Shipowners Urge Dangote, Major Cargo Owners to Back Indigenous Fleet Development with Long-Term Contracts
Nigerian indigenous shipowners have called on major cargo owners, particularly the Dangote Group, to support the development of a stronger domestic shipping fleet by awarding long-term Contracts of Affreightment (CoAs) for petroleum products, cement, fertiliser and other bulk commodities.
The shipowners argued that predictable cargo commitments are critical to unlocking financing for vessel acquisition and building a commercially sustainable Nigerian-owned fleet.
The call was made by former President of the Nigerian chapter of the African Shipowners Association (ASA) and Group Managing Director/Chief Executive Officer of Seamate Maritime Integrated Services Limited, Captain Ladi Olubowale, during a Public-Private Dialogue with CEOs organised by the Nigerian Chamber of Shipping in Lagos.
The dialogue, themed “Unlocking Efficiency in the Marine and Blue Economy Value Chain,” brought together key stakeholders across the maritime sector, including industry leaders, cargo owners, terminal operators, policymakers and financial interests.
Mr. Edwin Devakumar, Group Vice President of Dangote Group, participated in the event as the guest CEO.
Olubowale said Nigeria’s strategy for developing indigenous shipping capacity should go beyond discussions about vessel ownership and focus on creating the commercial conditions required to make vessel acquisition attractive and bankable.
According to him, cargo should form the foundation of fleet development because predictable cargo volumes and long-term contracts provide the revenue certainty required by financial institutions and vessel financiers.
“Shipping follows cargo. Give credible Nigerian shipowners long-term Contracts of Affreightment, and those contracts become the commercial foundation upon which vessels can be financed, acquired and deployed,” he said.
He explained that shipping is a highly capital-intensive business, stressing that indigenous operators would find it difficult to acquire large commercial vessels without predictable cargo volumes and credible long-term employment contracts.
Olubowale therefore proposed a shift from the traditional approach of expecting shipowners to acquire vessels before securing cargo.
Instead, he advocated a cargo-backed model in which cargo commitments are secured first, followed by the structuring of long-term contracts and financing to enable qualified Nigerian operators to acquire and deploy vessels.
Olubowale identified the Dangote Group as a potential catalyst for indigenous fleet development, given the group’s growing operations in refining, cement, fertiliser and other industrial sectors that generate significant maritime cargo.
He urged Dangote to consider allocating part of its maritime cargo requirements to qualified Nigerian shipping companies through structured, multi-year CoAs.
According to him, such contracts could provide indigenous shipowners with the predictable revenues needed to approach commercial banks, development finance institutions, export credit agencies, leasing companies and international vessel financiers.
“Once the cargo is secured through credible contracts, Nigerian shipowners can present identifiable cargo volumes, predictable revenues and long-term commercial commitments to financiers,” he explained.
He said this approach could transform cargo commitments into tangible maritime assets and help create a stronger indigenous shipping industry.
‘Convert Nigerian Cargo into Nigerian Maritime Assets’
Olubowale also drew attention to the continued involvement of foreign-controlled vessels in transporting Nigerian crude oil and petroleum cargoes.
He noted that large tankers, including Suezmax vessels, regularly call at Nigerian crude terminals such as Forcados, Bonny and Escravos, generating freight earnings from Nigerian-origin cargo.
He argued that Nigeria should increasingly explore how the movement of its own cargo could be used to develop domestic maritime assets, create employment, strengthen technical capacity and retain more economic value within the country.
“The policy question should therefore be: How can Nigeria progressively convert the movement of its own cargo into domestic maritime assets, employment, technical capability, financing opportunities and long-term national economic value?” he asked.
Olubowale stressed, however, that indigenous fleet development should not be based on protectionism without adequate capacity.
Rather, he advocated the deliberate creation of commercially competitive Nigerian shipping companies capable of operating vessels that meet international standards.
He said there was no structural reason Nigerian companies could not eventually own and operate Suezmax tankers and other large commercial vessels, provided fleet development was linked to cargo availability, financing, technical expertise and long-term employment.
To achieve this, Olubowale proposed a four-pillar model built around Cargo, Contract, Finance and Vessel.
Under the model, cargo owners would provide predictable cargo volumes; long-term CoAs would convert those volumes into bankable commercial commitments; financial institutions would provide funding for commercially viable vessel acquisitions; while Nigerian shipowners would acquire and operate the vessels and provide the required technical and maritime services.
He said the model could complement existing government initiatives, including the Cabotage Vessel Financing Fund (CVFF), rather than making indigenous fleet development entirely dependent on government-backed financing.
According to him, government has an important role to play, but should primarily function as an enabler, regulator and facilitator, while the private sector provides the commercial engine for fleet development.
“Nigeria’s ambition to build a globally competitive marine and blue economy will require deeper collaboration between cargo owners, indigenous shipowners, banks, institutional investors, ports, regulators and government,” he said.
He added that government policy should focus on creating predictable regulations, competitive ports, access to finance, local capacity development and transparent commercial frameworks.
Cargo owners, he said, should provide commercial opportunities, financial institutions should finance bankable projects, while competent private-sector operators should invest in vessels and deliver maritime services.
Olubowale further noted that the opportunity to use Nigerian cargo to build Nigerian maritime capacity extends beyond the Dangote Group.
He pointed to Nigeria’s position as one of Africa’s major producers and consumers of petroleum products, cement, fertiliser, agricultural commodities and industrial goods as a major opportunity for indigenous shipping companies.
He also noted that the expansion of intra-African trade, particularly under the African Continental Free Trade Area (AfCFTA), could increase demand for maritime transportation and create opportunities for Nigerian operators.
“The central question is therefore not simply whether Nigeria can own more ships. It is whether the country can deliberately use its enormous cargo base to create a commercially sustainable indigenous shipping industry,” he said.
According to him, long-term cargo commitments could enable Nigerian operators to build fleets, create seafaring and shore-based employment, retain freight earnings within the economy, strengthen maritime technical capacity and position Nigerian shipping companies to participate more competitively in intra-African trade.
He urged major Nigerian cargo owners to look beyond their core industrial operations and consider the wider economic impact of supporting indigenous maritime operators through structured commercial partnerships.
“Dangote and other major Nigerian cargo owners can therefore play a role extending beyond industrial production. Through structured partnerships with credible indigenous operators, they can help create the commercial foundation for the next generation of Nigerian shipping companies,” he said.
Olubowale called for sustained dialogue among policymakers, cargo owners, indigenous shipowners, terminal operators, financial institutions and other stakeholders across the maritime value chain.
He said sustainable maritime development would require stakeholders to work together towards common economic objectives and create commercially viable opportunities for indigenous operators.
He concluded that the private sector must remain at the centre of Nigeria’s maritime development, while government creates the enabling environment for investment and growth.
“The maritime industry must ultimately be driven by the private sector. Government should create the enabling environment, while cargo owners, financiers and indigenous operators build the commercial ecosystem. If we connect Nigerian cargo to Nigerian maritime capacity, we will not merely acquire ships—we will build a sustainable shipping industry.”
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