Nigerian Shipowners Seek Dangote’s Long-Term Cargo Contracts

By Adedapo Adesanya

Indigenous shipowners have urged major cargo owners, particularly Dangote Group, to support the development of Nigeria’s domestic shipping fleet through long-term Contracts of Affreightment (CoAs).

The shipowners said predictable cargo contracts for petroleum products, cement, fertiliser and other bulk commodities would provide the revenue certainty needed to finance and acquire vessels.

Former President of the African Shipowners Association, Nigerian chapter, and Group Managing Director of Seamate Maritime Integrated Services Limited, Mr Ladi Olubowale, made the call at a Public-Private Dialogue with chief executive officers organised by the Nigerian Chamber of Shipping in Lagos.

The dialogue, themed Unlocking Efficiency in the Marine and Blue Economy Value Chain, brought together maritime industry leaders, cargo owners, terminal operators and policymakers.

Mr Olubowale said Nigeria’s maritime development strategy should focus on creating commercial conditions that would make vessel acquisition by indigenous operators bankable.

“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 said shipping was capital-intensive and that Nigerian operators could not sustainably acquire large vessels without predictable cargo volumes and bankable employment contracts.

Mr Olubowale proposed that cargo should first be secured through credible long-term contracts before shipowners acquire vessels, rather than the conventional approach of purchasing vessels and subsequently seeking cargo.

He identified Dangote Group as a potential catalyst for domestic fleet development, given its operations in refining, cement, fertiliser and other industrial activities.

He urged the group to allocate part of its maritime cargo requirements to qualified indigenous shipping companies through structured, multi-year CoAs.

According to him, such contracts would allow Nigerian shipowners to approach banks, development finance institutions, export credit agencies, leasing companies and international vessel financiers with identifiable cargo volumes and predictable revenues.

Mr Olubowale also raised concerns over the continued participation of foreign-controlled vessels in the transportation of Nigerian crude and petroleum cargoes.

He said developing indigenous shipping capacity should not be based on protectionism but on building commercially competitive Nigerian companies.

“There is no structural reason why Nigerian companies should not ultimately own and operate Suezmax tankers and other large commercial vessels. But fleet development must be connected to cargo, finance, technical capability and long-term employment,” he said.

He then proposed a four-pillar model of Cargo, Contract, Finance and Vessel, under which cargo owners provide predictable volumes, long-term CoAs convert the volumes into bankable contracts, financial institutions finance commercially viable vessel acquisitions, and indigenous shipowners provide the vessels and technical management.