Experts urge NIMASA to split $700m CVFF for maximum economic impact through local shipbuilding

By Seun Ibiyemi

As the Nigerian Maritime Administration and Safety Agency (NIMASA) finalises plans to disburse the long-anticipated $700 million Cabotage Vessel Financing Fund (CVFF), maritime professionals and industry stakeholders are urging the federal government to reassess the fund’s allocation model to better support Nigeria’s economic development.

The Minister of Marine and Blue Economy, Adegboyega Oyetola, recently approved the release of the fund, with NIMASA’s Director General, Dr Dayo Mobereola, confirming that disbursement is expected to be completed before the end of 2025.

However, concerns are mounting within the maritime sector over plans to use the entire fund for vessel acquisition—especially if such vessels are to be sourced from foreign shipyards. Critics argue that this approach could drain Nigerian capital into international shipbuilding markets, particularly in countries like China and South Korea, without yielding substantial domestic benefits.

In a conversation with journalists, Adakole Ejegbudu, Technical Director of the Flotilla Academy of Marine Technology (FAMT), criticised the notion of allocating the full fund to foreign vessel purchases. He described it as counterproductive to national economic interests.

Ejegbudu proposed a tripartite allocation framework: $50 million for the development of local shipyards, $200 million for manpower training and capacity building, and $450 million earmarked for vessel acquisition.

“Such a structure ensures all three pillars of the Cabotage Act are addressed,” he explained. “Building ships domestically has a ripple effect across multiple industries, from coatings and pipes to logistics, resulting in substantial job creation.”

He added that establishing a new shipyard in Nigeria would require as little as $25 million, which could provide the foundation for a sustainable, homegrown shipbuilding industry and contribute meaningfully to economic diversification.

Dr Gidado Usman, Deputy Director at the Nigerian Institute of Transport Technology, echoed this perspective. He stressed that the Cabotage Act explicitly calls for ships to be owned, built, crewed, and registered in Nigeria. According to Dr Usman, directing the CVFF solely towards purchasing foreign-built ships would contradict the law’s intent.

“Foreign-built ships offer short-term fixes but do little to strengthen the local industry,” he said. “Our existing shipyards should be given priority, and government investment should focus on enhancing their capacity. Even if ships are imported in parts, assembling and customising them locally will preserve economic value and support industrial growth.”

Dr Usman further argued that retrofitting and modifying vessels within Nigeria qualifies as indigenous construction under the Cabotage Act. This, he said, would not only meet legal requirements but also encourage domestic technical development and employment.

Both experts cautioned that a singular focus on purchasing vessels from abroad could increase Nigeria’s debt exposure and lead to economic leakage. Conversely, investing in local shipbuilding, they argued, would stimulate broader industrial development and create a resilient maritime sector.

As the country prepares to inject $700 million into its shipping industry, the call for a restructured CVFF deployment highlights a growing demand for policies that prioritise local content, sustainable growth, and long-term benefits for Nigeria’s blue economy.