Nigeria’s failure to effectively enforce the Coastal and Inland Shipping (Cabotage) Act, 2003, is costing the nation an estimated $100 billion annually in freight earnings, expatriate employment costs, and capital flight within the oil and gas maritime logistics sector, according to the Sea Empowerment and Research Centre (SEREC).
In a position paper titled “Non-Implementation of the Nigerian Cabotage Act and Its Socio-Economic Consequences,” released in Abuja, SEREC said the 22-year-old law — meant to empower local operators and retain maritime revenue — has largely failed to achieve its purpose.
It blamed the Nigerian Maritime Administration and Safety Agency (NIMASA) for weak enforcement and the abuse of waiver provisions that have allowed foreign vessels to dominate coastal shipping.
SEREC cited figures from the Nigerian Ports Consultative Council (NPCC) showing annual maritime revenue losses exceeding $9 billion, while independent industry assessments put the total at around $50 billion.
Some experts, it added, estimate the broader economic cost, including indirect losses, capital flight, and uncollected taxes, to be as high as $100 billion yearly.
The group attributed the persistent failure of the Cabotage regime to institutional weaknesses, inconsistent policies, political interference in waiver issuance, and lack of coordination among key maritime agencies such as NIMASA, the Nigerian Ports Authority (NPA), the Nigerian National Petroleum Company Limited (NNPCL), and the National Inland Waterways Authority (NIWA).
It also faulted the delayed disbursement of the Cabotage Vessel Financing Fund (CVFF), describing it as a major setback to indigenous ship ownership and competitiveness.
Other problems identified include limited shipbuilding capacity, weak sanctions for violators, and loopholes that enable proxy foreign participation.
Beyond financial losses, SEREC warned that thousands of maritime jobs have been lost to expatriates, while Nigeria’s maritime sovereignty and industrial base continue to erode.
The group said the ripple effects have stifled growth in related sectors such as shipbuilding, insurance, bunkering, and marine logistics.
To reverse the trend, SEREC urged the government to amend the Cabotage Act to close waiver loopholes, introduce transparency clauses, strengthen penalties, and establish a Cabotage Compliance Tribunal.
It also called for modern vessel-tracking systems, transparent CVFF disbursement, inter-agency collaboration, and renewed political will to protect Nigeria’s maritime sovereignty and reclaim lost revenues.