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As Nigeria celebrates its 64th Independence anniversary, the maritime sector is yet to achieve the status of a maritime hub for West and Central Africa, despite controlling approximately 70 per cent of the region’s cargo traffic, ADAKU ONYENUCHEYA reports.
In sixty-four years of independence, Nigeria’s maritime industry remains a critical but underutilised sector, and far from realising its potential as a leading hub in West and Central Africa.
Despite its strategic location along the Atlantic Ocean, vast coastline and abundant natural resources, systemic challenges have continued to hinder its progress.
Nigeria controls about 70 per cent of West and Central Africa’s cargo traffic, yet the sector is plagued by a host of unresolved challenges. From inadequate infrastructure and corruption to policy inconsistencies and poor port infrastructure, the industry faces significant hurdles.
These issues, compounded by a lack of shipping capacity, delays in port clearance as well as inefficient technical and security challenges, have held the sector back.
While neighbouring countries like Togo, Ghana, Benin Republic and Côte d’Ivoire have made strides in modernising their ports and maritime logistics, Nigeria’s efforts remain sluggish.
As a result, Nigeria struggles to compete as a preferred destination for shipping and logistics services in the region, losing up to N7 trillion yearly as cargoes are diverted to neighbouring countries.
What makes maritime hub status
To solidify its position as a maritime hub, a nation must excel in key areas such as infrastructure development, modernised ports, and expanded berths and terminals.
Other requirements include deepening seaport draughts to accommodate larger vessels, developing inland waterways and river ports and improving road and rail connectivity.
Although Nigeria has upgraded some port facilities, many remain in dire need of rehabilitation, such as the Tin Can, Apapa, Rivers, Onne, Warri and Calabar port complexes that require around $1 billion for refurbishment, with the Tin Can port quay partially collapsed.
Additionally, the draughts of Nigerian seaports are too shallow to accommodate larger merchant vessels, leading to cargo diversion to neighbouring ports with deeper draughts, such as Ghana’s 16-meter-deep ports.
The Lekki Deep Seaport, at 16.5 meters, offers some relief but is not enough to keep pace with regional competition. In 2023, the House of Representatives revealed that Nigerian seaports received just 10 per cent of West African imports, out of the 60 per cent destined for the country.
According to the house, the remaining 50 per cent, lost to neighbouring countries, costs Nigeria approximately $7 billion yearly. The President of the National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), Lucky Amiwero, highlighted several key deficiencies that have hindered the ability to become a transhipment hub, attributing the challenges to poor infrastructure, lack of professional management and a preference for political over technical decision-making.
“We have not gotten it right in the maritime sector. Our ports cannot compete with those in Ghana or Côte d’Ivoire. Their draft levels are deeper and more importantly, they have rail links connecting their ports to the hinterland, which Nigeria still lacks,” Amiwero stated.
He explained that the absence of rail connectivity to Nigeria’s ports is a major disadvantage, noting that railways significantly reduce transportation costs when moving goods to inland areas.
Amiwero added that Nigeria’s reliance solely on road transport makes its ports inefficient and more expensive compared to those in neighbouring countries.
Efficiency and productivity
For Nigeria to compete as a maritime hub, it must improve efficiency and productivity, by digitising port operations, automating cargo handling and clearance and streamlining customs procedures.
Currently, much of the maritime sector still operates with manual systems. Cargo clearance at the seaports relies heavily on physical inspections, causing delays.
Moreover, many agencies continue to use outdated paper-based procedures for clearing goods. The implementation of cargo tracking systems, such as the International Cargo Tracking Note (ICTN), has been delayed due to political bureaucracy, despite Federal Executive Council approval.
The implementation of the Electronic Cargo Tracking Notes (ECTN) system, which has the potential to generate between $90 million and $235 million yearly for Nigeria, has yet to be executed despite receiving approval.
This system is already in place in 26 African countries, including Ghana, Senegal, Benin, and Togo, where it plays a critical role in addressing under-declaration at ports, securing imports and exports, and ensuring transparency in cargo invoicing and declarations.
Amiwero emphasised that Ghana and Côte d’Ivoire have overtaken Nigeria in the race to become the region’s maritime hub by leveraging advanced technologies like satellite tracking systems and e-bond systems, which have made their ports more efficient and cost-effective.
“Ghana has tools for transit and satellite tracking, while we are still using outdated systems. This is why they have taken over our transhipment business,” he stated.
Similarly, the National Public Relations Officer of the Association of Registered Freight Forwarders of Nigeria (AREFFN), Taiwo Fatomilola, attributed Nigeria’s lack of progress to poor leadership and technological backwardness.
He criticised the lasting impact of colonial-era practices in technology and development, which have contributed to the country’s stagnation. Fatomilola shared personal experiences of struggling with inefficient banking systems, where network and server issues caused delays, and lamented how such challenges extend to Nigeria’s ports.
Fatomilola highlighted the urgent need for investments in ship ownership and improved infrastructure, noting that without functional basic systems, Nigeria cannot realistically expect to become a maritime hub.
A nation vying to be a maritime hub must offer competitive port tariffs, attract shipping lines and investors with incentives, and simplify regulatory frameworks.
Unfortunately, Nigeria’s port tariffs are among the highest in the region and its regulatory frameworks are cumbersome, discouraging trade.
Human capital development
Human capital development is another critical factor in becoming a maritime hub, which includes training programmes, development of maritime education and capacity-building initiatives.
Although Nigeria has reputable maritime training institutions, their certifications are not widely accepted internationally, leaving many locally trained seafarers jobless.
Meanwhile, countries like Ghana issue internationally recognised certificates, which are preferred by foreign shipping lines with Nigerians seeking for it to work onboard vessels.
The Nigerian Maritime Administration and Safety Agency (NIMASA) launched the Nigerian Seafarers Development Programme (NSDP) and has trained over 3,000 cadets in foreign institutions in Greece, India and the Philippines, but many beneficiaries have struggled to find jobs in the maritime sector.
However, many of these cadets, including those trained in specialised fields like naval architecture and marine engineering, who are unable to find jobs in the maritime sector, have taken up other menial jobs.
Joseph Bob Miebaike, a 2017 NSDP scholarship beneficiary, shared his frustration after studying Naval Architecture and Marine Engineering at the University of Cebu in the Philippines. Despite completing the programme, he has yet to secure a job and has resorted to managing a pay charge.
He lamented that, despite spending substantial amounts of money, between N300,000 to N400,000, to renew his expired Standards of Training, Certification and Watchkeeping (STCW) certificates, he still struggles to find employment.
His requests to NIMASA for Sea-Time placement have gone unanswered, reflecting the broader issue of neglect among graduates of the programme. A Master Mariner, Captain Fola Ojutalayo, criticised the over N20 billion expended on the scheme and the limitations imposed by the STCW on Nigerian seafarers, which have disadvantaged them in the global market.
He pointed out that when Nigeria started implementing the STCW in 2002, it restricted its certificates to a maximum of 3,000 kilowatts for engineers and 3,000 Gross Register Tonnage (GRT) for officers.
According to him, this limitation forced highly qualified Nigerian seafarers, who were previously handling larger vessels, to be restricted to smaller ones, reducing their competitiveness.
Ojutalayo also expressed frustration with NIMASA’s internal policies, questioning why the agency does not employ the very Certificate of Competency (CoC) holders it issues. He highlighted the internal discrimination within Nigeria’s maritime institutions, which has contributed to the lack of recognition from international shipowners.
Additionally, he criticised the lack of unity among the maritime agencies, leading to inter-agency rivalry and a failure to implement protectionist policies that could strengthen the sector.
Becoming a maritime hub requires the adoption of modern technologies such as blockchain for secure data exchange, the Internet of Things (IoT) for efficient operations, and artificial intelligence for predictive maintenance.
However, Nigeria is far from implementing these technologies, with many operations still relying on outdated systems.
Safety issues
A regional maritime hub must also enhance security and safety measures, including compliance with the International Ship and Port Facility Security (ISPS) code, anti-piracy efforts, and port surveillance.
While Nigeria has maintained a zero-piracy record for three years, concerns about maritime crime, particularly stowaways and drug trafficking, persist. The President of the Maritime Security Providers Association of Nigeria (MASPAN), Emmanuel Maiguwa, acknowledged the importance of complying with the International Ship and Port Facility Security (ISPS) Code, emphasising that adherence to these standards alone is insufficient to fully secure port facilities.
According to him, the ISPS Code, though crucial, does not address all aspects of port security, leaving room for vulnerabilities that could be exploited by criminals. He also underscored the financial burden that maritime crime, particularly incidents related to drug trafficking, places on operators.
Shipping capacity
Despite the potential for growth under the African Continental Free Trade Area (AfCFTA) agreement, which is expected to boost intra-African freight by 28 per cent and maritime freight demand by 62 per cent, according to the United Nations Conference on Trade and Development (UNCTAD), Nigeria continues to lose vast economic opportunities.
The Chief Executive Officer of Starz Marine and Engineering Limited, Greg Ogbeifun, highlighted that Nigeria is missing out on an estimated $1 trillion yearly across the shipping sector due to a lack of vessels, infrastructure, human capacity, and cargo carriage.
Maritime lawyer, Emeka Akabogu, also pointed out that the country loses $4 billion yearly due to its non-participation in local marine transportation and an additional $9 billion yearly from not participating in international freight services.
Akabogu emphasised that Nigeria lacks in key areas of shipping, including fleet expansion, ship repairs, and shipbuilding, all of which are critical to thriving in the global shipping industry.
One major issue is the status of the Cabotage Vessels Financing Fund (CVFF), established in 2003 under the Coastal and Inland Shipping Act. The CVFF was designed to help indigenous shipowners acquire vessels and expand their capacity, with the Nigerian Maritime Administration and Safety Agency (NIMASA) tasked with managing the fund.
However, the whereabouts of the CVFF remain unclear, as NIMASA has not disclosed how much has been accrued from the two per cent surcharge on contracts performed by vessels in cabotage trade.
Despite directives from previous ministers, President Muhammadu Buhari, and the House of Representatives, the funds have yet to be disbursed to qualified shipowners.
The lack of transparency and delays in disbursing the CVFF have hindered efforts to bolster the Nigerian shipping industry, further weakening the country’s position in global maritime trade. Without addressing these issues fleet expansion, infrastructure investment, and fund disbursement Nigeria will continue to lose out on the significant economic potential that maritime trade holds for its economy.
Policy factor
Effective government policies are essential for maritime development. Unfortunately, Nigeria struggles with delayed policy implementation and inconsistent regulations, deterring investment.
The Vice Chairman of the Business Action Against Corruption (BAAC), Jonathan Nicol, highlighted the negative impact of economic mismanagement on Nigeria’s maritime industry, which has led to a mass exodus of investors and deepened the unemployment crisis.
Nicol, who is a former president of the Shippers Association of Lagos (SALS), pointed out that the country once had 23 ocean cargo vessels operated by Nigerians, but today lacks sufficient training opportunities for seafarers due to the absence of these vessels.
Nicol emphasised that poor government policies, overseen by various ministries, have failed businesses, contributing to economic decline. He called for the implementation of well-structured economic policies to promote entrepreneurship and job creation, cautioning against harsh austerity measures.
Similarly, Amiwero stressed the need for a complete overhaul of the sector, arguing that technical and professional expertise should take precedence over political decisions to restore Nigeria’s status as a regional maritime leader.
Amiwero warned that without significant reforms, neighbouring countries would continue to surpass Nigeria in the maritime industry. Stakeholders agree that by addressing these issues, Nigeria could reclaim its place as a regional maritime leader, attracting more cargo, investment and economic growth