Nigeria To Spend 939.5 billion Naira On Vessels By 2023

Nigeria may require to spend at least $2.59 billion on vessels acquisition in the next four years as experts bemoaned the underperformance of the nation's maritime industry compared with the sector's potentials.

The estimated expenditure on vessels was a product of new forecast released by the Nigerian Maritime Administration and Safety Agency (NIMASA)  on Tuesday. 

The projection, however, represents a decline compared with $3.04 billion said to have been spent on vessels in the last four years.

A breakdown of the outlook for the next four years showed that top five vessels in projected demand between 2019 and 2023, would be tugboats, security patrol vessels, jargon barges, and crew boats, among others. 

Breaking down the expected expenses, it noted that industry’s expenditure on Category 1 vessels would be $1.65 billion or 51 per cent of total spend compared to $1.04 billion or 33 per cent for Category 2 vessels, and $519 million or 16 per cent for Category 3 vessels, totalling $2.588 billion (about N939.5 billion).

The industry had expended $3.04 billion on vessels in the last four years, between 2014-2018, according to the data released by NIMASA.

Between 2014 and 2018, the industry spent $2.21billion on Category 1 of marine vessels representing 73 per cent of total spend. Category 2 was $393 million or 13 per cent, while $437 million or 14 per cent was invested in Category 3 vessels.

The document tagged “Harnessing The Maritime And Shipping Sector For Sustainable Growth,” predicts a brighter future for Nigeria’s maritime sector, with the industry volume expected to grow by 10 per this year, despite prevailing domestic and global conditions. 

However, growth in the industry is hinged on the successful conclusion of the forthcoming general elections, and assurance of security of the environment given that insecurity is a seen as the biggest disincentive to trade and reinforces the need to protect Nigeria’s territorial waters.

Dakuku Peterside, the chief executive of NIMASA said the maritime sector has the potential to contribute at least 10 per cent of Nigeria’s Gross Domestic Product (GDP) in no distant future.
He noted that Nigeria has the biggest market in Africa; and generates about 65 to 76 percent of cargo throughput in West Africa, while 65 percent of all cargo heading for these regions will most likely end up in the Nigerian market.
Peterside said the Cabotage Vessel Financing Fund (CVFF) has not sufficiently addressed the huge finance need of the industry as a result of huge financial outlay required for the industry.

The agency, he said is looking at other Ship Financing Models to encourage the local operators.
“We have been engaging with government at the highest level to push for special intervention fund, special interest rate of single digit, and other incentives that will drive optimal performance in the sector. 

"We shall not relent in our drive to put the right framework together to help beneficiaries and investors have a good return on investment,” he said.