Nigeria does not have a maritime demand problem.

It has a financing problem.

The country has the cargo, the coastline, the ports and a large domestic and regional market. Yet much of the value generated by that trade continues to be captured by foreign shipping interests.

BusinessDay reported in March 2026 that more than 80 percent of Nigeria's freight earnings go to foreign players in a market estimated at about $6 billion annually. A separate industry estimate reported in 2025 put the share of freight earnings flowing abroad at almost 80 percent.

The precise estimates vary, but the underlying imbalance is clear: Nigeria generates substantial maritime demand without capturing a corresponding share of the shipping value.

That raises a more difficult question than why Nigeria does not have enough ships.

Why is it still so difficult to finance the ships that could carry the cargo Nigeria already generates?

“Nigeria does not have a maritime demand problem. It has a financing problem.”

THE CARGO SHIP FINANCING LOOP

The problem begins with a simple commercial paradox.

Banks want evidence that a vessel will generate predictable cash flow before they finance it.

Cargo owners want vessels that are reliable, compliant and commercially capable before committing significant cargo to them.

Shipowners need financing to acquire those vessels in the first place.

The result is a cycle:

No vessel → limited access to major contracts → weak bankability → no financing → no vessel.

Breaking that cycle requires more than asking banks to lend more money.

It requires a stronger connection between cargo, contracts, capital and vessel ownership.

“The challenge is not simply getting capital into shipping. It is making shipping bankable.”

WHY A SHIP IS NOT AN ORDINARY ASSET

A vessel is a specialised and capital-intensive asset.

Its commercial value depends on much more than its purchase price. Age, technical condition, classification, insurance, utilisation, maintenance, crew, regulatory compliance, charter rates and foreign exchange exposure all affect its ability to generate returns.

For the lender, the central question is therefore not simply:

Can this company buy a ship?

It is:

How will this ship generate enough predictable cash flow to repay the financing?

That is why contracts matter.

A vessel supported by a credible long term charter or other dependable commercial arrangement presents a different credit proposition from a vessel purchased first with the expectation that cargo will be found later.

Nigeria's financing problem is therefore inseparable from its cargo market.

The challenge is not simply getting capital into shipping.

It is making shipping bankable.

THE CVFF HAS REACHED THE BANKABILITY TEST

This is where the Cabotage Vessel Financing Fund becomes important.

Established under the Coastal and Inland Shipping (Cabotage) Act 2003, the CVFF was designed to provide financial assistance to eligible Nigerian operators for vessel acquisition and strengthen indigenous participation in domestic shipping. NIMASA's current CVFF framework identifies increased indigenous ship ownership and reduced reliance on foreign vessels among the fund's objectives.

After years of delay, the Federal Government moved to operationalise the fund, bringing the financing question from policy design into the banking system.

NIMASA expanded the number of Primary Lending Institutions from five to twelve. Under the current financing structure, the banks provide 35 percent, NIMASA provides 50 percent and the shipowner contributes 15 percent equity.

NIMASA has also confirmed that the facility will operate at a single digit interest rate, with an eight-year tenure and two-year moratorium, through the twelve participating lenders.

The CVFF therefore addresses an important part of the problem.

But it cannot solve the entire problem.

Because once the money reaches the banking system, the question changes.

It becomes a question of creditworthiness.

“The CVFF therefore addresses an important part of the problem. But it cannot solve the entire problem.”

THE BANK'S QUESTION: WHERE IS THE CARGO?

NIMASA's application requirements illustrate the issue.

Applicants must demonstrate financial and operational capacity, provide acceptable equity and collateral, submit feasibility reports and identify relevant commercial information, including existing contracts with international oil companies where applicable. The maximum financing stated in the published requirements is $25 million.

From a lender's perspective, these requirements are logical.

A ship without a credible commercial purpose can become a nonperforming asset very quickly.

Recent reporting on the CVFF process reinforces this point. BusinessDay reported that participating banks were prioritising applications where the proposed vessel had a clear commercial purpose, preferably supported by a contract or identifiable business opportunity.

The bank's question is therefore straightforward:

Where is the cargo?

“The bank's question is therefore straightforward: Where is the cargo?”

THE SHIPOWNER'S QUESTION: HOW DO WE GET THE CARGO?

An indigenous operator without a modern vessel may struggle to compete for major contracts.

Without those contracts, the operator may struggle to satisfy the bank.

Without financing, acquiring the vessel becomes difficult.

And without the vessel, winning the contract becomes more difficult.

This is the financing loop.

BusinessDay's reporting on Nigeria's freight market captured the dilemma directly, with industry stakeholders describing a situation in which banks want guaranteed cargo before financing ships, while cargo guarantees are difficult to secure without existing shipping capacity.

The problem is therefore not simply that banks are unwilling to lend.

Nor is it simply that shipowners lack capital.

The deeper problem is that the commercial evidence required by one side is often dependent on the asset controlled by the other.

“The deeper problem is that the commercial evidence required by one side is often dependent on the asset controlled by the other.”

CAN CARGO BECOME PART OF THE FINANCING STRUCTURE?

This is where the conversation needs to move.

Nigeria's maritime financing debate should not stop at the question of whether government should release the CVFF.

The bigger question is whether credible cargo commitments can help make vessel acquisition bankable.

Long term Contracts of Affreightment, charter arrangements and other commercially credible cargo commitments can provide lenders with greater visibility over future cash flows.

That does not mean government should guarantee every shipowner's revenue.

It means cargo owners, shipowners and financial institutions need structures that allow each party to manage its own risk while creating a commercially viable pathway to vessel ownership.

This is particularly important in sectors where Nigeria already has substantial cargo demand.

If a ship can be linked to identifiable cargo, a credible counterparty and a sustainable operating model, financing becomes a commercial proposition rather than simply a policy intervention.

That distinction matters.

A government fund can provide catalytic capital.

It cannot, on its own, create a sustainable shipping market.

“A government fund can provide catalytic capital. It cannot, on its own, create a sustainable shipping market.”

THE MISSING CAPITAL ARCHITECTURE

There is another issue.

Nigeria needs financial institutions that understand maritime assets.

Shipping does not fit neatly into the conventional short term lending model.

A vessel can require substantial upfront capital while generating returns over many years. Its value changes with market conditions. Its revenue depends on utilisation and charter arrangements. Its operating costs continue whether the vessel is trading or idle.

This is why specialised maritime finance matters.

It is also why the Regional Maritime Development Bank is significant.

The RMDB was established as a specialised maritime financing institution, with fleet acquisition, shipping logistics and maritime infrastructure among its stated areas of focus.

Its role should not be to replace commercial banks.

It should help create the specialised financing structures, risk understanding and longer-term capital required to make maritime investment more accessible to commercial capital.

The objective should ultimately be a maritime capital ecosystem, not permanent dependence on a government fund.

“The objective should ultimately be a maritime capital ecosystem, not permanent dependence on a government fund.”

THE $25 MILLION QUESTION

There is also a practical limitation that cannot be ignored.

The CVFF's published maximum financing amount is $25 million.

That may be meaningful for some vessel categories and projects.

But it does not automatically solve the capital requirements of larger shipping assets.

BusinessDay's recent analysis noted that new feeder container vessels can cost tens of millions of dollars, while larger container ships can run into the hundreds of millions. Operating expenses, maintenance, insurance and periods when vessels are out of service add further pressure to the balance sheet.

This is why vessel financing cannot be treated as a one-time acquisition problem.

Nigeria needs capital for the full commercial life of the asset.

Acquisition.

Operation.

Maintenance.

Refinancing.

Replacement.

And eventually fleet expansion.

The question is therefore not only how to finance the first vessel.

It is how to build a financing system capable of supporting a fleet.

“The question is therefore not only how to finance the first vessel. It is how to build a financing system capable of supporting a fleet.”

FROM CARGO TO OWNERSHIP

The deeper issue is ownership.

Nigeria can continue to increase cargo throughput while foreign vessels capture much of the freight value.

It can modernise its ports while remaining dependent on foreign shipping capacity.

It can produce maritime professionals while those professionals build their careers around fleets owned elsewhere.

The alternative requires several pieces to work together.

Cargo owners need commercially credible ways to support fleet development.

Banks need better understanding of maritime risk.

Shipowners need stronger equity and operating structures.

Development finance needs to complement rather than permanently substitute for commercial capital.

And government needs a regulatory environment in which indigenous operators can compete on commercially credible terms.

PrimeAxis has examined different dimensions of this challenge: the opportunity emerging from Nigeria's offshore economy, the maritime capability gap, the human capability required to support growth, and the infrastructure needed to move cargo efficiently beyond the seaport.

Finance connects them.

Without capital, opportunity does not become capacity.

Without capacity, cargo does not become ownership.

And without ownership, much of the value generated by maritime trade continues to leave the economy.

“Without capital, opportunity does not become capacity. Without capacity, cargo does not become ownership.”

PRIMEAXIS INSIGHT

Nigeria does not need to manufacture maritime demand.

The demand already exists.

The harder task is building the financial architecture capable of converting that demand into bankable vessels, sustainable shipping businesses and Nigerian ownership.

The CVFF is an important test.

But its success should ultimately be measured by more than the amount approved or disbursed.

The real measure is whether financing produces vessels that secure cargo, generate revenue, repay capital and remain commercially viable.

That is the point at which maritime finance becomes maritime capability.

And that is the question Nigeria now has to answer:

If Nigeria has the cargo, why is it still so difficult to finance the ships?

“That is the point at which maritime finance becomes maritime capability.”

“If Nigeria has the cargo, why is it still so difficult to finance the ships?”