The Cargo Defence Fund (CDF) was introduced in 2001 by the Nigerian Shippers’ Council (NSC), as a mutual, limited guarantee scheme designed to assist, protect, and empower Nigerian importers and exporters to pursue legitimate maritime claims and mitigating cargo losses. It operates through member contributions to fund legal aid and dispute resolution.
The fund is financed through registration fees and contributions from exporters and importers. The key objective is to alleviate the financial burden on shippers who may be facing legal challenges, abandoned cargo, or losses during maritime transit.
It provides support to shippers for legal expenses in cases of damage, loss, or disputes, particularly where the shipper lacks the resources for litigation.
By our calculations, the Fund is about 25 years old. Its accruable is about N28 Billion as at 2025. However, the first indication that all is not well with the CDF emerged last year when the Executive Secretary and Chief Executive Officer of the Nigerian Shippers’ Council (NSC), Dr. Akutah Pius revealed that the Council is reforming and strengthening the Fund (CDF) to ensure transparency, sustainability, and greater support for small and medium-sized enterprises (SMEs) and shippers across Nigeria. This is coming years after its dormancy and inactivity.
Dr. Akutah went ahead to reaffirm the Council’s commitment to making the ₦28 billion Cargo Defence Fund a sustainable tool for shippers’ protection, SME empowerment, and maritime sector growth.
“At the moment, we have about ₦28 billion in that fund, which is a good thing. But as a Council, we want to create a strong corporate governance structure around it and emphasize its sustainability”, he had said.
Giving a further insight into the future of the Fund, he said, the Council had engaged a consultant to develop a Standard Operating Procedure (SOP) that will guide the transparent management of the Fund in compliance with the court order mandating its use for projects that directly benefit Nigerian shippers. He added that the SOP is currently under review by the Federal Ministry of Marine and Blue Economy, after which implementation will begin.
Dr. Akutah also assured that no part of the ₦28 billion fund will be accessed or disbursed without a clear framework, noting that the SOP will ensure accountability and define proper utilization strategies.
What this probably indicates is that there is a possible lack of trust among all interests in the Cargo Defence Fund, especially by shippers who have been contributing into the fund over the years.
And suddenly, shippers under the aegis of the Shippers’ Association of Lagos State (SALS) openly kicked against their exclusion from the proposed board that will oversee the CDF, describing the move as unjust, despite their role as the claimant in the legal process that led to the recovery of the funds.
From what we have seen, there is a call for caution in the administration of the CDF. This is more so, since a similar situation befell the Cabotage Vessel Finance Fund (CVFF) being managed by the Nigerian Maritime Administration and Safety Agency (NIMASA).
We recall that since it was introduced as part of the Cabotage Act, the CVFF has not been disbursed, even though it has accrued into Hundreds of Millions of Dollars.
Just like the clamour for disbursement of the CVFF, shippers have intensified their calls for improved access to the CDF. They have focused attention and agitation on reforming its operation to better support SMEs and trade growth.
As much as we commend the management of the Shippers’ Council to set up a proper regulatory frame work for the CDF, through the constitution of a board and setting up a Standard Operating Procedure, we are worried that the Council has yet not deemed it fit to include a representative of shippers.
Already, the shippers spoke through the President of Shippers Association of Lagos State (SALS); Rev. Nicodemus Odolo. They protested the exclusion of the association from the proposed board that will oversee the Cargo Defence Fund, insisting that the group deserves representation as the claimant in the legal process that led to the recovery of the funds.
This is perfectly in order. The only way to ensure inclusion and transparency is to put a member of the shippers associations on the board. It is equally disturbing that NSC has already released a Standard Operating Procedure detailing how the board for the Cargo Defence Fund would operate, without a recourse to the shippers.
We are however glad that the Shippers’ Council has retraced its steps and has opened discussions with the Shippers’ Association to address issues surrounding the SOP and the constitution of the Cargo Defence Fund board. We are also happy that the Shippers are also working on their inputs into the SOP and the board of the CDF. This is in accordance with the request made by the Shippers’ Council.
It is our hope that, these discussions will culminate into evolving a workable and good governance structure for the CDF.
The Nigeria Shippers’ Council should be concerned about the need for a transparent administration of the Fund. Constituting an acceptable board and establishing a transparent Standard Operating Procedure is a step in this direction.
By its statutes, the CDF must strictly support legitimate claims and it must not cover illegal trade activities or fake documentation.
By its creation, the CDF is expected to be a cushion for shippers who are facing economic hardships or specific shipping crises. This should be strictly adhered to, going forward.
