Banks, indigenous shipowners and key stakeholders in Nigeria’s maritime industry have endorsed a comprehensive de-risking framework designed to accelerate the disbursement of the $700 million Cabotage Vessel Financing Fund (CVFF) and strengthen indigenous participation in coastal shipping.
The resolution was reached at the maiden Maritime Policy Roundtable organised by Olisa Agbakoba Legal (OAL), where representatives from the banking, insurance, ship management and maritime sectors examined practical measures to improve access to vessel financing while protecting lenders from credit risks.
Participants agreed that the long-awaited CVFF would only achieve its objective of expanding indigenous shipping capacity if lending institutions are supported with strong legal, financial and operational safeguards.
Speaking at the forum, Senior Partner of OAL, Dr. Olisa Agbakoba (SAN), described the CVFF as a strategic intervention established under the Coastal and Inland Shipping (Cabotage) Act 2003 to increase Nigerian ownership of vessels and reduce the country’s dependence on foreign operators in coastal trade.
Presenting the proposed de-risking framework, OAL Partner Collins Okeke urged participating financial institutions to adopt rigorous credit-risk assessment procedures, conduct comprehensive corporate and regulatory due diligence, and insist on enforceable security arrangements before approving loans under the scheme.
According to him, banks should independently evaluate applicants’ financial strength, debt exposure, operational experience and projected cash flows, while also verifying beneficial ownership, regulatory compliance and the source of equity contributions.
To minimise loan defaults, Okeke recommended the use of enforceable mortgages on financed vessels, assignment of vessel earnings to lenders, comprehensive marine insurance and structured loan recovery and restructuring mechanisms for borrowers facing financial challenges.
Also speaking, Managing Director of NBC Maritime Ltd., Capt. Nicolas Bernard, stressed that professional ship management remains essential to preserving the value of financed vessels and ensuring sustainable returns on investment.
He said involving professional ship managers from the vessel acquisition stage would strengthen technical due diligence, enhance regulatory compliance, reduce operational costs and minimise vessel downtime.
Stakeholders also reviewed the shortcomings of the initial phase of the CVFF lending programme and agreed that future disbursements should be anchored on stronger credit evaluation processes, specialised maritime finance expertise, continuous project monitoring and a more supportive regulatory framework.
The roundtable further identified cargo-backed financing and long-term Contracts of Affreightment as effective mechanisms for creating predictable revenue streams, improving the creditworthiness of indigenous shipping companies and strengthening their capacity to service loans.
As part of efforts to institutionalise the initiative, participants resolved to expand the forum’s membership to include marine surveyors, engineers, valuers, insurance professionals and ship-management experts.
They also nominated Fidelity Bank’s Wale Mesioye to coordinate the platform and called on participating financial institutions to establish dedicated maritime finance units to deepen expertise in ship financing and support the sustainable growth of Nigeria’s indigenous shipping industry.
