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Shipowners seek long-term cargo deals from Dangote, others to grow Nigerian fleet
Capt. Ladi Olubowale says predictable cargo contracts can help Nigerian shipowners secure financing and acquire vessels, including large commercial tankers.
LAGOS — Nigerian indigenous shipowners have urged major companies with significant cargo volumes to enter into long-term shipping agreements with local operators as part of efforts to expand the country’s commercial fleet.
The call, particularly directed at the Dangote Group, was made by former President of the African Ship-owners Association, ASA, Nigerian chapter, Capt. Ladi Olubowale, during a Public-Private Dialogue with Chief Executives organised by the Nigerian Chamber of Shipping in Lagos.
Olubowale argued that access to predictable cargo was critical to the growth of indigenous shipping companies because long-term contracts could help them secure financing for vessel acquisition.
He summarised the relationship by saying that “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,” Olubowale said.
He called on the Dangote Group to consider allocating part of the cargo generated by its refinery, cement, fertiliser and other industrial operations to qualified Nigerian shipping companies through multi-year Contracts of Affreightment.
He explained that the predictable income from such contracts would strengthen the ability of local shipowners to seek funding from banks, development finance institutions, leasing companies and other financial institutions for the purchase of vessels.
Olubowale said the development of a strong indigenous fleet should not be considered impossible, including the ownership and operation of Suezmax tankers and other large commercial vessels by 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 proposed a model based on four interconnected elements: cargo, contract, finance and vessel.
Under the model, government would focus on creating an enabling regulatory framework, while private-sector operators would drive investment and the expansion of Nigeria’s shipping fleet.
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