cargo and passengers within the Coastal, Territorial, Inland or any point within the waters of the Exclusive Economic Zone of Nigeria’. The Act went further to define, what I will call the pillars of Cabotage (The foundation of Technical, Operational and Managerial shipping development): ‘Vessel’, ‘Vessel built in Nigeria’, ‘Vessel wholly manned by Nigerians’ and ‘wholly owned Nigerian vessel’


PART VIII – CABOTAGE VESSEL FINANCING FUND (CVFF); (ii) ‘Thepurpose of the Fund shall be to promote the development of indigenous ship acquisition capacity by providing financial assistance to Nigerian operators in the domestic coastal shipping’.


Comments on these provisions of the Act:

The brief comments here-under are based on the definitions of the various pillars of the provisions of the Cabotage Law and my humble maritime administrative experience.



‘Vessel built in Nigeria’ – ‘Means where all the major component of its Hull and superstructure are fabricated in Nigeria or assembled entirely in Nigeria.



The disbursement of CVFF for ship acquisition can only be lawful if the ship acquired emerges from lawful action that is the ship isbuilt in Nigeria according to the definition above. Disbursing CVFF Fund to procure operational ship built outside Nigeria as a Nigerian Cabotage Vessel is an unlawful act.


The development of indigenous ship acquisition capacity should be interpreted bearing in mind the vessel building requirement of the provision of the law. The policy drive should be to encourage recognized Nigerian ship building yards by strengthening them and assisting them to collaborate with international yards to gain more experience and grow in the process of building or assembling ships. Please note that building ships at this stage of our development should strictly be under the supervision of highly rated Classification Society and I will recommend only any one of these four: Lloyds Register, Germanisher Lloyds, American Bureau of Ships and Bureau VERITAS who are top members of the International Classification Society – A consultative member of IMO. Using part of the CVFF as seed money for this course under a planned programme will provide sustainable social and economic development inherent in the cabotage regime. Building of ships will not only provide jobs but also influence smaller technological industry such as building of vehicles and heavy industrial machineries as was the case of industrialized nations like South Korea.

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