Following plans by Dangote Group to transport its refined petroleum products by sea, Nigerian shipowners have raised concerns over a potential violation of the Cabotage Act, fearing that the refinery’s operations could deepen foreign dominance in oil transport, leaving local players at a disadvantage.
Recall that in a recent statement, Fatima Wali-Abdurrahman, Senior Adviser to the Group’s President on Special Projects and Strategic Relations, highlighted that Dangote’s newly constructed jetty at the Lekki Free Zone would handle bulk cargo during the refinery’s development.
According to her, the company is committed to easing pressure on road networks by transporting petroleum products to other Nigerian ports by sea.
However, reactions from within the maritime community have revealed deep concerns about the implications of this approach for local shipping.
Shipowners, who spoke to our correspondent, have pointed out that Dangote’s plans seem to cater only to larger vessels, effectively shutting out smaller Nigerian-owned ships from benefiting from the refinery’s cargo evacuation plans.
A shipowner who pleaded anonymity noted that, “Dangote’s refinery wasn’t built to accommodate smaller vessels. They are looking at vessels from 20,000 tonnes and above, leaving no space for the smaller ships that most Nigerian shipowners operate.”
He explained that this exclusion means that many local ship owners will miss out on transporting the huge volume of refined petroleum products that the refinery is expected to generate.
The shipowner also told our correspondent that: “I have heard that Dangote is considering buying a floater, which is a massive modular vessel that can stay offshore and load petroleum products. This floater would then supply smaller vessels, but it’s clear that the major lifting would be handled by larger international ships.”
“The concern is that such a setup would continue to prioritize foreign ships over local ones, despite the capacity and expertise available in Nigeria’s maritime sector”, he lamented.
“We’ve seen this before with other oil-related projects. Nigerian shipowners are often left out, and international players get the bulk of the contracts,
“It is not that we don’t have Nigerians that owned such big vessels, but many of them are independent marketers, and you know the cold war between these independent marketers and Dangote, for instance MATRIX, BOVAS and PINNACLE, all have vessels that are very big enough, but they will not use it because of the in-fighting”, he said.
Speaking further, he said, “At the heart of the shipowners’ concerns is the enforcement of the Cabotage Act, which mandates that vessels operating in Nigeria’s coastal and inland waters be owned and manned by Nigerians. While the law is clear, enforcement has often been lacking, allowing foreign operators to dominate the market.
“The Cabotage Act was put in place to protect Nigerian shipowners, but it’s not being enforced properly. If Dangote’s refinery is allowed to give contracts to foreign ships, it will be a direct violation of this law,
“NIMASA (Nigerian Maritime Administration and Safety Agency) needs to step-up and ensure that Nigerian ships are prioritized for the transportation of these products.”
The shipowners also raised questions about whether Dangote Group had any plans to work with Nigerian vessels. “For now, we don’t know if Dangote will give preference to Nigerian ships. We’ve already seen some international companies involved in transporting products from the refinery, so there’s no guarantee that local operators will be considered.”
On his part the President Nigerian Chamber of Shipping (NCS); Aminu Umar, in response to these fears, acknowledged that Dangote’s announcement of transporting its products by sea is a positive development for the shipping industry, but recognized the need for regulatory oversight.
“Dangote’s plan to move 70% of their cargo by sea is a welcome development. It opens up opportunities for Nigerian shipowners, as well as investors looking to enter the sector. However, it is up to NIMASA to ensure the Cabotage Act is enforced and that Nigerian ships are prioritized.”
Umar emphasized that while one or two Nigerian vessels are already participating in transporting cargoes from the refinery, the refinery’s increased output provides a significant opportunity for local investors.
Another shipowner; Doyin Olanipekun said, “this is a regulatory matter. It’s up to NIMASA to enforce the Cabotage Act and ensure that only Nigerian-flagged vessels are used in the domestic movement of petroleum products. If they don’t, then we will continue to see foreign dominance in our waters.
“There’s definitely a gap that needs to be filled. If the refinery is going to process such large volumes, there will be demand for ships to transport these products. But Nigerian investors need to be ready to step in, and the government must ensure that the playing field is level.”
The shipowner also stressed that while the opportunity exists, it will only benefit Nigerians if the right policies are in place.
“This is a wake-up call for Nigerian investors. We need to be prepared to invest in the shipping industry, but at the same time, we need the government to support us by enforcing the Cabotage Act and other local content laws.”
They called on Dangote Group to make a public commitment to supporting local shipowners, as well as to work with NMASA to ensure that Nigerian-flagged vessels are prioritized for transporting products from the refinery. “It’s not just about the law. It’s about supporting Nigerian businesses and ensuring that the wealth generated from this refinery stays within the country,” the shipowner emphasized.
